- For those with comorbid behavioral and physical health issues, a disproportionately low amount is spent on behavioral health care.
- Identifying patients with comorbid conditions sooner and ensuring behavioral care access is offered may reduce overall health care costs.
- Even with telehealth, the need and demand for behavioral health services still far exceed capacity.
In 2020, a Milliman study of 2017 claims data from 21 million people ages 2 to 64 found that while only 27 percent had a behavioral health condition, those patients accounted for 56.5 percent of total health care expenditures (Stoddard et al., 2020). Most of those costs were for medical and surgical services. Behavioral health conditions were highly correlated with total spending, yet little was invested in proportion: Only 4.4 percent of health care costs were attributed to behavioral health services.
Among those with comorbid behavioral health and physical health conditions, a disproportionately high percentage was spent on physical health–related treatment (e.g., emergency department, surgery, labs, office visits), and a disproportionately low amount was spent on behavioral health care.
Different types of services and procedures have different costs—a physician’s education costs and pay extends in the upward realms when compared to a master’s-level mental health therapist, for example. And the types of laboratory tests, medications, and emergency procedures carried out in medicine add to the cost of supplies and of specialists and critical medical infrastructure, including high-cost clinics, sterilization services, nurses, and much more, whereas outpatient mental health and addiction services involve lower-cost staff, facilities, and fewer supplies.
Yet Henry Harbin, M.D., former CEO of Magellan Health, called the Milliman results “astonishing,” explaining, “This is despite having been diagnosed or treated by a healthcare professional for a behavioral illness" (National Alliance of Healthcare Purchaser Coalitions, 2020). Understanding this disconnect requires further analysis of the gaps between behavioral health care needs and availability, as well as where money is spent across the care continuum.
There is a common misconception that patients with more severe mental illness such as bipolar and other mood disorders or schizophrenia and other psychotic disorders drive most health care costs among patients with comorbid conditions; in fact, they represent a very small percentage. Individuals studied with physical and behavioral health conditions may be relatively easy to treat since the data indicate that most of them have less severe mental health and substance use– related conditions; yet, according to that 2017 data, many simply did not receive any or much treatment at all.
Identifying patients with comorbid conditions sooner and ensuring behavioral care access is offered for many conditions may eventually reduce overall health care costs—some have estimated that effective medical behavioral health integration could save $38 to $68 billion (Melek et al., 2018).
The Patient Protection and Affordable Care Act (2010) encourages development of integrated approaches, especially driven by primary care, as one means of improving quality and lowering overall costs. Still, it’s not yet clear whether expanding integrated care will lead to significantly improved health outcomes.
What is clear is that current system capacity is insufficient—a recent Department of Health and Human Services (HHS) data review (Bouchery, 2021) found several indicators suggesting the mental health treatment system does not have the capacity to address current rates of treatment:
- There are rising numbers of young adults with perceived unmet needs for mental health treatment.
- Inpatient and residential beds designated for mental health treatment have high utilization rates.
- There are low rates of 30-day follow-up after hospitalization for mental illness.
Even before the pandemic, the trend was that while the use of mental health treatment increased steadily, availability did not keep pace with need.
The pandemic greatly accelerated telehealth utilization in the years since (Samson et al., 2021), yet many signs indicate that need and demand for behavioral health services still far exceed capacity (APA, 2021).
In 2018, Sue Birch, director of Washington State’s Health Care Authority, cast this vision: “We want to move from encounter-based, volume-driven work to value-based work." This has been the standard talking point of health care transformation initiatives. At its worst, it has justified ramrodding insufficiently proven transformation schemes aimed primarily at cost savings rather than improving access to or quality of care. In practice, it has too often served, in effect, as a smokescreen for reductions in adequate and predictable funding for services that people need, and sometimes in reductionism about the ways in which mental health and addiction services are delivered.
Furthermore, transformation initiatives give lip service to the social determinants of health (SDoH), yet too often capitulate to models of transformation that are, in practice, little more than another kind of siloing, with another set of problems, with negligibly better research outcomes once you adjust for observer effects, confirmation bias, design failures and conflicts of interest.
We chase value in a vacuum. Whole-person care innovation efforts are more clinically focused than anyone cares to admit. Birch hit the nail on the head when she proclaimed, “When we overmedicalize, we take dollars away from addressing environmental and social needs.” Investments in nonclinical, community-based systems that directly impact SDoH remain largely inadequate; a great deal of social services infrastructure remains woefully neglected.
A small minority of those studied by Milliman drove a significant majority of total costs, and most of that small minority had comorbid behavioral health conditions, with no or minimal spending on behavioral health services for that group. While the methodology did not allow researchers to attribute causality between behavioral health conditions and very high medical spending, it is sufficiently clear through the methodology of common discernment that access to services for behavioral health conditions prevalent among the population is an important strategic priority in managing total health care costs and, more importantly, maximizing positive outcomes for patients.
While it may be disputed whether this conclusion is “value-based,” it is indisputably values-based. Expanding access to care should be our No. 1 priority. Anything that hinders that is a distraction.
Also published in MGMA Connection, by Medical Group Management Association, as "Valuing access to behavioral healthcare over 'transformation.'" Adapted for Psychology Today. Appears courtesy of MGMA.
American Psychological Association. “Worsening mental health crisis pressures psychologist workforce: 2021 COVID-19 practitioner survey.” Oct. 19, 2021. Available from: bit.ly/3wKfgIs.
Birch S. “Transforming the health care delivery system.” Pediatric Population Health Forum 2018, Yakima, Wash.: Washington Chapter of the American Academy of Pediatrics. September 22, 2018.
Bouchery E. “Mental health treatment need and treatment system capacity.” ASPE Issue Brief. March 2021. Available from: bit.ly/3IOnZvk.
Melek SP, Norris DT, Paulus J, Matthews K, Weaver A, Davenport S. “Potential economic impact of integrated medical-behavioral healthcare: Updated projections for 2017.” Milliman Research Report. January 2018. Available from: bit.ly/3uRax5h.
National Alliance of Healthcare Purchaser Coalitions. “Study reveals individuals with behavioral health conditions in addition to physical conditions drive high total healthcare costs; Small portion spent on behavioral health treatment, vast majority spent on physical treatment.” Aug. 13, 2020. Available from: bit.ly/3uuiWve.
Patient Protection and Affordable Care Act of 2010, Pub L No. 111-148 (2010). 2010. Available from: bit.ly/3wDG6Sx.
Samson LW, Tarazi W, Turrini G, Sheingold S. “Medicare beneficiaries’ use of telehealth in 2020: Trends by beneficiary characteristics and location.” ASPE Issue Brief. December 2021. Available from: bit.ly/3uDueNy.
Stoddard D, Gray TJ, Melek SP. “How do individuals with behavioral health conditions contribute to physical and total healthcare spending?” Milliman Research Report. August 2020. Available from: bit.ly/3uv3rmF.