The public sector and mental health parity: time for inclusion

BACKGROUND: In the United States, there is an uneasy division of responsibility for financing mental health care. For most illnesses, employer-sponsored health insurance and the large federal health insurance programs (Medicare, Medicaid) cover the costs of care. However, most employer-sponsored plans and Medicare provide only limited coverage for treatment of mental illness. A possible cause and result of this limited coverage in mental health is that states, and in some cases local (county) governments, finance a separate system of mental health care. This separate "public mental health system" provides a "safety net" of care for indigent individuals needing mental health care. However, there are potential negative consequences of maintaining separate systems. Continuity of treatment between systems may be impaired, and costs may be higher due to duplicate administrative costs. Maintaining a separate system managed by government may exacerbate the stigma associated with mental illness treatment. Most significantly, since eligibility for care may be linked to poverty status, and since having a serious mental illness may preclude regaining private coverage, maintaining a separate system may contribute to the poverty rate among persons with mental illnesses. AIMS OF THE PAPER: These potential problems have not been widely considered, perhaps because other problems and controversies in mental health care have captured our attention. In particular, controversies over deinstitutionalization in mental health have dominated the policy debate, especially when linked to related problems. These have included conflicts over authority and financial responsibility among federal, state and local governments, sensationalized media coverage of incidents involving people with mental illness, problems with siting community facilities, concern about mental illness among prisoners and the like. However, with the substantial reform of public mental health care in some states and localities, it is now possible to consider the implications of public and private integration. This paper considers such an approach. METHODS: This paper addresses the question of public and private integration, considering the state of Ohio as a case study. Ohio is a large state (population 11.2 million) and shares demographic, cultural and political characteristics with many other states. Ohio's successful experience implementing community mental health reform makes it a good candidate to use in evaluating issues in the potential integration of insurance-paid and public mental health care. RESULTS: The analysis indicates that the resources now used in Ohio's public system may be sufficient to support insurance financing of inpatient and ambulatory mental health treatment (the types of health care usually paid by insurance) while maintaining supportive services (e.g. housing, crisis care) as a residual safety net. DISCUSSION: At the current time, these resources are in state and local mental health budgets, and in the Medicaid program that finances health care for low income and disabled individuals. The analysis indicates that the aggregate level of resources expended on inpatient and ambulatory mental health treatment are substantially greater than expenditures for such care in an insurance plan for Ohio State employees. A substantial limitation of the analysis is that it is not possible to compare the need for care in a relatively healthy employed population versus a poor and disabled population. CONCLUSION: The paper concludes that there are substantial structural, economic and social problems associated with the "two-tiered" system of commercial/employer-paid insurance and public mental health care in the United States. Examining data from one state's public system, the paper further concludes that it might be feasible to finance a single system of acute and ambulatory mental health benefits, if public resources were redeployed and private contributions were continued. IMPLICATIONS FOR POLICY AND RESEARCH: Given the substantial problems associated with the two-tiered American approach to mental health care, further consideration and analyses of the feasibility of public and private integration are suggested. Given the complexity of this effort, much more sophisticated analysis is needed. However, given the possibility that sufficient resources may now be available to accomplish integration, further work is suggested.