Mental health spending in U.S. has skyrocketed since start of pandemic

A new study found that spending on mental health services rose 53.7% between March 2020 and August 2022 in a large group of people with employer-provided insurance. Photo by tiyowprasetyo/Pixabay

When the pandemic began, spending on mental health services skyrocketed and it continues to rise even as use of telehealth services leveled off.

That’s the key takeaway from a new study published recently in JAMA Health Forum.

Some rules for expanded payment for telehealth services have now expired, so it’s not known whether this level of spending will continue, according to researchers at the RAND Corporation and Castlight Health.

“If greater utilization of health services drives higher health care spending, insurers may begin pushing back on the new status quo,” said lead author Jonathan Cantor, a policy researcher at RAND, a nonprofit research organization.

“Insurers may look for ways to curb costs and that could mean less flexibility about using telehealth for mental health services,” he said in a RAND news release.

Cantor and his colleagues found that spending on mental health services rose 53.7% between March 2020 and August 2022 in a large group of people with employer-provided insurance. Use of mental health services increased by nearly 39%, according to the research, which used claims data from about 7 million commercially insured adults.

The analysis included anxiety disorders, major depressive disorder, bipolar disorder, schizophrenia and PTSD.

The claims information was from Castlight Health, a health benefit manager for employer-sponsored health insurance plans for about 200 employers nationwide.

From March 2020 to December 2020, the acute phase of the pandemic, in-person mental health services dropped by 39.5% while telehealth services increased 10-fold compared to the year before. Use of mental health services rose 22% overall increase during the period.

Between December 2020 and August 2022, use of telehealth for mental health issues stabilized at roughly 10 times pre-pandemic levels. In-person mental health services rose 2.2% each month over the period.

By August 2022, in-person mental services had returned to 80% of pre-pandemic levels.

The study found that during the post-acute period, there was a gradual increase in spending rates as tele-mental health service spending remained stable while spending on in-person care gradually rose.

The average spending rate in this period was more than $3.5 million per 10,000 beneficiaries per month, compared to about $2.3 million before the pandemic.

“The changes that occurred during the COVID-19 pandemic have triggered a significant expansion in the use of mental health services among adults with employer-based health insurance,” Cantor said. “It’s remains uncertain whether this trend will continue or return to levels similar to those seen before the pandemic.”

Co-author Dr. Dena Bravata, senior scientific adviser at apree health, said the demand for mental health services underscores the critical need to make behavioral health services part of primary care.

“Through this integration we can address the growing issues around lack of access, affordability and stigma, while providing a more comprehensive, person-centered approach to overall health,” she said in the release.