Vanderbilt Law Review

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When America was founded in the late eighteenth century, doctors treated mental illness with beatings, isolation, and physical restraint-all thought to help the patient regain inner reason., People exhibiting strange behavior were often forced onto the streets, run out of town, or thrown into jail.

Today we think we know a lot more about mental health care than our country's founders did. Yet in many ways we are in no better position than our eighteenth-century predecessors. Certainly, the decisions we as a society face about mental illness are just as difficult. The vocabulary we employ is more complex--"behavioral health organization," "psychopharmacology," "cost containment"-but the issues are the same: Who should pay for mental health care? How much care is appropriate? And, more fundamentally, what exactly is mental health?

This year's Special Project addresses these issues. The Notes focus on particular legal issues in the mental health care field, but in doing so, they necessarily implicate the larger national debates about mental health care and health care in general. Policymakers are currently making crucial decisions in both areas. These Notes seek to inform those decisions.

Until recently, most insured individuals received mental health benefits under the traditional fee-for-service reimbursement system. Physicians made the essential treatment decisions, particularly those concerning psychiatric hospitalization. In the 1980s, however, mental health care experienced a period of rapid competitive expansion, leading to the rise of for-profit psychiatric hospitals. These hospitals, which typically target adolescents and substance abusers, dramatically increased inpatient care, and thus dramatically increased mental health care costs.

The need to control those costs led to the emergence of managed care, which seeks to prevent providers from overutilizing health care resources by giving them an incentive to limit services. Most managed care entities, however, do not have the staff or capability to deal with mental health problems directly. Instead, they typically contract with large companies that specialize in mental health care.

Mental health care is very different under this managed care system. Under most plans, an individual who needs mental health care calls a toll-free, twenty-four-hour hotline and talks to a case reviewer. The reviewer then uses pre-established diagnostic criteria to decide what sort of caregiver the patient should see. In a typical plan, twenty percent of the available treatment staff for mental illness are psychiatrists, forty percent are psychologists, and forty percent are social workers."