Evaluating mental health care: the role of economics

In this paper there is an attempt to demonstrate the relevance of economics to the provision of mental health care and to describe how one technique in the economist’s toolkit should be applied in this field if the objective of policy is to use society’s scarce resources efficiently. The relevance of economics to the provision of mental health care derives from the fact that resources available to provide this service are inevitably limited. Choices must be made between competing uses of these resources. Every decision on what mental health is to be provided for whom and where, involves the sacrifice of benefits from discarded options. Making the best use of the available resources requires comparing the costs and benefits of alternatives. At present this is seldom done when decisions on the provision of mental health care are taken. Economic appraisal is a technique for collecting information on the costs and benefits of competing uses of resources. A description of the principles of economic appraisal, as applied to mental health care, is provided and the complexities of measuring the costs and outcomes of alternative care packages are explored. The reluctance of policy makers to use these techniques leads to treatment choices being made on the basis of guesses and rhetoric rather than scientific knowledge. Most aspects of care of the mentally ill, both in institutions and the community, have yet to be evaluated: it cannot be demonstrated that existing or proposed policies are efficient. Such behaviour wastes society’s scarce resources and does not enhance the welfare of patients.