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Chapter 10
Mental Health Services

CHAPTER OBJECTIVES
Gain knowledge about the origins, basic
components and organization of the U.S. mental
health services industry and its financing
Understand the nature of mental illness, its
prevalence and evolution of treatment
modalities
Gain appreciation for barriers to mental illness
care
Review effects of the ACA on mental health
services access and reimbursement

Current Background
Mental health terminology changes:
Mental health care now often
behavioral health care with psychiatric
care, a medical subspecialty, one aspect
of integrated services
Patient replaced by consumer or
person/people with a psychiatric or
substance abuse disorder or mental
health issue
Problem-based diagnosis model
replaced with strength-based model in4

Historical Overview (1)

Colonial era to 1800s: mentally ill
confined to almshouses, jails,
hospitals with no treatment, decrepit
conditions
1800s: Quakers advocated moral
treatment, est. 1814 Philadelphia
asylum.
WWI: shell shock in returning
military focused new attention on
mental illness

Historical Overview (2)

1930s: First effective biological
treatments: insulin coma, druginduced convulsions,
electroconvulsive therapy
Post WWII, National Mental Health
Act of 1946:
National Institute of Mental Health
Dept. of Veterans Affairs
psychiatric hospitals and clinics
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Historical Overview (3)

By 1950, still primarily inpatient-1/2
M+ in state, county mental hospitals
New drugs for schizophrenia, other
psychotic disorders allowed
ambulatory treatment
Partial hospitalization
After-care programs
Transitional residences
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Historical Overview (4)

1955: Joint Commission on Mental
Illness & Health est. by Congress, the
first time a federal body considered
resources for the mentally ill
Attacked poor quality in county &
state psychiatric hospitals

Historical Overview (5)

1960s
Mental health care reforms supported by
President Kennedy
Additional, new pharmaceutical treatments
Federal Mental Retardation Facilities,
Community Mental Health Centers
Construction Acts
Medicare, Medicaid, SSI, Social Security
Disability & housing subsidies accessible
for mentally ill
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Historical Overview (6)

1960s-1970s-Unproven assumptions guided
care
Beliefs that 1) psychiatric disorders lie on a
quantitative continuum with severe mental
illness not qualitatively different from lesser
severe mental distress, 2) early intervention
could prevent development of severe illness;
both beliefs later proven invalid
Federal financial investments in communitybased services hoping to prevent severe mental
illness through primary prevention
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Historical Overview (7)

Until 1980s, payments on basis of units of
service; no incentives for limiting treatments
that went on for years; 1955-1980: treatment
episodes quadrupled.
Insurers balked with payment limits,
discounted fee-for-service payments different
from other medical care, carve-outs
outsourcing coverage to specialty managers,
and capitation; non-parity for mental health
services was established to plague the
mental health industry for decades.
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Historical Overview (8)

Deinstitutionalization (1970s-1980s)
Medicaid incentives to move patients
from psychiatric hospitals to community
boarding and nursing homes; community
mental health centers inadequately
staffed for severely mentally ill
Large numbers incarcerated, homeless
1950: 77 % inpatient, 23% outpatient;
1990: 21% inpatient, 7 % partial
hospitalization, 67% outpatient
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Historical Overview (9)

Breakthrough developments- 1980s
NAMI, NIMH, clinical researchers
advocacy re-defined mental illness from
quantitative continuum to discontinuous
in development; mental illness as
biologically based, disorders more
clearly defined requiring targeted
treatments, not unfocused talk
therapies.
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Historical Overview (10)

Carters Presidential Commission on
Mental Health sought applications of
new research findings to benefit
patients and reduce costs
Recommendations taken by Health &
Human Services to expand psychosocial
rehabilitation programs under Medicaid;
Medicaid payment for outpatient services
expanded; severely ill eligible for SSI
Expanded services severely curtailed in
1980s under Ronald Reagan

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Historical Overview (11)

1990-Present
Focus on severe mental illness with
block grants, federal support for
research, training, treatment, not
erroneous prevention strategies
Medicare Act of 2003 expanded drug
coverage; CHIP increased coverage for
low-income children; WellstoneDomenici Parity Act of 2008 advanced
equitable coverage for mentally ill
ACA of 2010 reinforced insurance parity.15

Recipients of Psychiatric and

Behavioral Health Services (1)
Epidemiological Catchment Area &
Co-morbidity Studies report:
26.2% of Americans will have a mental
disorder during any one year period,
57.7 M people
6%, subgroup classified as having
serious mental illness with symptoms
(excluding substance abuse) for at least
12 months.
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Recipients of Psychiatric and

