Mental health policy and practice across Europe: an overview

Financing and funding 79
for different purposes. However, this does not entirely solve the problem as
mental health services delivered at the municipality level are integrated
with other services, making it difficult in practice to ensure that earmarked
grants are, in fact, spent on specified mental health plans.
A second challenge in Norway concerns the way in which general hospitals
run by RHAs are financed. These are partly financed through a
cost-per-case reimbursement basis from central government for somatic
health conditions using a system of DRGs. These conditions accounted for
60 per cent of average costs in 2003. A block grant is used to fund other
specialist services including mental health. The per case reimbursement
system, however, provides strong incentives to increase activity (which
has been a major objective so as to reduce waiting lists). The fear among
mental health service professionals (and central government staff) is that
these incentives have led to a reallocation of budgets and resources away
from mental health services to somatic care. The impact of the DRG system
has not been empirically documented (Halsteinli et al. 2001) but despite
the existence a national plan calling for a major increase in the level
of resources for mental health services, the annual growth rate has been
higher for somatic care since the late 1990s (Bjoerngaard 2002).
Again, as a second-best solution RHAs also receive earmarked grants
to increase both the level and quality of mental health services. Unlike
the situation in the municipalities, central government has less of a problem
in controlling the use of these earmarked grants as they have for
specialized, and to a large extent, separate services. Major changes to the
way RHAs fund services have been discussed at the national level. One
suggestion has been to use the same funding mechanism for both somatic
and psychiatric care (Ministry of Health 2003). This would initiate a process
that will make activity-based reimbursement of psychiatric services
possible in future.
The dominance of institutions
The large, now generally maligned, psychiatric asylums have dominated the
European landscape for many decades, both literally and metaphorically. They
have certainly dominated mental health finances. Consequently, a major budgetary
challenge in many countries has been how to fund the move away from
continued heavy reliance on institutional care, whether in psychiatric hospitals
or indeed in the very institutional forms of social care found in some parts of
central and eastern Europe. It is still the case in some countries today that the
lion’s share of expenditure on mental health is taken up by institutional care:
for instance, around 70 per cent of the mental health budget in Lithuania is
used to maintain social care homes and psychiatric inpatient facilities
(Bankauskaite and Middtun 2005).
Unfortunately, many countries in central and eastern Europe still link funding