Given estimates that 4% of the US population experiences severe mental illness (SMI) and up to 20% of the population experience mental illness in some capacity, the fact that May is Mental Health Awareness Month reminds us of the need to better understand, improve treatment of, and reduce stigma about these conditions. This is particularly relevant at this time as over half of Americans in a recent poll stated that the COVID-19 pandemic has negatively impacted their mental health, creating new challenges in how this nation addresses mental health and substance use disorders.

Even before COVID-19, many weaknesses existed in our mental health care system. Avalere identified 3 main barriers to effective mental health treatment: (1) limited access to high-quality mental health care; (2) a lack of care coordination across mental and physical health; and (3) insufficient innovation to keep pace with evolving mental health needs.

Barriers to Access

Americans are finding it more difficult to access mental health care, and the data point to two main reasons: a lack of providers and higher out-of-pocket (OOP) costs. The availability of mental health providers varies significantly across the US by region and metropolitan status; reports show that over 75% of US counties have severe shortages of psychiatrists and other mental health providers, a shortage particularly acute among poorer and rural communities. The Health Resources and Services Administration tracks shortage areas and estimates that almost 6,500 providers would be needed to close existing gaps to address current inefficiencies. While COVID-19 has accelerated the adoption of telehealth among providers and patients, and may help address provider shortage issues, it is not a panacea as providers and patients may lack the technology and equipment to provide and receive virtual care. Telehealth also has its limitations, as it does not substitute for in-person engagement, especially for those with SMI who require intensive treatment programs or rely on extensive group support in order to maintain stability and sobriety.

Another pertinent issue is cost. Americans often pay higher out-of-pocket (OOP) costs for psychiatry and mental health services than they do for non-mental health services. This creates significant financial barriers for patients and families seeking care. While the Mental Health Parity and Addiction Equity Act was intended to limit commercial plans from placing less favorable benefit limitations on mental health and substance use disorder benefits than general healthcare benefits, patients still face hurdles to accessing mental health care. A 2019 JAMA study showed that patients with mental health and substance abuse conditions were more likely to see an out-of-network provider and incurred higher out of pocket costs. These 2 things are likely related. Many mental health providers do not participate in payer networks because in-network negotiated rates for their services are viewed as too low. When a patient uses a provider that is out-of-network, higher OOP costs are incurred, making affordable care elusive to many. Further, higher OOP costs are not limited to services; a recent Avalere analysis has shown that cost-sharing for mental health drugs was twice that for non-mental health drugs for non-Low-Income Subsidy Part D enrollees.

Lack of Coordinated Care

Payment approaches that consider and incentivize coordinated care are a critical need. Integrating behavioral health and primary care has been shown to be an effective strategy for improving outcomes and reducing costs for mental health conditions. This approach was reinforced in January 2017 when Medicare implemented separate payments for Behavioral Health Integration services that providers furnish to beneficiaries over a calendar month service period. In January 2018, the Centers for Medicare and Medicaid Services went a step further and adopted new payment codes for Psychiatric Collaborative Care Model (CoCM) services. CoCM is an integrated model between primary care and behavioral health specialists that enhances primary care by adding care management support and regular psychiatric inter-specialty consultation. Private payers are beginning to move to integrated or value-based care as well, realizing that quality care can be cost-effective care.

Another promising development is the implementation of Coordinated Specialty Care (CSC), a term to describe a recovery-oriented approach for individuals in early or first episode psychosis. The CSC approach has been shown to decrease hospitalizations, to improve employment and education outcomes, and to do so via the utilization of a wide variety of services such as family education and support, case management, medication management, and psychotherapy. For the CSC approach to be implementable on a wider scale, public and private insurers must identify ways to reimburse for the full suite of services provided. Presently, traditional models of fee-for-service payment do not account for the entirety of CSC services provided.

From a patient perspective, coordinated care is essential when dealing with mental illness. We see clear patient roadmaps or vetted pathways for managing a patient’s condition for many other disease states, such as cancer, and the need in SMI is high. Patients often don’t know where or how to start, what services and treatments are available, or what to expect over time . This lack of clear direction places an enormous burden families and caregivers.

Need for Accelerated Development of Novel Approaches and Scaled Innovation

Psychiatric illnesses are the leading cause of disability in the US, yet drug development in this area has not kept pace with other therapeutic areas, such as oncology and rare diseases, over the past several decades. Too often, patients with severe mental illness–such as bipolar disorder and schizophrenia–are treated with older drugs that bare significant side effects, causing adherence issues in many SMI patients.

However, recent developments suggest this trend could be reversing. The US Food & Drug Administration (FDA) is supporting speedier development via Priority Review, Fast Track designation, and Break-Through designation. These expedited review processes allow the FDA to speed the review timeline for drugs that treat unmet patient needs or represent a substantial clinical improvement over existing therapies. Just last year, the FDA utilized these expedited review approaches to approve the first therapy indicated for post-partum depression and a therapy for treatment-resistant depression. There is increasing interest by the pharmaceutical industry in psychiatric therapeutics and more novel mechanisms in development, suggesting that innovative treatments are coming. According to Biomedtracker data, the late-stage development pipeline (i.e., Phase II through III) for key mental health conditions (as of early May 2020) included 29 drugs for major depressive disorder, 30 drugs for schizophrenia, 7 drugs for bipolar disorders, and 9 drugs for substance use disorder.

Technology innovations are also pushing the envelope in the treatment of mental illness. Whereas telehealth is the most talked about technology during the COVID-19 crisis, data and applications are being used in numerous ways—to design better interventions, to identify high risk populations, to help provide supportive care, and to improve care delivery. During the public health emergency, these medical and treatment innovations will be aided as policymakers create new flexibilities for care, regulators support expedited reviews for clinical improvement and unmet needs, and the industry invests in tools to scale the evidence-backed tools and treatments. Further, the clinical and financial data that can be collected, analyzed, and leveraged through stakeholder partnerships could prove transformative and help drive new insights and innovation in the mental health space.

Opportunities to Drive Toward Solutions

The challenges of access, care coordination, and innovation have long persisted in our healthcare system, and correcting them will take a coordinated, evidence-based, and collaborative approach from all sectors of the healthcare community and broader society. The coming months will be critical to ensure the mental health care system doesn’t break under the strain of COVID-19 and the mental health crisis it is precipitating. Stakeholders across the healthcare spectrum can help meet these challenges.

Avalere will continue to examine specific challenges and potential solutions across the mental health space. These include considering the opportunities for shared decision-making tools, assessing the forthcoming pharmaceutical innovations currently in clinical trial, reviewing the successes of Medicaid initiatives in the mental health space, and better understanding the evolving definition of value for stakeholders within this space.

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Check out our  COVID-19 Intel Center.

Join Dana Macher for the “Flattening the Next Curve: Mental Health During & After COVID-19” webinar on Thursday, May 14.