Health care reform for Americans with severe mental illnesses: Report of the National Advisory Mental Health Council

F. K. Goodwin, D. C. Alfred, J. T. Coyle, J. C. Fox, R. L. Hollings, J. S. Jackson, N. Lagomarsino, J. D. Matarazzo, J. L. McGaugh, D. P. Purpura, D. L. Shumway, G. J. Tucker, B. Healy, R. T. Suchinsky, J. A. Scaramozzino

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223 Scopus citations


This report was produced in response to a request by the Senate Committee on Appropriations that the National Advisory Mental Health Council prepare and submit a report on the cost of insurance coverage of medical treatment for severe mental illness commensurate with the coverage of other illnesses and an assessment of the efficacy of treatment of severe mental disorders. About 5 million Americans (2.8% of the adult population) experience severe mental disorders in a 1-year period. Treating these disorders now costs the nation an estimated $20 billion a year (with an additional $7 billion a year in nursing home costs). These costs represent 4% of total U.S. direct health care costs. When the social costs are also included, severe mental disorders exact an annual financial toll of $74 billion. This total accounts for the dollar costs of shortened lives and lost productivity, as well as the costs incurred in the criminal justice and social service systems. However, it cannot begin to account in human terms for the enormous emotional cost and pain borne by Americans with severe mental illness and by their families. Many myths and misunderstandings contribute to the stigmatization of persons with mental illness and to their often limited access to needed services. For example, millions of Americans and many policy makers are unaware that the efficacy of an extensive array of treatments for specific mental disorders has been systematically tested in controlled clinical trials; these studies demonstrate that mental disorders can now be diagnosed and treated as precisely and effectively as are other disorders in medicine. The existence of effective treatments is only relevant to those who can obtain them. Far too many Americans with severe mental illness and their families find that appropriate treatment is inaccessible because they lack any insurance coverage or the coverage they have for mental illness is inequitable and inadequate. For example, private health insurance coverage for mental disorders is often limited to 30-60 inpatient days per year, compared with 120 days or unlimited days for physical illnesses. Similarly, the Medicare program requires 50% copayment for outpatient care of mental disorders, compared with 20% copayment for other medical outpatient treatment. These inequities in both the public and private sectors can and should be overcome. Estimates based on studies of current coverage and utilization suggest that under health care reform, for an additional annual cost of $6.5 billion- representing approximately a 10% increase over current total direct costs of mental health care-the nation can provide coverage for adults and children with severe mental disorders commensurate with coverage for other disorders. Commensurate coverage for Americans experiencing severe mental illness will yield both human and economic benefits. Millions of Americans will be able to participate more productively at home, at work, and in the community. Substantial numbers will no longer need to impoverish themselves to obtain coverage under Medicaid. The enormous but often hidden costs of untreated or undertreated severe mental illness, which are now borne by the general health care system and society at large, can be appreciably reduced. In addition, commensurate coverage for severe mental disorders can be expected to produce a 10% decrease in the use and cost of medical services for individuals with these conditions. The annual saving in indirect costs and general medical services would amount to approximately $8.7 billion. This benefit would offset the cost of providing such coverage and would represent an estimated net economic benefit for the nation of $2.2 billion annually. In summary, a solid body of research evidence supports the provision of commensurate coverage for persons with severe mental disorders. Greater access to treatments of demonstrated effectiveness will help these individuals function more productively. As a result, they, their families, and the nation as a whole will benefit. That benefit can be realized in the context of the actions by the President and the Congress on health care reform.

Original languageEnglish (US)
Pages (from-to)1447-1465
Number of pages19
JournalAmerican Journal of Psychiatry
Issue number10
StatePublished - 1993
Externally publishedYes

ASJC Scopus subject areas

  • Psychiatry and Mental health


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