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Let’s Get Real about Funding for Mental Health

Launching a report that estimated the true cost of supporting people with mental illness, then CEO of beyondblue, Kate Carnell was quoted as saying, “It shows that the issue is not how much is being spent on mental health, but how the money is being spent.”

Dr Sebastian Rosenberg, Senior Fellow at the Centre of Mental Health Research, Australian National University, argues that this is a false dichotomy. In the post below he says it’s time to get real and recognise that our mental health system needs both a re-design and a boost in funds – once we agree on what we want from it.


Dr Sebastian Rosenberg writes:

In response to a question about funding for mental health, Minister for Health Greg Hunt recently stated that mental health is a “universal challenge” for Australia and could expect to be considered for funding at each Federal budget.

At the same time, some have suggested that mental health’s main problem is not with the total amount of funding but rather how it is allocated. But is this true?

The level of funding provided for mental health in Australia has been considered as part of many inquiries and reports.  It has been a common feature of the 32 separate statutory inquiries conducted into mental health between 2006-12 alone.  Most of these investigations have concluded that Australia’s mental health system is under enormous pressure, under-developed and under-resourced.

The money trail

Australia’s nine governments have just signed up to the nation’s 5th National Mental Health Plan.  Following on from the 2014 review of the National Mental Health Commission, the Plan sets out an ambitious agenda for change, with responsibility largely falling on each Primary Health Network (Federally funded) to work in cooperation with their local health district (funded by the States and Territories).  It is timely to consider the current funding picture for mental health in Australia.  Does it give people working in the system a realistic platform to drive the reforms set out in the Plan?

According to the Australian Institute of Health and Welfare, spending on mental health by governments was $3771m in 2004-05 and $8111m in 2014-15.  In 2004-05, mental health made up 7.11% of the total government spending on health and this had risen to 7.81% in 2014-15, the highest it has ever been.

It should be noted that government spending on mental health has fluctuated.  In 1992-93, the year Australian National Mental Health Strategy began, mental health represented 7.25% of government spending on health.  On this basis, it appears mental health’s share of the total health budget has risen by just over half of one per cent in 25 years.

Better access?

It is also important to understand where the growth, such as it is, is occurring. Since 2010-11, spending by State and Territory governments on mental health has risen by 2% per year on average.  Rates of access to State and Territory mental health services have not changed.

The rate of growth of spending by the Federal government is almost twice as fast at 3.6% per year on average.  This is fuelled largely by Federal Medicare spending on services provided by psychologists under the Better Access Program.  Medicare spending on this Program has climbed year on year since its introduction in 2006, increasing on average by 7.7% each year since 2010-11.

In 2014-15, Medicare spending on psychology services was $474.5m, or $9.1m each week.  While Australian Bureau of Statistics surveys indicated little or no change in the rate of public access to mental health services between 1997 and 2007, more recent data indicates spending on the Better Access Program may be having a positive impact for some in the community. Considering this level of investment, in an area where resources are scarce, we know very little about the impact of this spending with only one formal evaluation conducted in a decade and several critiques.

Relative under-investment

Growth in non-government mental health services has been modest, rising from 8.8% of total mental health spending to 9.6% between 2010-11 and 2014-15. These services were always a peripheral element of Australia’s mental health service landscape, which remains hospital-centric and fragmented. Australia has largely failed to invest in service alternatives to hospitalisation, certainly not to the scale necessary.

This leaves our mental health workforce perpetually under pressure, focusing on providing care to people only once they are extremely unwell.  This is akin to treating breast cancer only once the lump is too big to ignore.  This creates a challenge to make mental health a place where health professionals wish to work.

Per capita government spending on mental health was $266.67 in 2004-05 rising to $360.75 in 2014-15. This represents a 35% increase over the period. Per capita spending on health overall was $3831 in 2004-05 and $6440 in 2014-15 or a 68% increase over the same period.

Allocative efficiency needs adequate resourcing

To summarise, government mental health spending has been increasing overall but very slowly.  Where increases have occurred, they have been largely driven by Federal spending not the States and Territories.  The result is that apart from Medicare-funded fee for service care, Australians have few alternatives but to go to hospital for mental health care. This is a narrow and poorly organised response to the broad challenge of contemporary mental health system design.

It should also be noted that mental health represents around 12% of the total burden of disease, as measured in Disability Adjusted Life Years.  While there is no particular reason why the funding allocated to an area of health should exactly match its contribution to the overall burden of disease, the gap in mental health is clear.  Moving to match mental health’s burden with its funding would mean increasing government expenditure on mental health by $4.3bn.

Minister Hunt referred to several welcome initiatives, involving tens of millions of dollars to be spent over several out-years.  However, the scale of unmet need for mental health, particularly by certain demographic groups, means that these announcements could be seen as tinkering around the edges of large and complex problem.

In announcing his multi-billion dollar Council of Australian Governments mental health reform package in 2006, then Prime Minister John Howard stated there could be no quick fix.  Enduring political and financial attention was necessary.  We need a dual approach now.  Arguments around allocative efficiency and system design are vital, particularly given our current hospital-centric approach.  It would be a mistake to simply put more money into mental health as it is currently configured.  It is time for a fundamental discussion about the way we want our communities to address mental health and respond to mental illness. This will need a realistic assessment about the level of resourcing necessary to drive a safe, quality system.

*Dr Sebastian Rosenberg, Senior Fellow at the Centre of Mental Health Research, Australian National University. On twitter @RosenbergSeb

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Australian Health Promotion Association Conference 2013
Closing the Credibility Gap 2013
CRANAplus Conference 2013
FASD Conference 2013
Health Workforce Australia 2013
International Health Literacy Network Conference 2013
NACCHO Summit 2013
National Rural Health Conference 2013
Oceania EcoHealth Symposium 2013
PHAA conference 2013
2014 conferences
#IPCHIV14
AIDA Conference 2014
Congress Lowitja 2014
CRANAplus conference 2014
Cultural Solutions - Healing Foundation forum 2014
Lowitja Institute Continuous Quality Improvement conference 2014
National Suicide Prevention Conference 2014
Racism and children/youth health symposium 2014
Rural & Remote Health Scientific Symposium 2014
2015 conferences
#CPHCEforum
#CRANAplus15
#HSR15
#NRHC15
#OTCC15
Population Health Congress 2015
2016 conferences
#AHHAsim16
#AHMRC16
#ANROWS2016
#ATSISPEP
#AusCanIndigenousWellness
#cphce2016
#CPHCEforum16
#CRANAplus2016
#IAMRA2016
#LowitjaConf2016
#PreventObesity16
#TowardsRecovery
#VMIAC16
#WearablesCEH
#WICC2016
2017 conferences
#17APCC
#ACEM17
#AIDAconf2017
#BTH20
#CATSINaM17
#ClimateHealthStrategy
#IAHAConf17
#IDS17
#LBQWHC17
#LivingOurWay
#OKtoAskAu
#OTCC2017
#ResearchTranslation17
#TheMHS2017
#VMIACConf17