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c h a p t e r 5 The Supply of Mental Health Services Public and private spending on mental health services and social services that improve the well-being of people with mental illness have expanded tremendously since 1950. An infusion of new funding, coupled with the renewed professional optimism about the potential of mental health treatment that, in part, prompted that funding, spurred a vast expansion of institutional and professional mental health supply. This expansion in supply, in turn, led to greater use of services and lower unit prices for those services, and these developments were beneficial to people with mental illness. In addition, several aspects of the expansion in supply were both peculiar to mental health care and had notable effects on well-being. One distinctive feature has been the role of policy outside the mental health sectors in affecting the supply of services. Changes in institutional and professional capacity have been quite responsive to changes in the expected financial returns from training for a career in this sector, rather than another. Here, too, the mainstream has exerted its force; public policy affecting the return to alternative career investments and treatment capacity outlays has often been as important as any mental health-specific policy in altering the supply of services. People with mental illnesses, as well as those who finance their care, have been the unanticipated beneficiaries of policies aimed at controlling other aspects of health care costs. The nature of the supply expansion in mental health care was unique. The expansion consisted of not only an increase in the number of mental health providers, but also a substantial extension of the definition of what constitutes a mental health care provider. In 1950 the term, when applied to professionals, referred almost exclusively to physicians trained as psychiatrists. Today a wide array of expert providers—from counselors to social workers to psychologists to subspecialty psychiatrists—serve people with mental illness, and the vast major- The Supply of Mental Health Services 71 ity of such specialty providers are not physicians at all. Moreover, in recent years primary care doctors have become increasingly involved in the treatment of mental health problems in their patients. This enlarging of the set of mental health care providers has given people with mental illness unprecedented choices. At the same time, because the lines of demarcation among these professionals are often fuzzy, both public and private purchasers have benefited from competition within and among provider groups. A similar pattern occurred on the institutional side. The provision of inpatient mental health services, once the nearly exclusive province of large public inpatient facilities, became a role shared among the few remaining public facilities , a fluctuating number of private for-profit psychiatric hospitals, and a growing number of general hospital psychiatric units. Except in the case of forensic (i.e., criminal or corrections-involved) patients, it is increasingly difficult to draw sharp distinctions between the populations now served in these varied facilities. A third feature has been the close linkage between mental health suppliers and public policy makers. For all their diversity, mental health professionals share a dependence on public and publicly regulated financing streams and a historic link between public mental hospitals and the medical profession. These strong ties to governmental agencies and to a history of dealing with regulation of professional practices have made mental health professionals unusually adept at securing public benefits. New professional groups have pursued and generally achieved licensure at the state level. They have succeeded in persuading state legislatures to require private insurers to compensate them for their services. They have lobbied, often effectively, to maintain institutions that provide them with staff positions. By capturing regulatory interest and power, mental health professionals were for many years able to maintain economic returns above competitive levels. The ability of professionals to manipulate the political process, or regulatory capture, exacerbate the inherent difficulties of managing a system with a diverse range of patients and providers. As new provider alternatives arise, regulators and purchasers must determine how to set payments and utilization-control policies that optimally allocate resources. In the case of mental health services, differences in the severity of illness have always complicated these financing decisions, as was illustrated by our discussion of CMHCs in chapter 4. The growing array of institutional and professional providers—including the development of new treatment options such as partial hospitalization and manualized psychotherapies—adds a further complication to this regulatory...


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MARC Record
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