Economics of Mental Health

Based on a recommendation in Marginal Revolution we discussed today, in my health econ-class, this chapter on the economics of mental health. The chapter describes how mental health care is different from other types, particularly moral hazard and adverse selection problems seem to be magnified, which has an effect on costs. Some solutions such as managed care, capitation, and prospective payments have contributed to reduce the high cost of treatment, but their effects are still limited, and have generated some responses from care-givers such as skimping and stinting. 

The discussion on the elasticity of demand is also interesting (the elasticity of metal health care services is at least twice that of other types). 

In the context of a country like Guatemala chances are that a schizophrenic person will end up in jail or homeless. 

This is a powerful TED video by Elyn Saks.