[Original post: Isabel M. Perera, Two Dogmas Of Mental Health Policy, Health Affairs Blog, March 2, 2020. https://www.healthaffairs.org/do/10.1377/hblog20200228.501172/full/  Copyright ©2020 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.]

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As the presidential race heats up, candidates are weighing in on how they would reform the nation’s broken mental health system. Pundits have linked its flaws to a range of headline issues. Behavioral health care shortages purportedly exacerbate the increased frequency of mass gun violence, the negative effects of social media, and even the anxieties produced by the economic, environmental, and immigration landscape. The mental health system is far from the cause of those problems, but politicians (on both sides of the aisle) are rightly concerned about how to end the policy chaos that leaves millions of Americans untreated, and often homeless or incarcerated instead. 

Many of these policy proposals, however, contain unexamined assumptions about our current system and how it operates. In previously published research in the Lancet Psychiatry and Psychiatric Services, I used cross-national data from the World Health Organization (WHO) and the Organization for Economic Cooperation and Development (OECD) to examine the economic assumptions that guide mental health policy making and found reason to doubt two common beliefs: one, about the importance of private payers, and the other, about the relationship between inpatient and outpatient care. 

Behavioral Health Capacity Depends On Public, Not Private, Finance

Although some presidential candidates are exploring the concept of a publicly funded Medicare for All, virtually all of them point to the failures of private insurers to adequately fund psychiatric care. This claim has contributed to the movement to achieve mental health “parity,” in which private insurance plans provide mental health benefits on par with medical and surgical benefits. This is a noble goal and would increase access to costly psychotherapies. But as I show in the Lancet Psychiatry article, the high cost of behavioral health services is precisely why it requires public funding. 

From an economic standpoint, the mental health market is different from the general health market. This is true both in the United States and abroad: Around the world, regardless of whether the rest of a country’s health sector is publicly or privately financed, it is usually the government that pays for mental health services. When I compared the relationship between public spending and hospital bed supply in OECD countries, I found that the extent of public general health financing predicts the general bed supply by 6 percent, whereas the extent of public mental health financing predicts the psychiatric bed supply by almost 40 percent. In other words, more government spending is associated with more mental health care, but not more general health care. 

Why is the public sector so important to mental health? People with chronic psychiatric needs rarely have the means to afford their own care. As I discuss in the Lancet journal, mental disability inhibits workforce entry, limiting the income available to cover private and out-of-pocket health care costs. Moreover, long-term mental health treatment requires different, often more complex resources than other health care. Although private financing plays an important role in pharmaceutical coverage, public financing of behavioral health services is common and necessary. 

Hospital And Community Care Appear To Be Complements, Not Substitutes   

The presidential candidates are equally enthusiastic about expanding access to community-based psychiatric services, in lieu of hospital-based care. Community-based care, which includes outpatient clinics, day care centers, sheltered workshops, and clubhouses, are essential to mental health. But many candidates and policy makers assume a trade-off: these services will increase only if hospital services decrease. As I show in Psychiatric Services, countries that tend to provide high levels of psychiatric hospital services also tend to provide high levels of community care. Hospitals and community care appear to have a complementary relationship—contrary to decades of received wisdom. 

Community care emerged in the late twentieth century in affluent countries, when financial considerations, human rights movements, and the development of antipsychotic medications led to the deinstitutionalization of people who had been housed in “insane asylums.” By rejecting institutional care, reformers wanted to lessen the likelihood of abuse, destigmatize mental health care, and promote a more humane, cost-effective system. Although some analysts have pointed to the negative aspects of deinstitutionalization (such as the increased risk of homelessness, neglect, or imprisonment), arguments to “bring back the asylum” are met with intense skepticism. Critics worry that its return could hamper the development of community-oriented services. 

Data from the WHO Mental Health Atlas, a comprehensive international survey of mental health services, show a direct positive association between the supply of inpatient and outpatient care in 15 advanced economies (the countries that first deinstitutionalized, and hence reframed global expectations in this area). The link between community and hospital psychiatry remains positive, even when “non-hospital residential facilities,” which combine non-medical social care with overnight care, are included in either category.    

These data suggest that expanding the supply of some types of specialized psychiatric services expands the supply of others, both inside and outside the hospital. The paper offers some preliminary hypotheses about why hospital and community services are positively correlated, although more research is needed to confirm and understand these trends. Qualitative case research on the French mental health system, for instance, has shown that psychiatric hospitals can anchor an extensive community care system when financed by the same public funds. The joint financing arrangement has allowed health administrators to develop a network of mental health “sectors,” which provide sets of comprehensive services for catchment areas of 70,000 people. In the United States, the 1963 Community Mental Health Act sought a similar goal for an identical catchment size. The failure to integrate community mental health centers with the existing psychiatric infrastructure, combined with inadequate public support for the project, has made it difficult to produce the same result in this country. 

More Is More 

To effectively reform the mental health system, policy makers must understand how the current system operates. Proposals that narrowly focus on improving parity in private insurance, or encouraging more community-based care in lieu of hospital care, may help at the margins—but they are not likely to fix a fundamentally broken system. Real policy commitment to this area requires redressing the massive shortage of resources devoted to behavioral health care, which many candidates acknowledge. Proposals to lift the Medicaid ban on payments to “institutions for mental disease” and repeal Medicare’s 190-day lifetime limit on inpatient psychiatric care are on the right track. Allocating funds to inpatient care should not reduce community care—on the contrary, the latter may benefit from the injection of additional resources into the system.   

These findings suggest that more is more: More public funding is associated with more psychiatric services, and more hospital care is associated with more community care. Real reform will require more generous allocation of resources to one of the most neglected and needy areas of the health system.