Rules vs. Discretion: Treatment of Mental Illness in U.S. Adolescents

Mental health disorders are a leading cause of disability worldwide. Many mental health disorders start in adolescence and appropriate treatment at the outset has the potential to improve trajectories. But what is appropriate treatment? We use a large national data base of insurance claims to examine the impact of initial mental health treatment on the outcomes of adolescent children over the next two years, where treatment can fall into three categories. First, treatment can be consistent with FDA guidelines. Second, treatment can be inconsistent with FDA guidelines, but consistent with looser guidelines published by professional societies such as the American Psychological Association (“grey-area” prescribing). Third, treatment can be inconsistent with guidelines (“red-flag” prescribing). Our results shed light on the question of whether guidelines from either the FDA or professional organizations are an effective way to scale up good treatment in practice. We find that red-flag prescribing increases self-harm, use of emergency rooms, and health care costs. FDA approved prescribing is associated with lower initial rates of self-harm, but with higher costs. Over a two-year time horizon, grey-area prescribing lowers costs and facility use and does not increase self-harm.