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A new study has found that the out-of-pocket costs for mental health care are skyrocketing, causing Australians to delay seeking help amid a surge in demand for psychologists and psychiatrists. 

The study found that out-of-pocket costs were rising much faster than overall expenditure on mental health care. Average co-payments per service have almost doubled between 2013 and 2021. 

Experts say the data highlights issues with a fee-for-service mental health care model, arguing the sector needs greater investment to improve multidisciplinary care and better match patients with the right professionals.

More demand and higher costs 

The study looked at mental health service costs from 2013 to 2021. While Medicare rebates for mental health services grew by 70% between 2013 and 2021, out-of-pocket costs increased by 164%. 

There has been some improvement: in 1980 Australia ranked third highest in the world for co-payments, and by 2018 we had dropped to 10th place. 

But mental health care is still expensive. Services cost $35 million a week, around $8 million of which comes from copayments. Around 12 million mental health services were provided each week from 2020 to 2021, an increase from 8 million in 2013 to 2014. 

The study also found huge variations in how much people were paying for services based on where they lived. Some communities paid four times as much in out-of-pocket costs, even when compared with statistical local areas of similar socio-economic status.

Lead author of the study and lecturer at Sydney University’s Brain and Mind Centre Dr Sebastian Rosenberg told Crikey people were being deterred from seeking help.

Australians delaying help 

The National Study of Mental Health and Wellbeing found that in 2020-2021, 43% of Australians aged 16 to 85 had experienced a mental disorder at some point in their lifetime, and one in five Australians had a 12-month mental disorder. That number increases to two in five people for those aged 16 to 24. 

But just 47% of people with a 12-month mental disorder saw a health professional, with women more likely to seek out services than men. 

That same year, 15.3% of people delayed or didn’t see a psychologist, psychiatrist or other mental health professional for their mental health due to cost (compared with just 5.8% of people who delayed seeing or didn’t see a GP).

The Better Access initiative was introduced in 2006 to increase access to Medicare rebates for mental health treatment. But the number of new clients in the program has been decreasing over time. In 2008, 68% of those accessing the program were new clients. In 2016-17, that number had dropped to just 32.6%. 

Rosenberg said the fee-for-service model wasn’t appropriate for mental health care, arguing multidisciplinary care teams provided better support, especially for those with long-term mental illnesses. Medicare funds 20 sessions with a mental health care professional — an increase from 10 following the COVID-19 pandemic. 

But for those who have used up their sessions, or who can’t find a professional, it means they have to wait until they are in an acute crisis to be hospitalised, and are often discharged with no ongoing support. While the National Disability Insurance Scheme funds support worker services, it’s incredibly difficult for those seeking support for psychosocial disabilities.

“What do we do with a person with schizophrenia when they are well?” Rosenberg said. 

“We need to be thinking about primary care beyond just anxiety or depression. We need to be saying, ‘How do we provide for the physical health care needs of a person with schizophrenia? How do we manage their medication? How do we also deal with their psychosocial needs of employment and housing, education and other things?’”

Where to from here? 

Australians for Mental Health campaign director Chris Raine told Crikey current national funding for mental health services should be doubled. 

Mental illness and substance use disorders account for 13% of the burden of disease. While the October budget was lauded as the “well-being budget,” it included just $24.3 million over four years to improve access to mental health services.

The pandemic saw a surge in demand for mental health services, especially in Victoria following protracted lockdowns. Doubling Medicare-funded mental health sessions has also put a strain on the system. 

Raine says there needed to be not just a focus on increasing the workforce, but on improving how people are matched with professionals, to ensure they’re getting the care they need. 

“We’re advocating for investment in waitlist and access systems so that people know how to find someone, and where else they can go to find someone when they need to,” he said.

“We don’t put a lot of effort or enough effort into improving the evaluation of the service and the navigation to find the right service and to move into a different service if that’s not right for them.”