A new high-tech mental health startup called Mindstrong discovered an important lesson in economics. That lesson was that Americans value mental health services until they must pay for them. Writing in Stat News, psychiatrist Roy Perlis had this to say:
If I could do some motivational interviewing with leaders in the federal government and across the health care ecosystem, I might ask why, when they are finally willing to talk about mental health, do their behaviors suggest that they don’t care as much about it as they say they do?
Mindstrong provides app-based mental health services. Artificial intelligence and data were supposed to facilitate low-cost, high-quality care, but it’s not necessarily as easy as it sounds.
To begin with, people have relied for too long on magical thinking about the role of technology in mental health. Apps, artificial intelligence, chatbots, and telehealth should absolutely help provide better, more efficient health care, even in psychiatry.
So, what caused Mindstrong to begin winding down operations and laying off 130 employees? For that matter, why did its blue-chip investors pull the plug after investing $160 million dollars?
The talk may be about technology because we don’t want to talk about a less comfortable topic: money.
An underappreciated consequence of the focus on profit in the health care industry, even by health systems that are supposed to be nonprofit, is continued underinvestment in mental health services. No one questions the need for these services, but when they lose money on every patient they simply cannot make it up in volume.
Dr. Perlis, a professor of psychiatry, explained a concept that is well known to economists. He had this to say in Stat News:
Psychiatrists and other mental health clinicians often use an approach called motivational interviewing to encourage people to change their behaviors. As part of this technique, we highlight the difference between what individuals say they want and what their behaviors reflect about their priorities. By making this gap clear, we try to help people align their goals with their behaviors.
The above paragraph (and several before it) touch on something that is taught in economics. What people say they want and what they actually want are not always the same. For instance, people may know junk food is bad for them and they may say they don’t eat that much of it. Analyzing their grocery and restaurant receipts may tell a different story.
Going back to the example of Mindstrong, Americans may have a need for mental health counseling, but their revealed preference is that they prefer other goods ahead of mental health services. Although desirable, mental health care runs up against a budget constraint before Americans have satisfied all their other preferences of daily living.
When advocates for health care want mandated funding for a specific condition they often claim it’s money saving, therefore health plans should be forced to spend more on the service. Here is what Dr. Perlis had to say.
The irony is that the cost-effectiveness of treating mental health issues is unequivocal: treating anxiety and depression lowers the cost of just about every chronic illness imaginable. But for payers, who shrewdly calculate that those savings may accrue over years, the game is to avoid paying right now and ideally to get someone else to pay down the road.
There are laws at both the federal and state level that require health plans to pay for mental health care. These are called mental health parity laws. Although funded by insurance plans, mental health care isn’t funded as generously as, say, orthopedic surgery. Whereas patients can ask their doctors for Zoloft or Prozac, it is more difficult to access talk therapy or inpatient care. The problem is mental health is not like physical health. This was written by John Goodman more than 20 years ago.
Advocates of mental health parity assume that all health care should be paid for in the same way.
All such proposals are based on a false assumption. Different types of illnesses require different payment structures in order to achieve better health outcomes for lower costs.
Five key differences between a typical episode of mental illness and a typical episode of physical illness have implications for paying for care.
Subjectivity. In contrast to the direct observation employed in other branches of medicine, providers in the mental health field must rely largely on the patient’s subjective experience of the illness. Patient reports are not always reliable.
No Objective Standards. Partly because the medical community has not studied mental illnesses as intensely as physical illnesses, few objective standards exist – for either diagnosis or treatment.
Doctor Discretion. The providers of mental health care services exercise considerable discretion in prescribing drugs and administering other treatments, and their choices vary considerably.
Patient Discretion. Patients have a wide choice of providers: physicians, psychiatrists, psychologists, social workers, family therapists and counselors, to name a few. Greater patient discretion in mental health is also reflected in the fact that the demand for mental health services is four times more sensitive to changes in price than the demand for general health care.
Patient Cooperation. Patient behavior does not have much impact on the setting and mending of a broken leg. But in the case of diabetes and many other chronic conditions, patient cooperation (e.g., taking the proper drugs, maintaining the proper diets) is essential. The same is true for mental illness. For example, substance abuse patients have to continue to say “no” to the substance they were abusing. For other problems, patients have to take prescription drugs, make appointments with therapists and avoid destructive behaviors. Patient cooperation is also needed in diagnosing the illness in the first place and in monitoring patient progress.
Just as apps can teach you to speak Spanish, teach you math and even help you learn to fly an airplane, I believe mental health apps will be an import advancement in mental health therapy. One thing they lack is an actual human empathizing with the patient. For some people that may be entirely what they need. However, therapy works best on motivated patients who are willing to purchase the app and pay as they go. Too many so-called market disruptors in health care are premised on getting someone else to pay for care besides the patient.