Behavioral Health Services (2)
Neuropsychiatric disorders: the leading
cause of disability in the U.S. and Canada
measured in units encompassing the total
burden of disease, defined as Disabilityadjusted life years (DALYs); contribute 2x
DALYS of cardiovascular disease &
cancers.
DALYS = total number of years lost to
illness, disability, or premature death in
a given population (Fig. 10-1)
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Recipients of Psychiatric and

Behavioral Health Services (3)
Diagnosis and Treatments
As effective as physical health
treatments; criteria provide predictability
of natural history of illness and treatment
Classified in 17 categories; diagnostic
criteria for over 450 conditions
Co-morbidity: the co-existence of two
diagnoses; ~1/2 of mentally ill have an
additional disorder; e.g. substance abuse
of 23-80% with other disorders
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Recipients of Psychiatric and

Behavioral Health Services (4)
Mental illness costs
In addition to unquantifiable
personal and family suffering, $
300 B annually for disability
payments, health care
expenditures and lost earnings.

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Treatment Services
Who does and does not get
treatment?
45.6 M people over 18 years met
criteria for one psychiatric disorder
in the past 12 months19.6% of
adult population; only 38.2% able
to access treatment.
Access to treatment worst among
underserved groups: minorities,
low income, uninsured, rural

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Barriers to Care (1)

Barriers: provider availability;
financial, lack of health insurance;
stigma; misunderstandings about
treatability; personal & provider
attitudes; cultural issues; poorly
organized systems of care
Substance abuse and addictions:
providers view as moral, not chronic
disease issues; removal from treatment
often follows relapse
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Barriers to Care (2)

Children and Adolescents
Service use data available first in 1999 from
NIMH survey: only 9% able to access some
services: half of those with diagnosed mental
illness; school system is largest provider
2009 study: prevalence in 4-17 year olds
increased 40% through diagnosis by primary
doctors
Clinical research for children & adolescents lags
far behind adults; inadequate numbers of trained
professionals for size of population at risk
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Barriers to Care (3)

Older Adults- 25% with significant
psychiatric disorders
Diagnosis & treatment difficult due to
other conditions
Complications from drugs to treat
medical conditions
Fear of stigma
Stereotypes about aging

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The Organization of
Psychiatric and Behavioral
Health Services

Four major delivery system Sectors:

1. Psychiatric and behavioral health
2. Primary care
3. Human services
4. Voluntary support network

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Psychiatric and Behavioral

Health Sector (1)
Behavioral health professionals, e.g.
psychiatrists, psychologists,
psychiatric nurses, psychiatric social
workers, behavioral health clinicians;
also peer specialists
Provide majority of outpatient care in
private or public clinics; acute care in
designated in-patient hospital beds in
community and public hospitals;
residential treatment centers for
children and adolescents

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Psychiatric and Behavioral Health

Sector (2)
Multi-service facilities provide or
coordinate a range of outpatient,
intensive case management , partial
hospitalization, or inpatient services.
Increased focus on independent living
accommodations in apartments with
case managers to assist with daily living
skills

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Primary Care Sector

Health care professionals, e.g.
private practice internal medicine,
family practice doctors, nurse
practitioners, pediatricians, clinics,
hospitals, nursing homes
Often the initial and only point of
contact for mental health services
Rates of mental illness diagnosis in
primary care in past decade: doubled for
children and increased almost 30% for
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adults

Human Services Sector

(1)
Staff of social services agencies,
school-based counseling services,
residential rehab services, vocational
rehab services, criminal
justice/prison-based services,
religious professional counselors
2008 recession reduced state funding &
increased barriers to care from this
sector with loss of support for housing,
medical care and medications
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Human Services Sector

(2)
Increased homelessness; lost
medication support led to
recurrence of symptoms among
those previously stable
Increased petty crimes and
incarcerations in prison system illequipped for treatment, with very
high costs
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Volunteer Support Network

Sector
Self-help groups, family advocacy
groups
Powerful in shifting public attention to
people with persistent and severe
mental illness
Major impacts on Congress and funding
appropriations for research on mental
illness and substance abuse through the
NIMH
State legislature lobbying against cuts in
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service programs and general

Paradigm Shifts (1)

Since 2008, shifts toward turning the
mental health system into a more
integrated, effective care system
Recovery Oriented Systems of Care
(ROSC)
Initiated by Bushs Freedom
Commission on Mental Health. 2004
National Consensus Conference cited
recovery as most important goal for
transforming mental illness care in
America.

