Members of APA's Council on Healthcare Systems and Financing took a new
look at a long-standing problem at APA's 2005 annual meeting in Atlanta in the
session "Funding for Psychiatry: From the Irrational to the
That intractable problem is what former APA President Paul Appelbaum, M.D.,
called the "systematic defunding of the mental health system."
Edward Maxwell, M.D., opened the session with an overview of the funding
trends and issues that have resulted in a serious discrepancy between the
costs to provide needed mental health and substance abuse (MH/SA) services and
resources devoted to them. Maxwell is an APA/Bristol-Myers Squibb Fellow at
Spending on MH/SA services declined between 1991 and 2001 in relation to
spending on all health care (see
page 3). The average
annual growth rate for MH/SA services was 5.6 percent versus 6.5 percent for
all health care. Expenditures on MH/SA services were 7.6 percent of total
health care expenditures, a decline from 8.2 percent in 1991.
Along with that decline has come increased importance of public programs as
a source of funds for MH/SA care.
According to 2001 data, Medicaid was the most important source of funding
for those services, leaving them vulnerable in times of federal and state
Maxwell said that if the decline in spending were a result of greater
efficiency in resource use, it might not represent a problem. However, he
cited data showing that less than one-third of adults needing MH/SA treatment
received it. Only two-fifths of adults with serious mental illness received
Selby Jacobs, M.D., described the disability adjusted life year (DALY), a
concept that could promote rationality in the funding process by demonstrating
the impact on an individual of untreated mental health and substance use
disorders. Jacobs, who chaired the panel, is director of the Connecticut
Mental Health Center and a professor of psychiatry at Yale University School
The DALY, which measures the burden of disease, is a composite indicator of
years lived with a disability (YLD) and years of lost life (YLL) from a
To apply the DALY, disabilities were ranked into six classes, each with a
greater loss of welfare or increased severity than the previous class. The
least disabling class, for example, requires 50 percent decrease in capability
of one of four areas, such as occupation. Those in the most disabled class
need assistance with activities such as eating.
Each class is assigned a severity weight. Years in each class are
multiplied by that weight to produce YLD, while years of YLL, with some
modifications, are added to that figure to produce the DALY.
The importance of the DALY for funding MH/SA treatment becomes clear upon
examination of the rankings of various illnesses in terms of the burden of
disease for an individual.
In 1990 unipolar depression ranked fourth worldwide in terms of burden of
disease for all ages. Its rank remained the same in 2000. But, significantly,
it is projected to become second by 2020.
Also of significance are the rankings for people between the ages of 15 and
44 in developed countries. Seven of the top eight ranked illnesses concerned
MH/SA. The rankings, in order, are major depression (1), alcohol use (2),
schizophrenia (4), self-inflicted injuries (5), bipolar disorder (6), drug use
(7), and obsessive-compulsive disorder (8).
Jacobs said, "Psychiatric disorders emerge from these studies as a
major public health problem."
They become particularly prominent when the burden of illness is viewed not
only as a matter of years of lost life but of years of decreased functioning
as a result of disability. In 1990 psychiatric disorders accounted for only
0.4 percent years of YLL, but 26 percent of YLD.
Mantosh Dewan, M.D., presented a method intended to determine the
cost-effectiveness of various medical treatments and interventions as related
to the impact on the quality of life or quality-adjusted life year (QALY) for
He called the methodology "promising" in terms of its
capability to promote rational decisions about allocation of resources, but
noted that it must be refined and developed.
Dewan offered examples of the application of the method with common medical
Using a colorectal fecal occult blood screen on 50-year-old women, for
example, results in a cost per QALY of $2,500. To reach that figure, the
direct costs of the tests and the costs of treatment for those found to have
colon cancer are determined. Assumptions are made about years of lost life and
diminished quality of life among the population if the screening did not occur
to reach the cost figure of $2,500 per QALY.
By contrast, a screen for diabetes among 25-year-old men produces a cost
per QALY of $67,000. That means it costs approximately $67,000 to gain each
Dewan said that the generally agreed upon benchmark for judging
cost-effectiveness is $50,000 per QALY.
The significance of the methodology for mental health services is that
psychiatric screening and treatment can be shown to be cost-effective in terms
of the QALY and also cost-effective when compared with other kinds of medical
A one-time depression screening of 40-year-old primary care patients
results in a QALY of $35,000, less than the benchmark of $50,000 and therefore
A screening every five years, however, results in a QALY of $55,000, which
is above the benchmark. The five-year screening is not cost-effective because
the additional screenings do not result in enough new cases of identified
depression to warrant the additional cost.
Dewan presented data from studies of the use of psychotherapy and of
medications that demonstrate cost-effectiveness that is at or below the
benchmark of $50,000. He is chair of the Department of Psychiatry and
Behavioral Sciences at Upstate Medical University in Syracuse, N.Y.
Anita Everett, M.D., a senior science advisor at the Substance Abuse and
Mental Health Services Administration, said a key question for policymakers
is, What screening and services for what cost are most likely to ameliorate
the burden of disease? She presented information that policymakers could use
in determining how to shift to a resource distribution that reflects concerns
about disease burden.
Like Maxwell, she noted the shift to the public sector as the dominant
source of funds for mental health and substance abuse services and the
importance of Medicaid as a source of those funds.
She also pointed out that the number of federally funded community health
centers is projected to double by 2006. Those centers are mandated to provide
mental health and substance abuse services.
Everett commented that an ethical basis of government-funded programs is to
promote fairness and justice. That ethic translates into efforts to"
level the playing field" by helping people, such as those with
disabilities, who are at a disadvantage. ▪