Money mismanaged in mental health system

ruth-williams-thumb Dr Ruth Williams

First published on The Punch on 5 November, 2010.

Andrew lived with mental illness and died in 2005. Andrew had schizophrenia, but he did not die from this – he was stabbed to death by his flatmate, who was subject to severe paranoid schizophrenia. A community worker had placed Andrew in this situation, despite the risks.

The Victorian coronial report found various processes had failed Andrew, putting his life in danger. In his June 2009 report, State coroner David Drake called for “sweeping changes” in community care of the mentally ill.

It’s one thing to throw money at a problem, but wouldn’t it be better to allocate that money somewhere where it would actually be effective? If there are to be community-based services for people with severe diagnoses, then therapies have to “work” and services well-connected.

Let’s assume that investing in this sector was effective: symptoms and disabilities were being alleviated and the rising death rate from mental illness could technically reduce. In this scenario, there always will be alternative ways to spend finite resources.

Money can be put to financing diagnosis, and attracting more psychiatrists or more allied services. Therapeutic research could be funded, or there could be more economic research for effective policy.

Every million dollars has several alternative uses. About 6,375 mental health plans written by GPs equal around 12,000 hours of private psychiatry services funded by Medicare; or partial funding for the construction of a dedicated facility; or 20 mental illness support groups funded at $50,000 each; and so on. Since funding is limited, what is the best use of every million dollars spent on this sector? 

If we’re genuine about good outcomes and value for money, then change must be focused on the end of the system where people are most severely ill. These are the people who need the most help, but instead change is occurring at the easier end. Australians “troubled by life” are currently streaming through the doors of GPs and psychologists. That’s understandable. Life is troublesome, but this doesn’t equal a mental illness. The numbers in this group are not trivial, about 590,000 people or 4.4 percent of Australia’s population.

As a result of the financing of ‘the Worried Well’, the needs of severely mental ill people are heavily under-resourced. “Unmet need” is a term for those with a person suffering from mental disorder who do not access services - currently about 11 per cent of Australia’s population fall into this category.

Australians love Medicare, and we have much to be thankful for in it. But Australians tend to believe that Medicare is achieving equity, access and well–allocated health resources - and it is, to a degree.

What needs to be determined is where Medicare fails, and to form policy to address those problems. Many economic incentives are strange. People without a mental disorder who are using mental health services are not a trivial number, about 590,000 people or 4.4 percent of Australia’s population. Apart from the ‘Worried Well’, there is also a very mentally-non-ill end of the market that Medicare is subsidising, with little in place to stop this. These are the people receiving services for mental non-illness, sport psychology, executive performance etc.  This money could be used for those in much greater need, like child and adolescent service delivery, or other areas that are in ‘great need’.

Let us insist on policy which ensures mental health diagnosis is accurate. Let us insist on financing innovations that work and are value for money. Also, there are known therapies and systems that are evidence-based but not being implemented - let’s not subsidise what has no effect.

If ‘sweeping changes’ are what we are calling for, we need a political agenda of change in community care that can work. We have to finance what works, strengthen the connections between services, and resources have to align with severity of the condition.


Ruth F.G. Williams is a Senior Lecturer in Economics in the Regional School of Business, Latrobe University, and Adjunct Senior Lecturer, Australian Institute of Suicide Research and Prevention, Griffith University.