Australia needs a Medicare system for mental health

Australia is in the midst of a mental health crisis.

At any given time, one in five of us will be experiencing mental ill-health and almost half of us will be affected by a mental health disorder.

Policy solutions are needed to address this crisis. It’s time our government considered bringing mental health into the Medicare system.

A publicly funded, universal mental healthcare system, or “Mentacare”, is not just good health policy — it’s also good economic management. A recent Productivity Commission draft report on our mental health system estimates that mental ill-health and suicide cost Australia approximately $130 billion every year, not taking into account the costs associated with broader social effects such as the stigma that can lead to lower social participation amongst those affected.

Despite government subsidies, the direct cost of seeking treatment is borne overwhelmingly by those affected by mental ill-health. The standard fee for a 45 to 60 minute consultation with an accredited psychologist is $251 per session. For the average Australian, that’s almost a quarter of their weekly wage.

For those who can afford private health insurance, psychiatric issues are in the top five reasons for hospital admissions claims, at an average cost of $13,000 per patient per night.

What should a public response look like? 

Arguably, the best public mental health system would be one that replicated our existing public health system. When most people are, or suspect they are, experiencing a health problem, their first step is to go to their local doctor. GPs are the frontline of our health service, and they also represent the best frontline for a universal mental health service.

The fact that GPs are already treating a significant number of mental health disorders is a strong indication that primary care would be a good place to start investing in a Mentacare approach.

GPs already treat almost a third of people affected by mental ill-health, yet in 2018 funding for GPs accounted for less than 9% of all state and federal health spending combined.

The Royal Australian College of General Practitioners has called for greater government investment in the training and support that GPs receive relating to mental health. This would involve a reassessment of the time it takes to consult with patients presenting with mental health conditions, increased funding for mental health consultations, and a “no-wrong-door” approach, where a patient is accepted regardless of inclusion criteria.

The next step would be to invest in the psychological workforce. In 2018 there were 35,906 registered psychologists in Australia. Given that 3.8 million Australians are affected by mental ill-health every year, that means that there is one psychologist for every 106 people suffering from a mental health disorder.

This is why the mental health workforce is advocating for a significant increase in graduate positions and funding. Additionally, it stresses the importance of mental health educators, peer support workers and other non-clinical mental health professionals. While acute mental health services, like the hospital wards that treat people experiencing severe crises or psychosis, are stretched to breaking point, many of the pressures could be relieved by investing in non-clinical healthcare workers.

How much would it cost?

Starting with primary care, the government currently spends $10 billion a year on general practice and related services. A conservative estimate of the funding needed to support GPs to accommodate a greater share of mental health provision would be an increase of 40%, or an additional $4 billion.

Fully funding 50,000 psychologists across the country at an average salary of $73,814 a year plus superannuation, leave and administration provisions would cost an additional $5 billion.

While $9 billion is a lot of money, it’s worth putting it in context. In 2019-20 the government will spend approximately $7.2 billion subsidising fuel costs for multinational mining companies.

Additionally, the government is already spending approximately $1.2 billion a year on the current mental health plan subsidisation, which would be incorporated into the new spend, reducing that figure to $7.8 billion in new investment.

It’s also worth remembering that the overall societal cost of mental health is $130 billion a year, so every dollar spent on primary care has the potential to drastically reduce the overall cost of mental health.

More importantly, bringing mental health services into our existing universal healthcare system would not only remove the financial burden from those experiencing mental ill-health, but allow for a root and branch review of the system.

It would allow mental health education, prevention and treatment to become embedded into our lives, and reduce the stigma associated with seeking treatment. By fully funding mental health care and bringing our mental health system into public hands we have an opportunity to not only decrease the incidences of mental ill-health and suicide, but to reduce the associated costs.

For anyone seeking help, Lifeline is on 13 11 14 and Beyond Blue is 1300 22 4636.

Shirley Jackson is the Senior Economist at Per Capita.