Economic Perspectives on the Organization and Governance of Mental Health Care

  • Sherry A. Glied
  • Richard G. Frank


This chapter examines the allocation of responsibilities for meeting the needs of people experiencing a mental disorder. These responsibilities have shifted among the private and public sectors; federal, state, and local governments; and between the mainstream of health policy and specialized policymaking. In general, the organization of the system that treats and addresses the needs of people with mental illnesses is far more complex, and involves more actors, than the comparable organization of the systems that address the problems of people with other types of health conditions, but over time, the systems have become more similar. This evolution reflects both changes in treatment practices and changes in societal attitudes and programs.


  1. 1.
    Barnett, J. C., & Vornovitsky, M. S. (2016). Health insurance coverage in the United States: 2015. Washington, DC: US Government Printing Office.Google Scholar
  2. 2.
    Mark, T. L., Yee, T., Levit, K. R., Camacho-Cook, J., Cutler, E., & Carroll, C. D. (2016). Insurance financing increased for mental health conditions but not for substance use disorders, 1986–2014. Health Affairs, 35(6), 958–965.CrossRefGoogle Scholar
  3. 3.
    Beronio, K., Glied, S., & Frank, R. (2014). How the Affordable Care Act and Mental Health Parity and addiction equity act greatly expand coverage of behavioral health care. The Journal of Behavioral Health Services & Research, 41(4), 410–428.CrossRefGoogle Scholar
  4. 4.
    Glied, S., & Frank, R. G. (2016). Economics and the transformation of the mental health system. Journal Health Politics Policy and Law, 41(4), 541–558. Scholar
  5. 5.
    Frank, R. G., & Glied, S. (2006). Better but not well: Mental health policy in the United States since 1950. Baltimore, MD: Johns Hopkins University Press.Google Scholar
  6. 6.
    U.S. Department of Health and Human Services National Institute of Mental Health. (2015). Any mental illness (AMI) among U.S. adults. Retrieved from
  7. 7.
    Hedden, S. L. (2015). Behavioral health trends in the United States: Results from the 2014 National Survey on drug use and health. Washington, DC: U.S. Department of Health and Human Services publication: No. SMA 15-4927.Google Scholar
  8. 8.
    Kessler, R. C., Amminger, G. P., Aguilar-Gaxiola, S., Alonso, J., Lee, S., & Ustun, T. B. (2007). Age of onset of mental disorders: A review of recent literature. Current Opinion in Psychiatry, 20(4), 359–364. Scholar
  9. 9.
    James, D. J., & Glaze, L. E. (2006). Mental health problems of prison and jail inmates. Washington, DC: U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Statistics Special Report, NCJ213600.Google Scholar
  10. 10.
    Umberson, D., & Montez, J. K. (2010). Social relationships and health: A flashpoint for health policy. Journal of Health and Social Behavior, 51(Suppl.), S54–S66.
  11. 11.
    Organisation for Economic Co-operation and Development. (2012). Sick on the job? Myths and realities about mental health and work. Paris, FR: OECD Publishing.Google Scholar
  12. 12.
    De Girolamo, G., Dagani, J., Purcell, R., & Cocchi, A. (2012). Age of onset of mental disorders and use of mental health services: Needs, opportunities and obstacles. Epidemiology and Psychiatric Sciences, 21(1), 47–57.CrossRefGoogle Scholar
  13. 13.
    Frank, R. G., & McGuire, T. G. (2000). Economics and mental health. In J. C. Anthony & P. N. Joseph (Eds.), Handbook of health economics (Vol. 1, Part B, pp. 893–954). New York, NY: Elsevier.Google Scholar
  14. 14.
    Rishel, C. W. (2012). Pathways to prevention for children of depressed mothers: A review of the literature and recommendations for practice. Depression Research and Treatment, 313689. Scholar
  15. 15.
    U.S. Census Bureau, Current Population Reports, P60-263. Income and poverty in the United States: 2017. U.S. Government Printing Office, Washington, DC, 2018.Google Scholar
  16. 16.
    Arrow, K. J., & Debreu, G. (1954). Existence of an equilibrium for a competitive economy. Econometrica, 22(3), 265–290.CrossRefGoogle Scholar
  17. 17.
    Hayek, F. A. (1945). The use of knowledge in society. The American Economic Review, 35(4), 519–530.Google Scholar
  18. 18.
    Bator, F. M. (1958). The anatomy of market failure. Quarterly Journal of Economics, 72(3), 351–379.CrossRefGoogle Scholar
  19. 19.
    Akerlof, G. A. (1970). The market for ‘lemons’: Quality uncertainty and the market mechanism. Quarterly Journal of Economics, 84(3), 488–500.CrossRefGoogle Scholar
  20. 20.
    Rothschild, M., & Stiglitz, J. (1976). Equilibrium in competitive insurance markets: An essay on the economics of imperfect information. Quarterly Journal of Economics, 90(4), 629–649.CrossRefGoogle Scholar
  21. 21.
    Stigler, G. J. (1971). The theory of economic regulation. Bell Journal of Economics, 2(1), 3–21.CrossRefGoogle Scholar
  22. 22.
