TY  - JOUR
AU  - Frank,Richard G.
AU  - McGuire,Thomas G.
TI  - Economics and Mental Health
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7052
PY  - 1999
Y2  - March 1999
UR  - http://www.nber.org/papers/w7052
L1  - http://www.nber.org/papers/w7052.pdf
N1  - Author contact info:
Richard Frank
Department of Health Care Policy
Harvard Medical School
180 Longwood Avenue
Boston, MA 02115
Tel: 617/432-0178
Fax: 617/432-1219
E-Mail: frank@hcp.med.harvard.edu

Thomas McGuire
Department of Health Care Policy
Harvard Medical School
180 Longwood Avenue
Boston, MA 02115
Tel: 617/432-3536
E-Mail: mcguire@hcp.med.harvard.edu
AB  - This paper is concerned with the economics of mental health.  We argue that mental health economics is like health economics only more so: uncertainty and variation in treatments are greater; the assumption of patient self-interested behavior is more dubious; response to financial incentives such as insurance is exacerbated; the social consequences and external costs of illness are formidable.  We elaborate on these statements and consider their implications throughout the chapter.   Special characteristics' of mental illness and persons with mental illness are identified and related to observations on institutions paying for and providing mental health services.  We show that adverse selection and moral hazard appear to hit mental health markets with special force.  We discuss the emergence of new institutions within managed care that address long-standing problems in the sector.  Finally, we trace the shifting role of government in this sector of the health economy.
ER  -