Recovery From Schizophrenia: Psychiatry And Political Economy

TREATMENT 261Though these results are for people receiving US disability pensions, they mayhave broader applicability. Raising the earnings disregard in other nationaldisability pension systems could lead more people with serious mental illness towork, improve the course of their illness and reduce treatment costs.WAGE SUBSIDIESWe could also consider providing a wage subsidy to the most seriously disabledmentally ill people and raise earned income above the minimum wage (currently$5.15 an hour in the US). How could it be funded? Under one approach,government pension regulations could be waived to allow payments to bediverted into wage subsidies. Employers would be reimbursed the differencebetween the worker’s rate of production and pay. The US Department of Laborhas already established a time-study process that can be used to measure thisdifference. 51Under some circumstances, it could be feasible to divert funding currently usedfor treatment services into wage subsidies. In the US, where much ofgovernment-funded psychiatric treatment is being converted to a capitated ormanaged-care funding mechanism, it might be reasonable to use treatment fundsfor wage subsidies. Under capitated funding, the treatment agency gets to keep anysavings resulting from program innovations that reduce costs. For example, areduction in hospital costs can be directed to community treatment. If increasedemployment could be shown to improve stability of illness and to reducetreatment costs, then an agency with capitated funding could choose to provide awage subsidy for its most disabled patients.Can treatment costs be reduced by employing patients? Psychiatric treatmentcosts were more than twice as high for the unemployed patients in the studyconducted in Boulder by Paul Polak and the author 52 than for the part-timeemployed. This could be explained in a number of ways, one being that workingpatients do better because they are employed and need less treatment. Whateverthe explanation, it is clear that the cost of outpatient treatment of the unemployedpatient is so high in Boulder (around $2,500 a month) that the expense ofproviding a half-time wage supplement for these clients could be met by a mereten per cent reduction in treatment costs. Such a reduction seems possible, purelybecause the newly employed client would be at work half the week and lessavailable for treatment. For example, several studies have shown that the timespent in day treatment programs decreases substantially for patients who transfer toa supported employment program 53 or to other programs with a vocationalcomponent. 54 Being in a productive role, moreover, could enhance self-esteemand reduce alienation sufficiently that the course of the patient’s illness wouldimprove.As noted above, another study conducted in Boulder by the author and hiscolleagues demonstrated that treatment costs declined progressively over twoyears in a group of patients who were enrolled as members of a rehabilitation-