An article in the July/August Health Affairs reports that the annual growth rate in expenditures for mental health and substance abuse treatment was 6.8 percent between 1987 and 1997, compared with 8.2 percent for all health care treatment.

Moreover, the proportion of mental health and substance abuse treatment dollars to total health care dollars shrank from 8.8 percent in 1987 to 7.8 percent in 1997.

Bernard Arons, M.D., director of the federal Center for Mental Health Services (CMHS), commented on the report at a press briefing in Washington, D.C., last month.

"This study provides us with the documentation to show that disparities exist in health care spending. This is indefensible because mental health services have been shown to be as effective as other types of health care available to American citizens. This document also points to the need for parity in employee health benefits."

The study was commissioned by CMHS and the Center for Substance Abuse Treatment (CSAT).

The authors attribute the decline in total mental health and substance abuse spending to an approximate 10 percent drop in hospital expenditures and an approximate 5 percent drop in nursing home expenditures. The number of psychiatric hospital days declined by at least one-third between 1987 and 1997. In contrast, outpatient visits for psychiatric care more than doubled, noted the authors.

Arons said that the decline in inpatient treatment reflected in shorter hospital stays was due to managed care cost-cutting efforts by switching patients to partial and day hospitalization and in-home care.

In the same decade, spending for prescription drugs rose from 8 percent to 12 percent of the total amount spent on mental health ($9,076 million of $82,178 million). The number of psychotropic drug prescriptions written by physicians rose from 45 million in 1987 to 73 million in 1997, according to the report.

Arons commented, "Many of those medications are highly effective, but we must not forget that they often need to be used in conjunction with psychotherapy."

The public sector, particularly Medicare, increased its share of reimbursement for mental health treatment by 8.5 percent annually on average compared with 6.8 percent on average for all other health care treatment. In 1997, the public sector paid for 57 percent of the total mental health expenditures ($70.8 billion) compared with 43 percent by the private sector, according to the report. In contrast, the public sector paid for 46 percent of all other health care expenditures, while private insurance paid for 54 percent.

Private health insurance benefits grew more slowly for mental health treatment (4.7 percent) than for all other health treatments between 1987 and 1997 (5.4 percent).

Out-of-pocket spending made up 44 percent of psychiatrists’ revenues in 1997 compared with 40 percent in 1987, the report states.

In contrast, private insurance spending declined for substance abuse treatment at a rate of 0.6 percent annually, according to the report. "This decline in spending meant that an estimated 3.6 million Americans with substance abuse problems in 1997 didn’t get the treatment they needed," said CSAT Director Westley Clark, M.D., Ph.D.

"Too often, families have to mortgage their lives to obtain substance abuse treatment for their loved ones. It is time to fund substance abuse like any other illness," said Clark.