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Member Research & Reports

Member Research & Reports

Rutgers Study Examines How Changes in Income, Employment, and Health Insurance Affect Mental Health Spending

A new Rutgers School of Public Health study has found that changes in employment contribute to a change in family spending for mental health care services.

Changes in a family’s economic status can have profound and complex implications on the mental health of its members and on its health care spending decisions.  On one hand, the loss of economic status, such as unemployment, income, or insurance, may negatively impacts mental health. In response, families may allocate or shift additional resources to mental health services. On the other hand, a decline in its economic status may require a family to re-prioritize its spending decisions, both overall and with regard to spending on specific health services leading to a potential decline in family mental health services spending.

The study, led by Dr. Irina Grafova, examined how changes to the family’s economic status, such as loss of income, employment, and health insurance, affect the family’s spending on mental health services. Dr. Grafova and colleagues analyzed data from 5194 two-parent and 2665 single-mother families, with at least one child ages five years, who completed the Medical Expenditure Panel Survey-Household Component.

The researchers, who included Dr. Alan Monheit and Ms. Rizie Kumar, found strong evidence that families do respond to losses in economic status by increasing their spending on mental health services. Specifically, loss of employment results in an increase the likelihood of incurring a mental health care expenditure by the family, as well as an increase in the amount of such spending. Spending increases were also noted for overall mental health spending as well as for spending on ambulatory mental health care services and spending on prescription drugs for mental health, and find that the impact of an employment loss on ambulatory care mental health spending exceeds that for prescription medications. Finally, the researchers also found that gains in employment result in a decline in the family’s mental health spending. This could signal either a decline in need of services or obstacles in accessing services, particularly among single mothers, accentuated by the workplace.

“Our results support a strong body of existing evidence that shows changes in economic status impacts family mental health spending” comments Dr. Grafova. “While it may be reassuring that families experiencing an employment loss are able to obtain mental health services, we cannot assess whether the increase in such spending is adequate to address the attendant mental health problems. We recommend additional research and the consideration of non-medical interventions, such as, employment counseling at the workplace, re-employment placement services, and individual and family counseling to address the potential for depression, substance abuse and other mental health problems.”

How do changes in income, employment and health insurance affect family mental health spending?” was recently published in the Review of Economics of the Household. This paper is one of several publications funded by a grant from the Agency for Healthcare Research and Quality (AHRQ R01HS024053), “Economic Shocks and Family Health Security.”