Although national spending on mental health and substance abuse grew between 1986-2005, it accounts for a shrinking part of the part of the pie, according to an analysis of public and private spending on health care done by the Substance Abuse and Mental Health Services Administration (SAMHSA).

Average annual substance abuse spending grew 4.8 percent and mental health spending grew by 6.9 percent during the study period, according to a Feb. 3 press release from SAMHSA. Overall spending on health care, however, grew by 7.9 percent. In 2005, spending on behavioral health care totaled $135 billion, or 7.3 percent, of the $1.85 trillion spent on all health care in the U.S.

The researchers found:

• Most behavioral health care is paid for with public dollars. Although public sources only accounted for 46 percent of all health care spending as of 2005, taxpayers picked up the tab that year for 79 percent of substance abuse treatment and 58 percent of spending on mental health.
• Behavioral health care was a tiny part of spending by private insurers. In 2005, only 4.8 percent of health care spending by private insurance companies went to behavioral health care. By comparison, mental health and substance accounted for 11.5 percent of Medicaid spending the same year. (It’ll be interesting to see if the implementation of health care reform and parity laws will change these proportions.)
• Spending on psychiatric drugs continued to grow, but at a slower rate. Spending on these drugs rocketed upward 27.3 percent 1999-2000, but grew a sedate 5.6 percent in 2004-2005. Nearly half the growth in spending on mental health between 1998 and 2002 was driven by psychiatric drugs.
• Many more dollars are being spent on medications to treat dependency on alcohol and other substances. These costs jumped from $10 million in 1992 to $141 million in 2005, leapfrogging to $780 million in 2009.  But their percentage of total substance abuse spending remained small. The 2005 figure represented only 0.6 percent of the $22 billion spent on substance abuse that year.

The full report, “National Expenditures for Mental Health Services and Substance Abuse Treatment” (PDF), can be downloaded from the SAMHSA website along with detailed spending estimates for the period.

An article reviewing the findings, “Changes in U.S .Spending on Mental Health and Substance Abuse Treatment, 1986-2005, and Implications for Policy,” appeared in the February 2011 issue of Health Affairs.