    Olson, M. (2009). The logic of collective action: Public goods and the theory of groups, second printing. Cambridge, MA: Harvard University Press.Google Scholar
  23. 23.
    Ricardo, D. (1951). The works and correspondence of David Ricardo. Vol. 1 Principles of political economy and taxation [1817] (P. Sraffa, Ed.). Indianapolis, IN: Liberty Fund, 2005.Google Scholar
  24. 24.
    Rubinow, I. M. (1913). Subsidized unemployment insurance. Journal of Political Economy, 21(5), 412–431.CrossRefGoogle Scholar
  25. 25.
    Pauly, M. V. (1968). The economics of moral hazard: Comment. The American Economic Review, 58(3), 531–537.Google Scholar
  26. 26.
    Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(5), 416–424.CrossRefGoogle Scholar
  27. 27.
    Inman, R. P., & Rubinfeld, D. L. (1997). Rethinking federalism. Journal of Economic Perspectives, 11(4), 43–64.CrossRefGoogle Scholar
  28. 28.
    Oates, W. (1972). Fiscal federalism. New York: Harcourt, Brace, Jovanovich.Google Scholar
  29. 29.
    Glied, S. A., & Altman, S. H. (2017). Beyond antitrust: Health care and health insurance market trends and the future of competition. Health Affairs, 36(9), 1572–1577.CrossRefGoogle Scholar
  30. 30.
    Rom, M. C., Peterson, P. E., & Scheve, K. F., Jr., (1998). Interstate competition and welfare policy. Publius: The Journal of Federalism, 28(3), 17–37.Google Scholar
  31. 31.
    Brown, L. D., & Sparer, M. S. (2003). Poor program’s progress: The unanticipated politics of Medicaid policy. Health Affairs, 22(1), 31–44.CrossRefGoogle Scholar
  32. 32.
    Grob, G. N. (2014). From asylum to community: Mental health policy in modern America. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
  33. 33.
    Frank, R. G., & McGuire, T. G. (1990). Mandating employer coverage of mental health care. Health Affairs, 9(1), 31–42.CrossRefGoogle Scholar
  34. 34.
    Frank, R. G., Koyanagi, C. & McGuire, T. G. (1997). The politics and economics of mental health ‘parity’ laws. Health Affairs, 16(4), 108–119. Google Scholar
  35. 35.
    Frank, R. G., & Garfield, R. L. (2007). Managed behavioral health care carve-outs: Past performance and future prospects. Annual Review of Public Health, 28, 303–320.CrossRefGoogle Scholar
  36. 36.
    Grob, G. N. (1994). The mad among us: A history of the care of America’s mentally ill. New York: Free Press.Google Scholar
  37. 37.
    Glied, S. A., & Miller, E. A. (2015). Economics and health reform: Academic research and public policy. Medical Care Research and Review, 72(4), 379–394.CrossRefGoogle Scholar
  38. 38.
    Frank, R. G., Goldman, H. H., & Hogan, M. (2003). Medicaid and mental health: Be careful what you ask for. Health Affairs, 22(1), 101–113.CrossRefGoogle Scholar
  39. 39.
    McDonough, J. E., Rosman, B., Butt, M., Tucker, L., & Howe, L. K. (2008). Massachusetts health reform implementation: Major progress and future challenges. Health Affairs, 27(4), w285–w297.CrossRefGoogle Scholar
  40. 40.
    Sommers, B. D., Maylone, B., Blendon, R. J., Orav, E. J., & Epstein, A. M. (2017). Three-year impacts of the Affordable Care Act: Improved medical care and health among low-income adults. Health Affairs, 36(6), 1119–1128.CrossRefGoogle Scholar
  41. 41.
    Kozloff, N., & Sommers, B. D. (2017). Insurance coverage and health outcomes in young adults with mental illness following the Affordable Care Act Dependent Coverage Expansion. The Journal of Clinical Psychiatry, 78(7), e821–e827.CrossRefGoogle Scholar
  42. 42.
    Substance Abuse and Mental Health Services Administration (SAMHSA), U.S.D.O.H. (2016). Behavioral health trends in the United States: Results from the 2014 national survey on drug use and health (pp. 15–4927). Washington, DC: HHS Publication No. SMA.Google Scholar
  43. 43.
    Feldman, S. (Ed.). (2003). Managed behavioral health services: Perspectives and practice. Springfield, IL: Charles C. Thomas Publisher.Google Scholar
  44. 44.
    Bradley-Engen, M. S., Cuddeback, G., Gayman, M., Morrissey, J. P., & Mancuso, D. (2010). Trends in state prison admission of offenders with serious mental illness. Psychiatric Services, 61(12), 1263–1265.CrossRefGoogle Scholar
  45. 45.
    Steadman, H. J., McCarty, D. W., & Morrissey, J. P. (1989). The mentally ill in jail: Planning for essential services. New York: Guilford Press.Google Scholar
  46. 46.
    Deane, M. W., Steadman, H. J., Borum, P., Veysey, B., & Morrissey, J. P. (1999). Emerging partnerships between mental health and law enforcement. Psychiatric Services, 50(1), 99–101.CrossRefGoogle Scholar
  47. 47.
    Prins, S. J. (2014). Prevalence of mental illnesses in US state prisons: A systematic review. Psychiatric Services, 65(7), 862–872.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2020

Authors and Affiliations

  • Sherry A. Glied
    • 1
  • Richard G. Frank
    • 2
  1. 1.Robert F. Wagner Graduate School of Public ServiceNew York UniversityNew YorkUSA
  2. 2.Department of Health Care PolicyHarvard Medical SchoolBostonUSA

Personalised recommendations