Introduction

The United States has a mental health crisis that is not being seriously addressed, even though it is a major underlying cause of a host of social problems. Despite a few high-minded government reports and sporadic promises of reform, untreated mental illness still contributes significantly to everything from crime and homelessness to student failures and unemployment. The nearly 16 million American adults and children with serious, disabling mental illnesses and emotional disturbances have been denied something essential: reforms that hold the nation's fragmented, wasteful mental health system accountable for producing meaningful results in their lives.

The best-known reform goal, instituting parity for mental health care with other medical coverage, has been supported in the platforms of both political parties. But even with a majority of legislators in both houses of Congress endorsing the concept, it has yet to be carried out under federal law. The drive for parity has been thwarted at the federal level by some Republican legislators and powerful business groups raising false alarms about potential costs. Meanwhile, mental health reform advocates and their allies have been unable to overcome the opposition simply by arguing that parity is fair, compassionate, and affordable.

There is a way, however, to break this impasse with a Third Way policy solution -- "Parity-Plus." Lawmakers should require health insurance companies to provide equal coverage for mental health care, but also hold health care providers accountable for delivering high-quality, cost-effective services. That will require broader reforms of the mental health system. Specifically, legislation must also promote recovery for people with mental illnesses, rather than lifelong dependency, by removing obstacles that prevent proven treatments from being widely used. Legislation should also empower consumers of mental health services to be partners in their own care, and it should encourage and support mentally ill people who want to work.

By offering rigorous fiscal and quality controls, more individual choice, and compassionate, effective care, the Parity-Plus proposal acknowledges the legitimate concerns of all sides of this policy battle. This reform plan from the Progressive Policy Institute (PPI) seeks to transcend the current deadlocked debate by showing that businesses, families, and the U.S. economy as a whole can benefit when mental health problems are addressed in a cost-effective manner. As it is, both pro-business conservatives and liberal reformers have too often been stalemated on the question of spending more or spending less on mental health care. Neither side has forcefully addressed broader issues such as ensuring that we are paying for the right results.

That should be the starting point for real reform. Surprisingly, 98 percent of workers with job-based coverage have some mental health benefits, but you would not know it by looking at the scope of mental illness' devastating impact. There are so many strict limitations in coverage -- such as a maximum of 20 visits per year -- that these private plans simply are not designed to cover serious or chronic mental illnesses, forcing families to go broke spending on treatment, or to abandon loved ones to a public mental health system that is in chaotic disarray.

Mental illness is the country's leading cause of disability, and, despite a host of effective new medicines and treatments, the archaic, maze-like mental health system blocks most people from accessing them. What is the result of this failure? There are some 30,000 suicides a year, and millions of people face needless disability, unemployment, and incarceration. Less than 40 percent of those with serious mental illness receive stable, ongoing treatment, while 25 percent of homeless people have serious mental disorders and generally do not receive any treatment.

Both political parties have mostly responded with either indifference or a limited vision of what is needed to create significant mental health care reform. A weak parity law passed in 1996 had so many loopholes that businesses and their health plans easily evaded it. A stronger measure, the Paul Wellstone Mental Health Equitable Treatment Act (S.486/H.R.953), has languished in Congress since 2001, blocked by a coterie of Republican legislators, including House Speaker Dennis Hastert, and health insurance industry lobbyists. These critics of parity have generally offered a knee-jerk conservative response to the long overdue need for fair mental health coverage, clinging to the old saw that parity would impose a burdensome mandate on businesses, while ignoring the real-world savings a cost-effective approach to parity offers. In fact, strong evidence shows that parity would provide enormous workplace and hospitalization savings while raising premiums less than $1.50 a month per person. Meanwhile, President Bush has done nothing to break the congressional logjam, even though he promised to seek parity legislation when he set up his New Freedom Commission on Mental Health in April 2002.

