CLINICAL HANDBOOK OF SCHIZOPHRENIA

508 VII. POLICY, LEGAL, AND SOCIAL ISSUEScluding nontreatment expenditures and intangible costs associated with emotional andphysical burden. Direct treatment expenditures have been well documented and are ofparticular concern to public payers, such as the Medicaid program, states, and counties.Indirect costs have received much less attention but are equally important; they allow forcalculations of the full cost of schizophrenia, thus providing information about the truesocietal value of public health care programs targeting people with severe mental disorders.Direct CostsSpending for mental care treatment in the United States was more than $85 billion in2001, accounting for 6.2% of all health care spending. Outpatient care accounted for thelargest share of expenditures (52%), followed by inpatient (22%) and residential care(19%). About one-fourth of all expenditures were for services provided in hospitals, includingspecialty hospitals (11%), specialty units in general hospitals (7%), and innonspecialty care in general hospitals (9%). Treatment of schizophrenia alone accountedfor 2.5% of all health care spending and almost one-third of all mental health care spending,roughly approximating $34 billion (Mark, Coffey, Vandivort-Warren, Harwood, &King, 2005).Trends in SpendingSpending for mental health services in the last 15 years is characterized by the increasingshares of outpatient and general care and declining use of inpatient and specialty care. Between1991 and 2001 there was a 12% decrease in the relative share of expenditures forspecialty hospitals, no change for general hospitals, and a 6% decrease in the share fornursing homes and home health services. At the same time, there was a 4% increase inexpenditures for multiservice mental health organizations (e.g., community mental healthcenters and psychosocial treatment programs) and a 14% increase for retail drugs (Market al., 2005).Spending on DrugsThe rising expenditures for atypical antipsychotic drugs are particularly prominent. Mostnotably, between 1996 and 2001, an increase of 5.5 million people using atypicalantipsychotic drugs was paralleled by a 77% annual increase in prices, mostly attributableto introduction of new medications. These two trends have been the major factors inthe escalating costs of mental health care: As of 2004, drug expenditures accounted for$20 billion, or 21% of all mental health spending. During the same period, spending forolder antipsychotics remained almost unchanged.Geographic VariationMental health spending varies significantly by state. For example, the $16 billion distributedby the 50 State Mental Health Agencies in 1997 varied fivefold across states, from$23 to 112 per capita. New England, Mid-Atlantic, and Far West regions had the highestper capita expenditures, mostly driven by community-based programs, whereas theSoutheast and the South Central regions had the lowest per capita spending.