Washington State Department of Social and Health Services

A brief literature review reveals that mental health treatment reduces medical costs for some populations. The cost offsets are most pronounced for individuals with chronic medical conditions, such as heart disease, who are treated for depression. Also, providing a general Medicaid population mental health treatment through a managed care arrangement has been shown to reduce subsequent medical service use and costs. However, for individuals with serious mental illness, mental health treatment may not generate medical cost offsets. In fact, for this population mental health treatment may actually increase medical costs as symptoms of mental illness stabilize and these consumers begin to access needed medical care. Providing mental health services to aged consumers, while promising, have not yet shown to generate any medical cost offsets.