Assessment of the Mental Health Funding Marketplace in Rural vs. Urban Settings

Research center:
Lead researcher:
Project funded:
September 2007
Project completed:
December 2008

The most recent data from the National Comorbidity Study Replication (NCS-R) indicate that rural individuals with mental health (MH) problems are significantly less likely to receive any MH care for their disorder than individuals in urban and suburban areas. Reduced access to MH care in rural areas is undoubtedly due to an inadequate supply of MH specialists. The lack of MH specialists in rural areas is likely due to inadequate incentives for these specialists to practice in rural areas. Changes in reimbursement for MH services in rural areas are likely to provide the incentives necessary to increase the supply of MH specialists. Private managed care organizations have begun to disseminate evidence-based treatments for MH conditions. However, these dissemination programs tend to target primarily urban areas, especially those populations covered by employer-sponsored insurance. If the payment system is to be reorganized to provide the necessary incentives for MH specialists to practice in rural areas, it is first necessary to understand how MH services are financed in rural areas relative to urban areas.

Additionally, the source of funding for MH services may differ depending on the type of mental illness. For instance, the source of payment for services to treat people with serious and persistent mental illness, such as schizophrenia, is likely to be different than for services for people with conditions such as depression or anxiety disorders. Therefore, the aims of this study are to (1) assess the impact of rurality on the source of payment for MH disorders for all MH treatments as well as by medication vs. therapy and (2) determine whether rural-urban differences in source of payment vary by MH condition, defined here as seriously mentally ill (SMI) and all other MH conditions.

Data from the Medical Expenditure Panel Survey (MEPS), a nationally-representative survey of U.S. Households conducted annually by the Agency for Healthcare Research and Quality (AHRQ), will be used to identify sources of payment for MH services provided in urban vs. rural areas. The MEPS includes detailed information on payment source, allowing for respondents to report multiple sources of payment for a single service/healthcare event (e.g. private insurance, out-of-pocket payments, Medicaid, etc.). Healthcare events measured in MEPS include office-based physician visits, inpatient stays, outpatient clinic visits, emergency room visits, prescription drug fills, home health visits, and other medical expenses. Up to three medical conditions are listed for each event as the reason for the event. All events linked to MH conditions will be identified and included in the analysis. Individuals will be identified and assigned to urban vs. rural areas based on Federal Information Processing Standards (FIPS) code associated with Urban Influence Codes. Using this information and the weights provided by AHRQ, nationally representative estimates of payment sources and dollar amounts for MH services and medications will be calculated and compared for individuals living in rural vs. urban settings. It is anticipated that this study will result in two publications: one corresponding to each of the two aims of the study.