Introduction to mental health economics

Abstract

Health Economics (HE) emerged in healthcare in the 1950s but was only applied in Mental Health mainly after the 1990s. One of the reasons for such a delay was the previous approach to psychiatric care based exclusively in hospitals. With the shift from a hospital to community care model, and with the availability of new, expensive treatments and a growing demand for treatment, HE became a powerful tool to guide mental health policies and to assess the costs and benefits of mental health interventions. HE has its origins on the principles of the welfare theory, which aims to maximize welfare (well-being and happiness) underpinned by a cost-benefit analysis. Because methodologies measure health in monetary units, the health sector adapted economic principles to an extra-welfarist approach through cost-effectiveness and cost-utility analyses in order to maximize health outcomes and guide public health resource allocation. In this chapter we present the main concepts of HE and how economic principles can be applied in mental health care. Economic evaluation is the most important method to verify benefits over costs, demonstrating which of several alternatives is the best value for the money. Regarding some peculiarities of mental health care, this chapter raises some challenging issues of applying HE methods and how the social and economic burden of mental disorders exert influence on the type of economic evaluation chosen.