An important principle of public finance is that we should invest government funds in areas that promise the greatest return. This is a fancy way of saying that we should make sure that in spending money we are getting the biggest bang for our buck.

It is not enough for the affirmative to point to a need. They must explain why this need is more important than other needs. Or to return to the investment paradigm, they should show that meeting the need they point to will give us a bigger social payoff than all other uses of those same dollars.

• Is expansion of public sector mental health sources the best use of scarce federal dollars?

• Is it the best use of our health care dollars?

• Is it the best use of public health dollars?

Let's answer those questions in reverse order.

A.  Public Health Priorities

B.  Health Spending Priorities.

C.  Federal Budget Priorities.

Even if there is a valid need, the public health service is the wrong vehicle to meet that need for five reasons:

A.  It's wasteful.

Some of the government's most wasteful and inefficient agencies are in the public health service - the very institutions that the affirmative is trying to expand:

• The U.S. Public Health Service's Commissioned Corps - a 6,000-member force of doctors, nurses, dietitians and veterinarians - is supposed to be called upon in the event of emergencies. The General Accounting Office has found that the Corps, which has repeatedly refused to perform its official task, could easily be scrapped at a savings of $130 million a year to taxpayers (See The Public Health Service.)

• The National Institute of Mental Health, the federal agency charged with conducting research into mental illness, routinely wastes large amounts of money on studies that have nothing to do with mental illness. One recent NIMH project, for example, studied aggression in bluebirds. In 1997, only 36 percent of the agency's research money went to studies of mental illnesses, while at least 15 percent of its funds went to diseases that are the responsibilities of other federal agencies - including $60 million on AIDS (See Curious Agenda of Mental Health Agency.)

• The Centers for Disease Control and Prevention have wasted millions of dollars on research that was never conducted. In the worst case, the CDC accepted $22.7 million in Congressional funds to study chronic fatigue syndrome (CFS) - over half of which was either misspent on unrelated projects or entirely misplaced (See Funds Allocated To Study Non-Disease Disappear.)

B.  It has the wrong focus.

C.  It's political.

(coming soon!)

D.  It's dangerous.

E.  It's often wrong.

The affirmative approach is to expand mental health services in isolation of other health services. They would have patients go to a public entity for mental health needs and (presumably) to other places for other health needs - rather than getting all their health needs met by a single, integrated health plan. This approach would further fragment a system that is already too fragmented.

A.  Mental and physical illnesses are often connected. Numerous studies have demonstrated that people who experience physical illnesses are more likely to suffer from mental disorders, and vice versa. For example:

• According to the University of Maryland School of Medicine, more than half of all patients admitted to general hospitals with serious psychiatric illnesses have concurrent physical medical problems.

• Clinically significant depression affects 45% of heart attack victims, 15% of diabetics, half of all cancer victims, and 25% of those with chronic illness.

• The strongest predictors of general hospitalization and physician visits among patients with chronic medical illness are depression and psychological stress.

• Depression increases the likelihood of developing coronary heart disease and increases the likelihood that a heart attack will be fatal.

• About 30% of HIV-infected patients have depression, and there is strong evidence that depression hastens the transition from HIV to AIDS.

• A psychiatric condition is the first sign of sickness in 10% of HIV cases.

(For a list of studies on the connection between mental and physical disorders, see . Also, see Behavioral Health Is an Integral Part of Overall Health and Surgeon General's Report: Mind and Body Inseparable.

B.  Lack of integration in diagnosis and treatment leads to inferior care and more costly care. A very important Yale University study found that for one group of employees: (See p. 11, The Economic Costs Of Mental Illness and Benefits of Treatment.)

• When the employer raised deductibles and copayments and introduced managed care restrictions, there was a 38% drop in the costs of mental health care.

• However, this reduction was almost completely offset by a 37% increase in non-mental health care costs. (There was also a 22% increase in sick days by mental health users.)

• This implies that mental health and physical health services are a lot closer substitutes than most people realize.

• It also implies that it can be a big mistake to make decisions in one area of medicine while ignoring what's happen in the other area.

• Another study showed that 83 percent of people referred by clinics and social workers for psychiatric treatment had undiagnosed physical illnesses; 42 percent of those diagnosed with "psychoses" were later found to be suffering from a physical illness.

(Think of holding two health plans: Plan A in your right hand and Plan B in your left. You control A, but you don't control B, and you cannot observe what's happening there. Every time you do something to control costs by limiting access in A, you cause people to go get care in B. And every time you do something to improve access in A, you cause people to move from B to A. But since you can't see what's happening in B, you don't know what the overall effects of your actions are. Every time you think you are controlling costs because of something you do in A, the costs of both plans combined may actually be rising. And every time you think you are improving access because of something you are doing in A, you may actually be reducing access for both plans combined. This is a classic case of the right hand not knowing what the left hand is doing! The lesson: if you want an efficient health care system, the entity that controls access to one type of care must be the same entity that controls access to the other kind of care.)

The problem with our current, fragmented approach is that too many decisions are being in isolation of each other. The affirmative approach would make things worse.

