The Cost of Mental Health Conditions

According to a recent Health Affairs study,1 in 2013, the United States spent $201 billion on mental health care services – more than it did on other types of medical care and surpassing spending on heart conditions, which was the costliest category 20 years ago.2

In a separate report from 2014, CMS said the cost of a person with mental health conditions and chronic conditions can be at least double and perhaps up to four times as much as the cost of an individual without physical or mental health conditions.3
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Jeffrey Brenner, executive director of the Camden Coalition, recently presented comprehensive findings from his study in New Jersey which explored the reasons behind the fragmented and costly behavioral health system.

The study’s findings:4

  • Nearly 15% of adults in NJ have been diagnosed with a mental illness;
  • About 260,000 adults live with a severe mental illness;
  • 30% of all ER visits are mental health or addiction;
  • In New Jersey, 800 mentally ill patients had a cumulative total of 31,000 visits in a five-year span, resulting in more than $260 million in behavioral health billing  and medical billing charges to hospitals;
  • Hospitals statewide now see more than 500,000 patients in their EDs and over 300,000 in their inpatient settings in need of some form of behavioral health service.

Competitors as Allies and Advocates for Better Care

For the study, five health systems joined together to form the Camden Coalition. Participants include Cooper University Health Care, Inspira Health Network, Kennedy Health, Lourdes Health System, Virtua Health and the New Jersey Hospital Association. Their purpose is to collaborate and identify the problems in behavioral health delivery.

The study focuses on the connections between housing security, police interactions, chronic conditions and emergency room visits for mentally ill patients. Data was used from the five partner health systems and analyzed against Camden police records and the housing status of the individuals.

The report concludes that mental health patients are expensive for hospitals, and having a roof over their heads helps reduce their likelihood of interacting with law enforcement or the emergency room.

For example: incurred charges cost the hospital: $379,000 to $4.4 million, compared with the hospitals’ payments of $46,000 to $642,000.

According to Brenner, patients can range in age from 2 to 94 years, and visit the hospital as many as 400 times in a year. More chronic conditions and more moving (i.e. the number of municipalities lived in) increases the likelihood of readmission after treatment at a hospital.

In 2013, 39% of inpatient admissions from the five hospitals received a primary or secondary diagnosis of behavioral health, a 20% increase from 2009.

There are still a number of factors that must be studied, Brenner suggests, such as how current addiction treatment often entails addictive substances.

“We all knew, not by looking at the data … but we know in our gut that we were seeing the same patients over and over again,” said Kennedy Health CEO and President Joseph Devine. “And patients were bottle-necking our hospitals — it wasn’t their fault — but it was our inability to work with the process and make it work better. So our objective, of course, was to manage the gaps.”

“Any given day, more than 100 people come to our emergency rooms, on average, with a mental health or substance abuse issue, and it continues to increase,” Devine said.

Virtua Health CEO Richard Miller said the results of year one of the study are just the tip of the iceberg. “We are in the stone age,” Miller said, adding there are many other layers to consider, including regulatory, legal issues and payers — all contributing to the problem.

[1] Ellis Nutt, Amy, “The U.S. Spends More Money on This Medical Condition than Any Other,” To Your Health-Washington Post, May 19, 2016
[2] Shinkman, Ron, “Mental Health Services Lead U.S. Spending Outlays,” FierceHealthFinance, May 19, 2016
[3] Khemlani, Anjalee, “A Closer Look at the High Costs of Mental Health Conditions,” NJBiz, April 22, 2016
[4] 2014 Year-End Report, South Jersey Behavioral Health Innovation Collaborative