Rules vs. Discretion: Treatment of Mental Illness in U.S. Adolescents

Many mental health disorders start in adolescence and appropriate initial treatment may improve trajectories. But what is appropriate treatment? We use a large national database of insurance claims to examine the impact of initial mental health treatment on the outcomes of adolescent children over the next two years, where treatment is either consistent with FDA guidelines, consistent with looser guidelines published by professional societies (“grey-area” prescribing), or inconsistent with any guidelines (“red-flag” prescribing). We find that red-flag prescribing increases self-harm, use of emergency rooms, and health care costs, suggesting that treatment guidelines effectively scale up good treatment in practice.