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Mental Health Medications (Psychotropics) Today

New Medicines for Mental Health Help Avert a Spending Crisis

January 14, 2004

Advances in the treatment of depression and other mental illnesses over the last decade offer a dramatic illustration of how the discovery and use of new medicines improved patient care and helped contain treatment costs.

In the 1980s, the rising cost of mental health care was a growing concern for insurers and employers. Media reports highlighted this concern, stating that rapid increases in spending on mental health were expected to continue, threatening to put increased pressure on employer health costs and insurance premiums[i][ii].

However, a recent study published in Health Affairs finds that in the 1990s, as newer, better medicines were introduced for depression, schizophrenia and other disorders, this threat did not materialize. In fact, the study found that, as a percentage of total private insurance spending, mental health/substance abuse expenditures fell from 7.2 percent in 1992 to 5.1 percent in 1999[iii].



The study notes that “new medications such as selective serotonin reuptake inhibitors (SSRIs) and atypical antipsychotic medication have reduced the side effects associated with psychotropic treatment of depression and schizophrenia, allowing for improved compliance and perhaps a reduced need for inpatient care.” 

"The cost of treating a depressed person fell throughout the 1990's largely because of a switch from hospitalization to medications"

The study went on to say that while spending on pharmaceuticals for mental health and substance abuse disorders rose by 8.9 percent between 1992 and 1999, overall treatment costs for those disorders fell from $115 to $95 per member per year. The increase in spending on medicines was outweighed by a 15.6 percent decrease in hospital inpatient spending for mental health and substance abuse treatment. 

"The cost of treating a depressed person fell throughout the 1990's largely because of a switch from hospitalization to medications"

Results of a second study on the costs of treating depression echo the findings of the Health Affairs research. “The cost of treating a depressed person fell throughout the 1990s, largely because of a switch from hospitalization to medication,” the Wall Street Journal said in a December 31, 2003, story on the study. The study, published in the Journal of Clinical Psychiatry in December 2003, found that per-patient spending on depression fell by 19% over the course of the decade[iv]. As a result, while 56% more people with depression receive treatment in the 1990s, the total national costs for treatment rose only seven percent.

"It is estimated that with proper care of every American sufferning from depression, employers would regain 8.8 million work days now lost to depression"

"It is estimated that with proper care of every American suffering from depression, employers would regain 8.8 million work days now lost to depression"

Depression is the most common mental illness, affecting 18.8 million Americans (9.5% of the population) every year[v]. A huge clinical and economic impact results from this disorder. Depression severely affects a person’s ability to work productively and is the leading cause of disability in the U.S[vi]. Recent estimates of the cost to the U.S. economy of lost productivity and absenteeism due to depression put the figure at $52 billion[vii]. 

Despite the recognized benefits of adequate treatment for mental health disorders, many patients – including those with insurance – still do not receive it. For example, in 2002 data reported by private health plans to the National Committee for Quality Assurance (NCQA), only 40.1% of insured patients (in plans reporting to NCQA) with depression “received effective continuation phase treatment,” which includes six months of therapy with antidepressant medicines. It is estimated that with proper care of every American suffering from depression, employers would regain 8.8 million work days now lost to depression[viii]. This gap between recognized standards of care and the care patients obtain highlights the opportunity to improve patients’ lives and health care affordability with appropriate use of medicines.

Introduction of innovative pharmaceuticals to treat depression, schizophrenia, and bipolar disorder illustrates the potential of new medicines to improve patient care and curb overall health care costs. As new pharmaceuticals become available it will be possible to achieve better clinical outcomes, fewer side effects, greater compliance, and lower costs.

--------------------------------------------------------------------------------

[i] LD Williams, “Getting Therapy for the High Cost of Mental Health Benefits: To Cope with Soaring Costs, More Companies Turn to Contractors who Provide Thrifty Mental Health Services,” Los Angeles Times, 5 August 1990, Business, part D, p. 1.

[ii]S Nohlgren, “Insurance Cost Crisis Expanding,” Saint Petersburg Times, 30 April 1989, p. 1B.

[iii] TL Mark and RM Coffey, “What Drove Private Health Insurance Spending on Mental Health and Substance Abuse Care, 1992-1999?,” Health Affairs, 22 (2003): 1, 165-172.

[iv] PE Greenberg, et al., “The Economic Burden of Depression in the United States: How Did It Change Between 1990 and 2000?” Journal of Clinical Psychiatry, 64 (2003): 1465-1475.

[v] National Institute of Mental Health Website, September 2002, http://www.nimh.nih.gov/publicat/depression.cfm (7 January 2004). 

[vi] Pharmaceutical Research and Manufacturers of America, “”How Much Do Managed Care Companies Spend on Prescription Medicines?” (Washington, DC; PhRMA 2003). 

[vii] PE Greenberg, et al., “The Economic Burden of Depression in the United States: How Did It Change Between 1990 and 2000?” Journal of Clinical Psychiatry, 64 (2003): 1465-1475.

[viii] Pharmaceutical Research and Manufacturers of America, “”How Much Do Managed Care Companies Spend on Prescription Medicines?” (Washington, DC; PhRMA 2003).

This material is for educational purposes only.
http://www.phrma.org


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