The rising cost of health care in the United States has been a point of discussion for decades, and a recent report by Milliman has shed new light on just how significant behavioral health conditions are in driving those costs. Despite the fact that patients with behavioral health conditions represent only 27% of the population studied, they account for nearly 57% of total health care spending. However, what is most striking is how little of that money is directed toward behavioral health treatment itself. The findings reveal a critical imbalance in how the health care system allocates resources and highlight the urgent need to invest more in mental health and substance use care.
Key Findings From The Milliman Report
The Milliman study, commissioned by The Path Forward for Mental Health and Substance Use and funded by the Mental Health Treatment and Research Institute, analyzed 2017 commercial health care claims from 21 million people. Its results revealed that patients with both physical and behavioral health conditions drive the majority of spending across the system. While 27% of the population studied had a behavioral health condition, this group was responsible for 56.5% of all health care costs.
The analysis also revealed just how little spending went toward treating behavioral health directly. Half of all patients with behavioral health diagnoses received less than $68 per year for behavioral health treatment. Another 25% received between $68 and $502 annually. Altogether, only 4.4% of total annual health care costs were allocated to behavioral health treatment. The rest went toward physical and surgical services, even though behavioral health conditions were identified as significant cost drivers.
Why The Disparity Exists
The disparity between high overall costs and low investment in behavioral health treatment can be attributed to a variety of systemic factors. One key issue is limited access to behavioral health providers. Despite parity laws that require insurance companies to cover behavioral health at the same level as physical health, many patients still struggle to find affordable, in-network providers. This lack of access leads to delayed diagnoses and treatment, allowing behavioral health issues to worsen and contribute to higher physical health care needs.
Another factor is stigma. Many patients may not seek care due to fear of judgment or misunderstanding about mental health and substance use disorders. Others may not recognize the connection between their behavioral health symptoms and physical health complications, leading them to focus solely on physical care while ignoring behavioral health.
Finally, health care systems have historically treated behavioral health and physical health separately. Fragmented systems of care make it difficult to address conditions holistically, despite the growing recognition that behavioral and physical health are deeply intertwined.
The Human And Financial Cost
The report’s findings are not only about numbers but about the human toll of untreated or undertreated behavioral health conditions. Depression, anxiety, and substance use disorders, when left unmanaged, can worsen chronic physical conditions such as diabetes, heart disease, and respiratory illness. This, in turn, leads to higher hospitalizations, emergency room visits, and surgical interventions — all of which drive up costs.
Henry Harbin, former CEO of Magellan Health and adviser to The Path Forward, called the results “astonishing,” noting that these patients are being diagnosed or treated by health care professionals yet still receive very little investment in their behavioral care. Without adequate behavioral health treatment, patients face worsening health outcomes and diminished quality of life.
The Role Of Collaborative Care Models
One promising solution is the collaborative care model, which integrates behavioral health treatment into primary care settings. This approach uses a team-based system that includes primary care providers, care managers, and behavioral health specialists. The model treats behavioral health conditions as chronic diseases, ensuring that they are addressed alongside physical conditions.
Saul Levin, CEO and Medical Director of the American Psychiatric Association, emphasized the importance of this model, noting that early identification and treatment of mental illness and substance use disorders are critical to reducing costs and improving patient outcomes. By embedding behavioral health into primary care, patients are more likely to receive timely interventions, reducing the likelihood of escalating physical health complications.
COVID-19 And The Mental Health Crisis
Although the Milliman report is based on 2017 data, its implications are even more urgent in light of the COVID-19 pandemic. Research has shown that the pandemic has significantly worsened rates of stress, anxiety, depression, and substance use. A Kaiser Family Foundation poll found that 45% of Americans reported a negative impact on their mental health due to the pandemic. Meanwhile, the Substance Abuse and Mental Health Services Administration reported a 1,000% increase in texts to its emotional distress hotline in April of 2020 compared to the previous year.
Andy Keller, CEO of the Meadows Mental Health Policy Institute, noted that the Milliman report provides a useful baseline for estimating the additional impact of the pandemic. With behavioral health needs skyrocketing, the disparity between behavioral health spending and overall health costs is likely to grow even wider unless systemic changes are made.
Recommendations For Change
The Path Forward for Mental Health and Substance Use has outlined several key recommendations based on the findings of the report. These include:
- Increasing access to affordable, in-network behavioral health providers. This requires insurers to expand provider networks and comply fully with parity laws.
- Implementing collaborative care models in primary care settings to integrate behavioral and physical health treatment.
- Encouraging early detection and intervention for behavioral health conditions, ensuring patients receive care before conditions worsen.
- Expanding access to tele-behavioral health services, which can help reach patients in underserved or rural areas.
- Promoting employer-based initiatives to make behavioral health resources more available in the workplace, reducing stigma and improving employee well-being.
The Bigger Picture
The findings of the Milliman report underscore the urgent need for systemic reform in how the United States approaches behavioral health care. Patients with behavioral health conditions not only experience diminished quality of life but also contribute disproportionately to rising health care costs. Yet the minimal investment in behavioral health treatment highlights a major inefficiency in the system.
Expanding behavioral health services, improving access, and integrating care models can help reverse this trend. These strategies not only reduce overall health care costs but also improve outcomes for millions of Americans. With the added pressures of the COVID-19 pandemic, the call to action has never been clearer.
Conclusion
Behavioral health conditions are at the heart of America’s health care spending crisis, yet they receive only a fraction of the investment needed to treat them effectively. The Milliman report shines a spotlight on this imbalance, providing data that makes the case for expanding access to care, implementing integrated treatment models, and prioritizing behavioral health alongside physical health. If the health care system fails to address these disparities, the costs — both human and financial — will only continue to rise.
