The Economics of the Treatment of Schizophrenia

Prior to the 1980s, economists paid scant attention to schizophrenia, or indeed to mental health in general (1). Early work in the field included efforts to consider the impact of organization and financing on system efficiency and to address the supply of personnel in caring for persons with mental illness. For example, McGuire (2) reviewed the market for psychotherapy and the insurability of mental health care, and Frank (3) examined the supply of psychiatrists. Researchers at RAND analyzed the impact of cost-sharing on demand for mental health care (4). The use of diagnosisrelated groupings to pay for care under prospective payment was considered by Taube and his colleagues (5). Dickey and Goldman (6) reviewed the impact of various funding mechanisms in public mental health. During the 1990s, work on insurance, regulation, and the organization of mental health services continued. Studies of insurance mandates for mental health care, such as Frank and colleagues’ (7) simulation of mandates and related costs, provided valuable information to state legislators considering such laws. Observers of systems change considered major reorganizational efforts, such as those implemented through the Robert Wood Johnson Program on Chronic Mental Illness (8) and other types of organizational reforms (9–12). The 1990s also brought analysis of the increasing implementation of managed care with behavioral health carve-outs (13). These examples of the contributions of mental health