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2015-07-08 Dominic Hodgkin Part 2 Applying Economics to Mental Health Care


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Part 2 of Prof. Dominic Hodgkin's workshop on topics in the economics of mental health care, presented to the Myers-JDC-Brookdale Institute on July 8, 2015.

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2015-07-08 Dominic Hodgkin Part 2 Applying Economics to Mental Health Care

  1. 1. Applying economics to mental health care Dominic Hodgkin Professor Institute for Behavioral Health Heller School of Social Policy and Management Brandeis University Presentation for Myers-JDC-Brookdale Institute Jerusalem, July 8, 2015
  2. 2. Topic • Economic analysis of mental health care • How is it different from economic analysis of health care in general?
  3. 3. Outline of talk • Do we care whether economics applies to mental health? • Aspects of mental health care – Nature of treatment – Nature of demand – Nature of supply – Government role • Conclusions
  4. 4. Do we care whether economics applies to mental health? • If it does apply, that would be useful for: – Projecting need and demand, to plan what workforce and facilities are needed – Anticipating response of patients, plans, or providers to economic incentives – Using payment approaches to allocate resources more appropriately • Could be easier than changing attitudes
  5. 5. Standard economic approach • Identify key characteristics of the product or service (storable? Homogeneous? etc.) • Identify influences on demand – Nature of the product, tastes, substitutes etc. • Identify the influences on supply – Production technology, cost structure, etc. • Characterize market conditions – Monopoly, oligopoly, competitive etc.
  7. 7. Nature of treatment Goods and services • A lot of mental health care is delivered as personal services – Non-storable, non-retradable, potentially customized to each patient • But medications are important too – Storable, retradable, homogeneous
  8. 8. Nature of treatment Uncertain effectiveness • Many treatments have effectiveness that varies across patients (treatment heterogeneity) • It may not be obvious which treatment is best • Finding the right treatment requires trial- and-error
  9. 9. Nature of treatment Uncertain effectiveness: Example • STAR-D: a ‘naturalistic’ clinical trial of treating depression with medications – All patients started on citalopram • After 14 weeks on citalopram, 33% of patients achieved remission 1 • Among those who didn’t respond to citalopram, ~ 1 in 4 achieved remission after switching to another drug 1. Trivedi, 2006
  10. 10. Nature of treatment Informational asymmetry • Patients are commonly assumed to know less than providers about treatment options – Likely to be true for MH too – Patient may not be able to judge quality of care • But there are also ways in which the provider knows less than the patient – Must rely on patient report of symptoms, more so than in other health care
  12. 12. Nature of demand Rationality • A common concern: how reasonable is it to assume rational decision-making by individuals with severe mental disorders? • Possible responses: – They may still make some decisions rationally – They may get help in deciding, e.g. from family – Even people without disorders may not meet all rationality assumptions! (behavioral econ.)
  13. 13. Nature of demand Derived demand • Most people seek treatment as a means to an end: better health (‘derived demand’) – Not because treatment itself is pleasurable • So demand will be influenced by beliefs about the effectiveness of treatment, and the benefits of a cure • General public may be more skeptical about effectiveness of MH care than other care
  14. 14. Nature of demand Beliefs about treatment effectiveness • In US: 28% in one survey said that fewer than half of people who see a professional for a mental health problem are helped 1 – 13% said fewer than one quarter are helped • In Australia, 25% of general public thought that depression would not be helped by seeing a psychiatrist 2 – 61% thought antidepressants would help 1. Mojtabai 2007. 2. Morgan 2013.
  15. 15. Reasons for Not Receiving Mental Health Services in the Past Year among Adults Aged 18 or Older with an Unmet Need for Mental Health Care Who Did Not Receive Mental Health Services: 2012 Source: SAMHSA, 2014
  16. 16. Nature of demand Coerced demand • Some individuals receive mental health treatment by order of the courts (commitment laws) • Or due to pressure from employer, family • For these patients, the demand curve isn’t solely be determined by patient preferences – But can’t ignore them either • This is much rarer in general health care
  17. 17. Among chronically mentally ill patients in public sector, % experiencing coercion into treatment 23% 15% 12% 7% 44% 40% 30% 20% 19% 59% 0% 10% 20% 30% 40% 50% 60% 70% Housing at risk Criminal sanctions Outpatient commitment Withholding access to money Any of the above Minimum Maximum Source: Monahan, 2005
  18. 18. Nature of demand Provider influence on demand • In health economics, a common idea is that providers can influence patients’ demand • Is this true for mental health too? • Patients might be less informed about MH treatments, and so, easier to influence • But MH conditions also often make patients more reluctant to be in treatment, or to adhere to it
  20. 20. Nature of supply Role of non-physician providers • A large proportion of mental health care is delivered by non-physician providers – Psychologists, social workers, psychiatric nurses • These providers often work autonomously – Unlike non-MD providers in other health care • But in many countries they can’t prescribe medications (which reduces substitutability)
  21. 21. Mental health professionals in the US 8 3 29 18 0 5 10 15 20 25 30 35 Psychiatrists Psychiatric nurses Psychologists Social workers Providersper100,000 population Source: WHO Mental Health Atlas, 2011
  22. 22. Supply Importance of specialty hospitals • Historically, a large proportion of inpatient mental health care has occurred in specialty hospitals • This has changed in many countries with deinstitutionalization – Shift to care in the community (or homeless) – Greater use of general hospitals (promoted by WHO and others) • But specialty hospitals remain more important for MH than for medical care
