Health policy analyst Dr Lesley Russell has been poring over the federal budget papers, investigating the implications for health across the board and in specific areas.

Below is the summary from her report investigating the implications for mental health (and her Indigenous health analysis is coming up next…)

She warns that the budget will have many negative consequences for people with mental illness, and suggests that the current review of mental health programs is unlikely to bring much comfort.


Lesley Russell writes:

Despite the Abbott Government’s rhetoric of burden-sharing associated with the 2014-15 Budget, it is increasingly apparent that the most disadvantaged in the community will bear most of the burden.

For people with a mental illness – who are already among the most disadvantaged in Australian society, and who currently confront many barriers to access the services they need – this budget raises those barriers and imposes additional cost burdens on them and those caring for them.

There is a raft of provisions in this budget that will make healthcare services harder to access and will undermine the ability of people with mental illness to lead ‘contributing lives’ (as outlined by the National Mental Health Commission) in their communities.

People with mental illness and mental health problems will clearly be affected by the new $7 co-payment to see their general practitioner, though only up to the $70 cap if they hold a pension or concession card.  Co-payments will not apply if GP visits are billed under ”chronic disease management” or ”mental health management ‘ items.

It will be interesting to see if rates of these types of consultations now spike. The impact could be more than $7 for those patients seeing doctors who do not bulk bill as Medicare rebates to GPs will be reduced by $5.

Many people will have to rely on the altruism of their doctor or go without needed care.  The possibility of headspace programs also being affected by the new co-payments has not been raised but this is surely likely.

The financial costs of mental illness are further increased by the new $6 co-payment for prescription medicines. This is a new disincentive for people with mental illness to go and see the doctor and to comply with their medication regimes. Adherence to anti-depressant and anti-psychotic medication is already poor and requires regular monitoring by GPs or specialists.

Those who work in the health sector see this as some kind of perverse cost-shifting: as federally funded primary healthcare services are withdrawn, emergency services and state-funded hospital services are left as the only option. That not only represents poor quality care but a poor use of scarce healthcare resources.

It seems the only aim is to reduce the overall spending obligations of the federal government, regardless of the personal, social and economic consequences elsewhere.

This budget contains just $56.3 million / 4 years in new spending on mental health programs, $32.9 million of which is to meet election commitments.  This is offset by $53.8 million / 2 years in cuts.  In addition it is concerning that $230.6 million previously included in the National Partnership Agreements on Mental Health for Early Psychosis Youth Centres is no longer in the NPs as listed in Budget Paper No 3. We must take it on faith that this funding continues as outlined in previous budgets.

Fears for the future
Mental health policy is currently on hold, pending the current on-going review of mental health programs. Health Minister Peter Dutton announced in February that the National Mental Health Commission would review “all existing programmes across the government, non-government and private sectors”. The aim of the review is to “identify gaps in service delivery, inefficiency, duplication and excessive red tape.”

The report is due to be delivered to the Government by the end of November.

While a thoughtful, evidence-based review of mental health services is not something that should be feared, in this case there are concerns that it simply represents a delay in difficult decision making.

Given the host of recent reports and recommendations, especially those from the National Mental Health Commission itself, it is hard to argue that we don’t already know what needs to be done, where funding and reform should be a priority, and what isn’t working.

Given the pointed focus in the Review’s Terms of Reference on efficiency, the paucity of the Coalition’s election policies on mental health and this Government’s ideological opposition to the universality of Medicare and “free” healthcare series, we should all be very nervous about what is to come.

While all the evidence points to a huge need for more spending in mental health care, the opposite looms as much more likely.

National data on mental health spending that is current and accurate is impossible to come by. By the government’s own reckoning, mental disorders account for 13.1% of Australia’s total burden of disease and injury and are estimated to cost the Australian economy up to $20 billion annually, including lost productivity and labour participation. The AIHW determined that national recurrent expenditure on all mental health-related services in 2011–12 (the most recent data available) was around $.2 billion.

However, the costs are likely much higher. A review of mental health expenditure and system design conducted in 2013 by Nous Group and Medibank Private estimated direct health expenditure of at least $13.8 billion, and non-direct expenditure of at least $14.8 billion.  The total expenditure of $28.6 billion is equivalent to 2.2% of Australia’s Gross Domestic Product (GDP). This calculation excludes indirect costs, such as lost productivity.

The Sax Institute’s Evidence Check Review, conducted for the Mental Health Commission of NSW, shows that the conservative cost of mental illness to the community is more than $10 billion a year.

On this basis, somewhere between 5-10% of total health spending goes to mental health, a percentage that does not reflect the disease burden or the high economic cost.  Moreover, mental health’s share of the total health budget has declined over recent years as total health spending has increased.

Huge unmet need
The consequence is a huge level of unmet need. Less than half of Australians with a mental health disorder receive appropriate support and treatment.  For this reason the National Mental Health Commission has called for a doubling in the proportion of the Australian population who receive “timely and appropriate mental health services and support.” 

Even a relatively modest increase in the proportion of people seeking help for mental health problems, combined with projected Australian population growth, will produce a cumulative increase in the use of mental health services and existing services will not be able to meet this demand. 

It has been estimated that, under business as usual, the current mental health system will require at least 8,800 additional mental health professionals over the next fifteen years in order to be able to deliver on this objective.

We must hope that the mental health review will consider these issues.  It will be hampered by the fact that, as revealed by the Sax Institute review, there is little Australian research available on where taxpayer dollars would be most effectively spent.

Most research on what might work to reduce the burden of mental illness has focused on medication and therapy rather than prevention and early intervention programs. 

Despite two decades of investment in improving mental health services, the mental health of Australians has not improved, and this is likely because adequate resources and emphasis have not been devoted to prevention.

• Dr Lesley Russell is Adjunct Associate Professor at the Menzies Centre for Health Policy at the University of Sydney.



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