Striking changes have occurred in the delivery of mental health care over the past few decades. Fifty years ago, most individuals receiving care for mental disorders obtained treatment from a specialty provider in an inpatient setting. Of the 1.7 million psychiatric patient-care episodes in 1955, 77 percent were in 24-hour hospital services. At that time, government-owned psychiatric hospitals and specialty mental health clinics accounted for 84 percent of mental health spending. Today, most individuals receive mental health care on an outpatient basis and live in a community setting. Services delivered in public psychiatric hospitals account for less than 15 percent of total spending. Instead, delivery of mental health care in general hospitals and nursing homes, and by primary care clinicians, psychologists, psychiatrists, and social workers provides a broader array of treatment options. Likewise, the development of insurance-based financing (including Medicaid and Medicare) has fostered the emergence of markets providing greater autonomy and choice to individuals with mental illnesses as consumers of health care. Even the most severely ill individuals are able receive community-based care financed through public insurance.
This Issue Brief was prepared for The Commonwealth Fund/John F. Kennedy School of Government Bipartisan Congressional Health Policy Conference, January 15–17, 2004.