Value and System Cost-Effectiveness: The Treatment of Depression – Frank, Goldman, Arons, Huskamp

For years, skeptical policymakers questioned the value of mental health services. This Network project disarmed skeptics with hard evidence regarding the value of depression treatment. Depression accounts for a large proportion of total mental health care spending. The project developed and tested a new economic metric for the value of care: system cost-effectiveness. In simple terms, this metric is the sum of all health effects (i.e., health outcomes) from care in a system, divided by the sum of all direct treatment costs. Measuring the numerator was challenging and was too difficult to measure directly. Instead, the project estimated the expected outcomes of treatment for a sample of patients. It selected 120 different patient/treatment combinations and then relied on knowledge of clinical efficacy and effectiveness, in conjunction with expert clinical opinion. The cost figures for treating the patients were obtained from several large insurers. Applying this new method, the project found that system cost-effectiveness for depression treatment actually rose during the 1990's. The method has wide application to health care policy.

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Last modified: June 1, 2006
©2006 MacArthur Foundation Network on Mental Health Policy Research
Last Revised: June 2006