National Spending on Mental Health and Substance Abuse Treatment by Age of Clients, 1997

Age is one of the most revealing lenses through which one can examine spending on mental health and substance abuse (MH/SA) treatment. There are several reasons why. The epidemiology of MH disorders and SA is strongly related to age and presents distinct challenges for treatment of various age groups. Furthermore, public policy on health financing is often linked to the age of the beneficiaries. For example, the elderly and young (along with the severely disabled) have been the primary recipients of public financing of health services: about 90% of Medicare population is age 65 and older, and over 50% of the Medicaid population is younger than 18 years.

This study is one of the first to analyze the age distribution of national spending on MH/SA services and is the first to look at the full age spectrum of MH/SA clients. The study builds on the comprehensive MH/SA spending estimates developed under Substance Abuse Mental Health Services Administration (SAMHSA) Spending Estimates Project, which calculated spending on MH treatment at $73.4 billion and on SA treatment at $11.9 billion for 1997.11 That study found that between 1987 and 1997, MH/SA spending had increased 3.7% annually, versus 5% for all personal health care and public health spending.* MH spending grew slightly faster, at 4%, compared to 3.4% for SA spending. Public payers reimbursed a disproportionate share of MH/SA treatment costs compared to costs for treatment of other health problems; 9.9% of public payer health spending was for MH/SA, compared to 6% of private spending. Only one other published study was found that examined MH/SA expenditures by age. Ringel and Sturm2 estimated treatment expenditures for children aged 1–17 for the year 1998. They used many of the same data sources used in the SAMHSA Spending Estimates Project, as well as additional survey data. Use of the Medical Expenditure Panel Survey (MEPS), which was not available when the SAMHSA estimates were developed, allowed them to allocate spending not only by age and type of service but also by type of payer. They put total MH/SA spending for children aged 1–17 at $11.68 billion in 1998. Adolescents (aged 12–17) accounted for 60% of the total and had the highest expenditures per child, children aged 6–11 accounted for 34% of the total, while children aged 1–5 accounted for 6% of the total. They also learned that in 1998, private insurance covered the largest proportion of spending on these youth (46%), while Medicaid (at 24%) and State and local payers (at 21%) covered comparably sized shares of expenditures for children 0–17 years of age.

Full report (PDF): National Spending on Mental Health and Substance Abuse Treatment by Age of Clients, 1997.pdf (209.89 kb)