  23. 23. Location of psychiatric beds, by type of hospital, 2011 42% 10% 58% 90% 0% 20% 40% 60% 80% 100% 120% US Israel Percentofbeds Mental hospitals General hospitals Source: WHO Mental Health Atlas, 2011
  24. 24. Danvers State Hospital, Massachusetts (closed 1992)
  26. 26. Government role Government as provider • In many countries, government is/was the dominant operator of mental hospitals – even if general hospitals are private – Israel: 81% of psychiatric beds were in public hospitals, in 2006 1 – US: over 80% in 1970, now under 30% 2 • In Israel, the government also operated the largest network of community mental health centers… until last week 1. Aviram, 2010. 2. Frank & Glied, 2006
  27. 27. Government role Government as payer • In the US, government accounts for a larger share of spending for MH (60%) than for other medical care (49%) 1 • Individuals with mental disorders are less likely to have private insurance, more likely to be uninsured or publicly insured • Government is similarly the main funder of MH care in many other countries 1. Levit 2013
  28. 28. Who pays for care: Mental health versus other medical care, 2009 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Mental health Other medical care %ofspending Client out-of-pocket Private insurance Other private Public Source: Levit et al., 2013
  29. 29. Government role Government as regulator • Government regulates the MH sector: – Insurance markets: e.g. parity laws, mandated benefits, insurance exchanges – Workforce: e.g. licensing, accreditation laws – Treatment: e.g. commitment laws • In the US, a lot of regulation occurs at state rather than federal level
  30. 30. Government role Why the large government role in MH? • For US, Frank & McGuire1 offer 3 reasons: – Different ‘treatment technology’: Many MH patients have special additional needs around housing, income support, etc. – Incumbency: state governments set up hospitals before private insurance existed – Externality: there’s a ‘public safety’ component to MH care (protect patient from him/herself, or society from him/her) 1. Frank & McGuire, 2000
  32. 32. Market structure Markets for pharmaceuticals • Markets for branded medications are oligopolistic: – High entry barriers, few products, some differentiation (rival molecules) • Markets for generics are more competitive – Generics for the same molecule are close to interchangeable, and entry barriers are lower • Generic share is increasing for psychiatric drugs – Older drugs are losing patent protection – Few new psychiatric drugs in the pipeline1 1. O’Brien, 2014.
  33. 33. Generic share of psychotropic medication classes (US, 2012) 18% 94% 95% 62% 0% 63% 96% 98% 43% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Addiction meds Sedative/hypn/anxio Antimanics ADHD:stimulant ADHD:nonstimulant Antipsychotic: Other Antipsychotic: Combinations Antidepressant: Other Antidepressant: SNRI Antidepressant: SSRI
  34. 34. Market structure Markets for outpatient therapy • Outpatient therapy is offered by many small programs and individual providers • In rural areas, a few providers may have some market power – Some areas have trouble attracting MH providers • In urban areas, potentially more competition • But there is room for a lot of differentiation, creating patient loyalty to specific therapists or programs
  35. 35. Market structure Labor supply/workforce • Credentialing and certification place limits on supply of some provider types – But in US, many substance abuse providers have less formal training (including many ‘in recovery’) • This limits ability to rapidly expand workforce • Health reform is giving more people access to MH treatment – will the workforce expand to meet the demand?
  36. 36. 5. CONCLUSIONS
  37. 37. Conclusions Classifying the features of MH care Inherent (?) • Information asymmetry • Coerced demand • Provider influence • Role of non-physician providers • Uncertain effectiveness Mutable • Government role in provision, payment • Specialty hospitals' role • Beliefs about effectiveness
  38. 38. Conclusions • Mental health care differs from medical care in some important ways that affect economic analysis – Some of these aspects are inherent – Some are ‘mutable’, vary by country • They complicate economic analysis but don’t render it useless
  39. 39. References (1) • Aviram, U. (2010). Promises and pitfalls on the road to a mental health reform in Israel. Israel journal of psychiatry and related Sciences, 47(3), 171. • Frank, Richard G., and Sherry A. Glied. Better but not well: Mental health policy in the United States since 1950. JHU Press, 2006. • Frank, R. G., & McGuire, T. G. (2000). Economics and mental health. Handbook of health economics, 1, 893-954. • Levit, Katharine R., et al. "Federal spending on behavioral health accelerated during recession as individuals lost employer insurance." Health Affairs 32.5 (2013): 952-962. • Monahan, John, et al. "Use of leverage to improve adherence to psychiatric treatment in the community." (2014).
  40. 40. References (2) • Morgan, A. J., Reavley, N. J., & Jorm, A. F. (2013). Beliefs about mental disorder treatment and prognosis: Comparison of health professionals with the Australian public. Australian and New Zealand Journal of Psychiatry 48: 442–451. • O'Brien, P. L., Thomas, C. P., Hodgkin, D., Levit, K. R., & Mark, T. L. (2014). The diminished pipeline for medications to treat mental health and substance use disorders. Psychiatric Services. • Rosen, Bruce, et al. "The Israeli mental health insurance reform." Journal of Mental Health Policy and Economics 11.4 (2008): 201. • Substance Abuse and Mental Health Services Administration (SAMHSA), Results from the 2013 National Survey on Drug Use and Health: Mental Health Findings. 2014. • Trivedi, Madhukar H., et al. "Medication augmentation after the failure of SSRIs for depression." New England Journal of Medicine 354.12 (2006): 1243-1252. • World Health Organization. Mental Health Atlas, country profiles. 2011.