While parity legislation is necessary, however, it is not sufficient to transform a system that has been described as a "shambles" by the president's own mental health commission. Parity must also be linked with accountability and patient-oriented outcomes. This type of enhanced parity would bring together a wave of cutting-edge reforms -- some proposed, some already proven -- that aim to promote effective treatments and tangible results, often reinforced by pay-for-performance or other incentives. These imaginative, cost-effective solutions, including outreach teams that can cut hospitalization rates for the severely mentally ill, share a single-minded focus on ensuring worthwhile results are delivered.

Surprisingly, despite the grim failures in the mental health field, there are also promising signs of bipartisan interest in reform. In 2004, Congress authorized an $82 million initiative to promote youth suicide prevention programs. It also passed the Mentally Ill Offender and Crime Reduction Act, which promotes programs such as mental health courts that route mentally ill offenders into court-monitored treatment instead of jail.

There is also cause for concern, however. The president's FY2006 budget proposed $45 billion in cuts to Medicaid during a decade, and while Congress has pared back those cuts to $10 billion, the consequences could still be severe for the mentally ill who depend heavily on Medicaid. A sharp reduction in Medicaid funding could be devastating for mental health care, since Medicaid is the primary vehicle for public funding of mental health services -- and public funds currently account for 63 percent of all U.S. mental health spending. Nonetheless, it is clear that both the federal government and the states are looking for ways to reduce Medicaid spending, because it has risen more than 50 percent since 2000 to more than $300 billion per year.

Against that tide, two bipartisan groups of elected officials are pushing for long-term Medicaid reform as an alternative to budget-driven cuts at the federal level. The National Governors Association, led by Govs. Mark Warner (D-Va.) and Mike Huckabee (R-Ark.), has made preliminary proposals to reform Medicaid while strengthening other forms of health care insurance and long-term care coverage. Sens. Jeff Bingaman (D-N.M.) and Gordon Smith (R-Ore.) led a group of senators in support of a bipartisan commission to study the program's failings and recommend long-term improvements. President Bush has agreed to create a commission but has handicapped it from the start. He has not worked with Democrats on Capitol Hill to make it bipartisan, and he wants proposals for short-term budget cuts before long-term reforms.

Reforming mental health care and improving Medicaid must go hand in hand to avoid the specter of draconian cuts. Indeed, there is even a detailed roadmap for restructuring mental health services within Medicaid that has already been offered at the state level by a coalition allied with the Tennessee chapter of the National Alliance for the Mentally Ill (NAMI). In response to the threat of deep proposed cuts in Tennessee's expanded Medicaid program, TennCare, the local branch of NAMI, embraced several innovative reforms that promote quality care and cost savings, including the use of evidence-based treatments such as medication management.

Saving and overhauling Medicaid, however, is not enough to achieve a new vision, which is emerging, of a system that makes recovery possible for the seriously mentally ill. Real reform efforts must also acknowledge that even with a disability, the mentally ill have the right -- and the capacity, with varying degrees of help -- to work and live independently. To that end, reform advocates usually do not refer to people with mental illness as, say, "schizophrenics" or "patients," which would define them by their illness and treat them as passive objects who can be manipulated by health professionals. Instead, they are often called "consumers" of mental health services. If the system is to be held accountable, its key players have to produce measurable results that matter to these consumers.

Creating a system that promotes recovery is now a realistic goal. At the heart of any genuine progressive alternative to our current failed mental health care is a transformed view of what is now possible -- even for people with the most serious mental illnesses -- a life in which they have a far greater role in making health care choices and are given the support they need to enter the workforce rather remain forever disabled. The best hope for reforming a failed system lies not the shibboleths of either the left or the right, but in a fresh approach that incorporates the bedrock principles of requiring accountability for the providers of mental health services and the empowerment of those who use them. Here, then, are PPI's five recommendations for helping to end the preventable tragedies, ruined lives, and economic waste caused by poorly treated mental illness:

1. Enact mental health parity with provider accountability;
2. Promote recovery from mental illness through proven treatments;
3. Ensure that funding follows the consumer, not the agency;
4. Provide mental illness screening to protect children; and
5. Encourage work, rather than lifelong dependency.