The Demand for Episodes of Mental Health Services

Using data from the RAND Health Insurance Experiment, this report examines expenditures for mental health services to see whether demand for mental health services is more responsive to varying cost sharing, than is the demand for medical services. Among their findings, the authors conclude that (1) the use of outpatient mental health care is responsive to cost sharing but not as responsive as most observational studies have indicated; (2) economic considerations seem to play a larger role in decisions to buy mental health care than to buy medical care; (3) coinsurance sharply reduces the number of episodes of treatment but has only a small effect on the duration and intensity of use within an episode; (4) outpatient treatment is very persistent; (5) those with multiple episodes of treatment in a year spend more on average than those with one; and (6) anxiety, depression, and emotional instability have separate effects on use, but levels of psychological well-being have little effect.