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Paradigm Shifts (2)

Recovery Oriented Systems of Care, contd
Focus on choice, consumer strength-based
empowerment, establishing hope for a better
life to guide treatment planning; goal to
empower with choices and vision for hopeful
future; link consumers strengths with family,
community resources.

Patient Protection and Affordable Care Act

(ACA)
Provides psychiatric benefits with parity
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Paradigm Shifts (3)

Patient Protection and Affordable
Care Act, contd
ACOs care continuum will benefit
mental health service recipients with
coordination of services through primary
care and with multiple providers

Integration of Primary Care and

Behavioral Health Services
ACA provisions on parity support service
integration;
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Paradigm Shifts (4)

Integration of Primary Care and
Behavioral Health Services
ACA provisions on parity support service
integration, diffusing prior issues with
behavioral health professional
reimbursement for primary care services
PCMH puts behavioral health
practitioners on the team of providers
eligible for reimbursement
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Financing Psychiatric and

Behavioral Health Services (1)
Funding sources: private health
insurance, Medicaid, Medicare, state
and county funding, contracts and
grants
Non-parity existed for many years,
denying the chronic nature of mental
illness compared with medical
conditions; dates to 1950s
Parity: requirements that insurers cover
mental health at the same levels as
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general medical care

Financing Psychiatric and

Behavioral Health Services (2)
Mental Health Parity Act, 1996:
Equated aggregate lifetime limits,
annual limits with general medical care
Allowed cost-shifting loopholes: e.g.,
limits on psychiatric inpatient days,
prescription drugs, raising co-insurance
& deductibles; did not require
employers to offer mental health
coverage or coverage for substance
abuse disorders
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Financing Psychiatric and

Behavioral Health Services (3)
Mental Health Parity and Addiction Equity
Act, 2008 (built upon 1996 Act)
End health insurance benefit inequity
between mental health/substance abuse
plans and medical/surgical plans
Equal coverage applicable to all
deductibles, copayments, coinsurance
and out-of-pocket expenses and all
treatment limitations
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Financing Psychiatric and

Behavioral Health Services (4)
Mental Health Parity and Addiction Equity
Act, 2008 (built upon 1996 Act), contd
Parity for annual & lifetime dollar limits
Broad definition of mental health &
substance abuse benefits
MH coverage not mandated, but if
offered must be equal with medical
coverage
Out-of-network coverage must be equal
Preserves existing state parity laws
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Financing Psychiatric and

Behavioral Health Services (5)
Public Funding of Mental Health Care
Recession effects on State budgets:
unemployment, financial markets impact
Kaiser 50-state study:
Sharp Medicaid outlay increases due to
recession, declines in employment
American Recovery and Reinvestment
Act assistance insufficient to stem state
crises
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Financing Psychiatric and

Behavioral Health Services (6)
Public Funding of Mental Health Care,
contd
Rockefeller Institute Study of Gap
scenarios after federal stimulus:
Low gap: $ 70 B shortfall: 4% of
expenses
High gap: $ 100 B shortfall: 7% of
expenses
States are reducing psychiatric hospital &
behavioral health services funding in
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response to budget shortfalls

Financing Psychiatric and

Behavioral Health Services (7)
The ACA is a game-changer
$100 B appropriation over 10 years & $100 B
discretionary funds will extend insured health
services to millions of mentally ill persons
ACA health insurance exchanges and Medicaid
expansion will open care access to many
mentally ill adult, child and adolescent persons
Use of non-quantitative treatment limitations
by insurers to curtail benefits must be
monitored and addressed

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Financing Psychiatric and

Behavioral Health Services (8)
Cost Containment Mechanisms
Managed care systems (public and
private) tightly control & monitor
services for mentally ill; use
subcontractors, Managed Behavioral
Healthcare Organizations (MBHOs) to
manage behavioral health patients
through carve-outs; research indicates
that MBHOs successfully facilitate
service access and coordinate care for
patients in need.

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The Future of Psychiatric and

Behavioral Health Services
Shift to a Recovery Model provides
for a strength-based system with
client-directed goals paramount
Move toward psychiatric care more
integrated with primary care
ACA will assure Americans of access
to services and bring disenfranchised
mentally ill persons into the
system.
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