One potential concern regarding SDC participants' greater independence in making decisions about their own care and in planning mental health spending is that some participants may choose not to receive mental health services, may dramatically reduce their spending on outpatient specialty mental health care services, or may not reserve enough money in their budget for outpatient mental health services that they later need. Although reduced spending on outpatient mental health care may reflect a consumer's preferences, it could also result from misperceptions of one's own need for care. Although very little evidence is available to evaluate these concerns, such concerns may be shared by mental health providers, state authorities, and family members.
According to one of the key informants for this report, it may be necessary to stipulate some minimum level of expenditure on outpatient mental health service use to reassure providers, state authorities, and family members. Such a stipulation exists in the Texas SDC program, wherein 60 percent of an individual's budget must be spent on traditional mental health services. Other programs (e.g., SDC in Washington County, Maryland) instead stipulate that continued participation in outpatient mental health treatment is a condition of enrollment in the SDC program, offer suggested formulas for spending a certain proportion of a participant's budget on traditional mental health services, or do not impose any rules around mental health service use.
One key informant consulted for this report stated that the issue of people entering SDC and not using mental health services is "a 'red herring,' because it seldom happens." The same key informant pointed out that current public mental health system participants have the option of using no mental health care, and was not convinced that a rationale exists for having greater limitations placed on participants in SDC.
However, one possible rationale for such limitations is that SDC may alter the social contract that underpins public mental health financing. When mental health care consumers in traditional public mental health systems do not utilize mental health care, they do not alter how public mental health financing is ultimately spent; all of the monies are spent on mental health care (for other consumers). In contrast, to the extent that SDC re-allocates public mental health care financing toward non-mental health goods and services (e.g., housing, transportation, or education), public monies spent on mental health care are reduced. This re-purposing of some public mental health financing suggests a reasonable rationale exists for establishing programmatic expectations around mental health service use by persons receiving public mental health financing for SDC.
Whether or not programs impose rules around mental health service use, ongoing participation in some form of outpatient mental health treatment would seem to be an essential protection both for SDC participants and their programs. For participants, maintaining regular contact with a provider is necessary for the purpose of monitoring psychiatric symptoms and the side-effects of medications and for updating the treatment plan as service needs change. In addition, the public integrity and sustainability of SDC programs may be threatened if SDC participants do not continue in outpatient mental health treatment; the legitimacy of the individualized budget may be challenged if SDC participants do not allocate any part of their budget to traditional mental health care.
Another potential risk to consumers in SDC programs concerns a sudden and unanticipated increase in need for outpatient mental health services, which could coincide, for example, with the onset of psychosis. Chronic mental illness is characterized by fluctuating symptoms and intermittent periods of acute crisis. A consumer's service needs could increase during the middle of a plan year and, at the time of increased service need, a consumer might not have sufficient funds left over in their individual budget to pay for needed outpatient services and medications. As a result, there is a potential risk that a consumer's access to needed outpatient mental health care would be adversely affected.
In many traditional public mental health programs and in most mental health SDC pilot programs, risks associated with fluctuating need for services are pooled among all consumers in the program. While one consumer in the program may have an unanticipated increase in service need, another consumer may have an unanticipated decrease in service need. As a result, over the entire risk pool, individual variations in service need may be balanced out and the risks to individuals are minimized. Pooling a greater number of individuals tends to provide greater protection against financial risks, providing that systematic "adverse selection" of risks into the pool is not an important factor.
The existence of relatively small and independently financed SDC programs raises the concern that any one program may not have a large enough risk pool to offset financial losses for some consumers with financial savings from others. Consequently, some form of pooling of financial risks across mental health SDC programs is desirable. One way this could be accomplished would be to roll mental health SDC programs under a single umbrella program that would be managed by a state's lead mental health agency or by a managed behavioral health care organization on behalf of a state. In that case, the state or the managed care organization would assume financial risk associated with over spending. A state could also stipulate other types of financial requirements for SDC programs. A state could, for example, require that SDC programs purchase insurance against participant over spending. The premiums collected would in essence be used to finance a large risk pool. Alternatively, a state could require that each SDC program maintain a reserve fund to cover unanticipated excess spending during the plan year.