C.  Lack of integration in delivery causes a waste of resources. Currently, mental health services are delivered through nine federal agencies and 577 different projects in all 50 states and the District of Columbia. These programs often overlap, duplicate efforts and waste resources.

A.  Substituting public for private provision.

Virtually every expansion of a government health insurance in recent years has come at the expense of private health insurance:

• In the 1990s, the expansion of Medicaid came largely at the expense of private health insurance, even as the number of people without health insurance continued to rise. (See Medicaid Eligibility Policy and the Crowding-Out Effect)

• The expansion of State Children's Health Insurance Programs (federally subsidized programs for children) followed the same pattern: more children in the public program came largely at the expense of fewer children with private insurance, even as the number of uninsured children continued to rise. (See Recent Trends in Children's Health Insurance)

• What's worse, the private insurance that was replaced tended to be family-friendly, with all members of the same family in the same health plan. By contrast, public programs can result in every member of a family in a different plan, e.g., a mother in Medicaid, a child in S-CHIP and a father in an employer plan.

• A number of scholars believe that the reason why private insurance placed caps on catastrophic coverage for mental health care was the existence of public health facilities that provided care for free. In other words, private coverage for mental health was small because public coverage was large. (See Surgeon General's Report, Ch. 6, Financing and Managing Mental Health Care.)

B.  Consequences of Public Expansion.

Throughout the developed world, wherever we look in health care, private provision tends to be more efficient and often of better quality than public provision. (See Twenty Myths About Single-Payer Health Insurance) This is also true within our own country. For example:

• The Department of Veterans Affairs is notoriously inefficient and wasteful, especially when it comes to spending. According to the General Accounting Office, the VA paid an estimated $9 billion for fraudulent death and disability claims in a single year (1998) - nearly 20 percent of its budget. (See GAO Report Censures Agencies For Waste.)

• One of the most wasteful government agencies is Medicare, which in 1997 alone squandered more than $20 billion in taxpayer dollars. (See U.S. Inspectors General, Government Agencies That Lost More Than $1 Billion.)

Medicaid is just as inefficient. A 1993 investigative report of the Illinois Medicaid system by the Chicago Tribune found:

• Four Medicaid patients who had more than 300 visits in one year - that's almost one doctor visit every day.

• In a single day, one patient saw five doctors, made seven visits to a pharmacy and had 22 prescriptions filled with 663 pills.

As noted above, many of the nation's public health agencies are also poorly managed and wasteful.

Given the track record so far, why would we want to further expand the public health care sector? Almost everywhere else, the collective judgment is that we need to take more advantage of the private sector, not less. For example:

• More than half the Medicaid patients in the country are now enrolled in private HMOs.

• In Medicare, more than 6 million seniors have joined private sector HMOs.

A.  An overriding characteristic of mental health care is that there are often no objective standards, either for diagnosis or for treatment. As a result, this is a field where it is often very difficult to verify what we are getting for the enormous amount of money we are spending. For example:

B.  One of the reasons why there is so much waste and abuse of the system is that in comparison to physical illness, both doctors and patients have far more discretion:

C.  The existence of so much discretion on both sides of the market gives rise to two kinds of abuse:

On the patient side of the market, the condition of having incentives to waste other people's money is called the problem of "moral hazard." It is a problem that is inherent in all third-party insurance - where individuals are able to draw resources from a common pool. For example, suppose a patient has a choice between two equally effective therapies. If someone else is paying the bill, the patient has no reason not to choose the more expensive option.

On the other side of the market, provider incentives to waste resources is called "rent seeking". Precisely because information is imperfect and monitoring is imperfect, providers find they can enhance their incomes by providing services that are of little or no value. A common observation in the mental health field is that the number of visits that it takes to "cure" a patient often miraculously equals the maximum number of visits allowed under the patient's insurance plan. Similarly, the number of days in a hospital or other institution needed to "cure" a patient often miraculously equals the maximum allowed by insurance. Providers tend to provide as long as insurance pays. But once the insurance stops paying, the services stop.

D.  To appreciate the outcome of these incentives, consider what a poor job the mental health system as a whole does in getting help to those who need it most:

• Only about one-fourth of people with a diagnosable mental health problem actually get treatment in any given year.

• Of that number, only 17 percent get some treatment in the health care sector itself, with the rest receiving treatment from a non-medical source.

• At the same time, 38 percent of all mental health patients, representing 28 percent of all treatment visits are by people who do not have a diagnosable mental disorder.

(See Mental Health Economics, p.10.)

The negative will propose a counter plan that will:

• Spend no more on health care than what we are now spending, but will reform the way those dollars are spent.

• Encourage patients to receive care in the context of integrated, comprehensive health care plans.

• Rely primarily on the efficiencies and entrepreneurial strengths of the private sector.

• Subject questionable therapies to monitoring by patients and their families and to the discipline of the competitive marketplace.

As a result of these reforms, virtually all patients, including the mentally ill, will have more health care and better health care at no additional expense.