Policy Diagnosis: Free-Market Principles Benefit Mental Health Patients

Published June 8, 2017

Editor’s Note: Evidence shows mental health patients benefit from a health care system guided by the free-market principles of patient choice, provider competition, and price transparency, according to Dr. Robert Emmons, a fourth-generation private practitioner and second-generation psychiatrist in Burlington, Vermont. Health Care News Managing Editor Michael Hamilton talked with Emmons about government policies that create barriers to consumer-driven, high-quality mental health care.

Hamilton: Can a direct-pay model, in which patients pay doctors directly instead of through health insurers, work for mental health care patients and providers?

Emmons: Psychiatry lends itself especially well to free-market, direct-pay, fee-for-service medicine, because most of psychiatry is outpatient and we are low-tech. Consequently, psychiatrists’ fees, if you compare them to fees for other medical specialties and for other types of medical services, are quite low.

In psychiatry, we can get focused on the severely ill and chronically mentally ill population: people with schizophrenia, bipolar disorder, and severe major depression. Those human beings are very compelling, and they do require a lot of care, and good care for them costs money. But the vast majority of psychiatry is for people who are largely successful in life but struggling with some form of depression or anxiety. Most people who benefit from psychiatric care are getting care as outpatients. It’s psychotherapy. It’s not high-tech, and it really doesn’t cost that much in the grand scheme of things.

Hamilton: Are mental health patients capable of judging whether a psychiatrist, psychologist, or course of treatment offers sufficient value?

Emmons: This is a really important issue, and I’m glad you asked this question. My patients are very fine medical consumers. They know what’s going on with their health. They know what’s going on in their own minds, and they’re very good at deciding what kind of treatment they need and how much it’s worth. Keep in mind, even people with schizophrenia and bipolar disorder, the vast majority of the time, are in their right minds, and the phases in which they’re not in their right minds are a relatively small portion of the overall picture of their life trajectories.

Hamilton: In general, are patients, including those without mental health conditions, equipped to evaluate treatment options, considering most lack medical training?

Emmons: Patients are very good at making decisions for themselves. The argument that patients can’t evaluate the efficacy of medical therapies for themselves is not the best argument for legislators and public policy people to be making. Legislators and public policy people are patients. If patients are not smart enough to make decisions for themselves with their own care, why in the world would they be smart enough to make public policy decisions that affect the care of their neighbors?

Hamilton: As a direct-pay psychiatrist who does not accept insurance, do you serve only middle- and upper-income patients?

Emmons: I have a free clinic where I serve uninsured or underinsured Medicaid beneficiaries, so indeed, in my practice I serve the entire gamut of income. I have opted out of the Medicare program, which means when I see a Medicare beneficiary, I don’t bill Medicare, and my patient doesn’t bill Medicare. My colleagues in private practice who do bill Medicare put quotas on the number of new Medicare patients that they will accept. When they get a phone call with a referral for Medicare, they’ll say they don’t have openings. Then, if they get a call for a patient that’s not on Medicare, all of a sudden, they have openings.

Hamilton: Public policy debate about mental health care often centers on parity or requiring insurers to cover mental health conditions the same as they cover other conditions. Is this the right public policy focus?

Emmons: A direct-pay practice, where you have exactly the same fees for every patient, is the ultimate parity, because it’s parity that’s in the hands of the patient, the consumer. It’s not the kind of parity that’s granted by government fiat, which is always susceptible to maneuvering and tinkering and changing.

Hamilton: Should state and federal lawmakers increase Medicaid funding for mental health patients?

Emmons: Vermont has the highest rate of Medicaid coverage in the nation, and a staggering 30–36 percent of our population is on Medicaid now. And guess what: We don’t have enough inpatient psychiatry beds. I don’t think it’s a coincidence that we have a severe crisis in the supply of outpatient psychiatrists or a severe crisis in the number of psychiatric inpatient beds. I think that’s because we have such a high rate of the population that’s covered by Medicaid. Medicaid does not pay the real cost of treatment.

Hamilton: How does a state’s high percentage of Medicaid patients jeopardize that state’s mental health care market?

Emmons: If Medicaid is underpaying for psychiatric inpatient treatment, that means the hospital will allocate fewer beds for psychiatry. Then, not only will people on Medicaid not get admitted even though they might have the coverage on paper, people who don’t have Medicaid won’t get the bed. The bed is not there, because Medicaid is underpaying. When psychiatrists get paid less than fair market value, medical students don’t want to go into psychiatry.

The best thing to do in public policy is to take the focus off the third-party payment, and you will empower individuals.

Internet Info:

Emma Vinton, “Mental Health Patients Gain Treatment Access Under New Medicaid Rule,” Health Care News, The Heartland Institute, June 2017: https://heartland.org/news-opinion/news/mental-health-patients-gain-treatment-access-under-new-medicaid-rule

Tony Corvo, “Mental Health Access Shortages Persist Despite State Political Climates,” Health Care News, The Heartland Institute, January 12 2017: https://heartland.org/news-opinion/news/mental-health-access-shortages-persist-despite-state-political-climates

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