Mental health network

Economic theories relevant to public service provision part 2

04 / 12 / 2019

Part 2 of economic theories relevant to public service provision shows how insights from economics can help to inform decision-making about mental health services.

In this second briefing by the Mental Health Economics Collaborative (hosted by Centre for Mental Health, the NHS Confederation Mental Health Network and London School of Economics Personal Social Services Research Unit), the Centre’s chief economist Nick O’Shea explores the consequences of a ‘fractured market’ in children and young people’s mental health services, where competition between different commissioners to ‘shunt costs’ to each other has increased the use of high-cost ‘out of area placements’ in beds far from home instead of community-based support. This creates perverse incentives on local commissioners to cut back on community services they pay for and increase reliance on hospital beds that are funded nationally.

The briefing also explores how digital mental health interventions create very different challenges for commissioners than traditional services. Digital services can meet more people’s needs round the clock than face-to-face provision but they are not easily monitored for their quality or outcomes. This means commissioners need to find ways of comparing digital services to get the best possible help for their population’s needs.

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