Mental distress is rising, especially for low-income middle-aged women. Medicare needs a major shakeup to match need

Mental health services have a poor target, the outcomes are worsening, and out-of-pocket payments are on the rise. The new government has a difficult task in improving mental healthcare.

In this year, the first mental health policy was launched. National Mental Health and Suicide Prevention Plan is sixth in its class. The services are becoming fragmented and chaotic. And the number of people who report high levels of psychological distress has been increasing even before COVID.

Mental health services are used more in areas with higher incomes, where the mental health needs are lower. The new government must address the triple threat of mental health spending, costs, and needs.

Women in their middle age with low incomes struggle.

Middle-aged women are most affected by high levels of psychological distress, which has more than doubled from 2001-2018.

Earning less money is associated with poorer mental health. Combining gender and income, we find that only 0.4% of men in the top 20% of the income bracket have high levels of psychological distress. This high level of psychological distress is more than 28 times higher (11.9%) among women in the lower 20% income bracket.

Mental health services are therefore targeted at people with low incomes, especially women in their middle age. Medicare for Mental Health fails to meet any reasonable test for universality, which would ensure that mental health services are provided equally for all Australians.

It is based on an “inverted care law,” which means that those who need the most are the ones to receive the least. Many poorer people in their mid-life and those living in more impoverished areas who need mental, allied, and psychiatric care only receive a minimal amount of GP services. Sometimes, the treatment is so limited that it worsens mental health.

Read more: Labels like ‘psycho’ or ‘schizo’ can hurt. We’ve workshopped alternative clinical terms.

Help is out of reach for many.

A market-driven model of service is responsible for this mismatch.

Medicare rebates are the main way that Commonwealth Government mental health care is supported. GPs, psychiatrists, and psychologists provide these rebate support services.

Medicare rebates do not apply to team-based services but are rather available for individual clinicians. A psychiatrist referral or “mental health treatment plan” can be used by a GP to unlock additional mental support. This allows Medicare rebates on visits to psychologists and other professionals.

Here’s the problem. Only about 40% of Medicare-subsidised services for psychologists are bulk-billed. These plans are only reviewed by their GP nearly half the time.

Medicare funding for psychologists and psychiatrists is therefore inequitable and not well targeted. Both psychiatrists and psychologists are largely out of reach for those with low incomes.

Read more: Mental health: a new study finds simply believing you can do something to improve it is linked with higher wellbeing.

Agree on where we’re heading.

The taxpayers get more value for their money when spending is better aligned with needs. A destination is the first step to service redesign.

The National Mental Health Strategic Planning Framework is the current way to express what the mental healthcare system should look like in terms of operational terms rather than policy waffle. This does not guide planning consistently and needs to be revised. It should include how social factors of health, such as relative disadvantage, impact community mental health care needs.

There was no commitment made before the election to increase funding for mental health. The mental health needs of low-income people, in particular, are not met. Redistribution will be necessary without extra funding. Redistribution of funding will be required without extra money.

Fresh frame

Commonwealth responses to mental health needs are siloed and poorly integrated with broader health care. Labor’s pre-election Strengthening Medicare Policy offers a new context for mental health and provides the possibility of a more coordinated response.

In the next 5-10 years, block payments to GPs will be supplemented by fee-for-service and performance payments. Where will mental health be included? What opportunities could enrolment offer to improve access to primary integrated mental health care?

The risk adjustment of enrolment-based financing will be necessary, with higher payments being made to patients who have greater needs. In the new formula, mental health status will be considered as a factor of health. Then, the general practices of caring for and supporting more individuals with mental illness will attract higher funding.

The risk adjustment should also be higher for those with economic or social factors that are associated with poor mental health. For example, unemployment. We need to determine what support and services GPs will provide in exchange for the new enrolment payment.

Low payments, which would imply few additional services, wouldn’t drive the necessary transformations in mental health care. A higher payment could be phased in to help change mental health care. The existing funding for mental-health-care plans can be merged into the enrolment fee. The cost of a psychiatrist and other services that these plans unlock could also be included in the enrolment payment.

New funding model

The funding should enable allied health professionals, such as occupational therapists and social workers, to use their specific skills. GPs could either hire psychologists or other providers themselves or subcontract their services. Primary health networks could also play a part in this by accrediting or developing networks of services with GPs.

Access to mental health care could be transformed by a new funding model that weights funding for those with the greatest needs and integrates it more closely into general practice. This would make the system more seamless and equitable, resulting in better quality care at the same price.


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