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Economics and mental health

In: Handbook of Health Economics

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Author Info
Frank, Richard G.
McGuire, Thomas G.
Abstract

This paper is concerned with the economics of mental health. We argue that mental health economics is like health economics only more so: uncertainty and variation in treatments are greater; the assumption of patient self-interested behavior is more dubious; response to financial incentives such as insurance is exacerbated; the social consequences and external costs of illness are more formidable. We elaborate on these statements and consider their implications throughout the chapter. "Special characteristics" of mental illness and persons with mental illness are identified and related to observations on institutions paying for and providing mental health services. We show that adverse selection and moral hazard appear to hit mental health markets with special force. We discuss the emergence of new institutions within managed care that address longstanding problems in the sector. Finally, we trace the shifting role of government in this sector of the health economy.

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This chapter was published in: A. J. Culyer & J. P. Newhouse (ed.) Handbook of Health Economics, , chapter 16, pages 893-954, 2000.

This item is provided by Elsevier in its series Handbook of Health Economics with number 1-16.

Handle: RePEc:eee:heachp:1-16

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Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description

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Related research
This chapter was published in the following book, which is listed on IDEAS:
A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1, September. [Downloadable!] (restricted)
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I1 - Health, Education, and Welfare - - Health

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