Vol.:(0123456789) 1 3 Community Mental Health Journal https://doi.org/10.1007/s10597-020-00649-w ORIGINAL PAPER The Relationship Between State Mental Health Agency and Medicaid Spending with Outcomes Reed J. Robinson 1  · Jayme M. Palka 1  · E. Sherwood Brown 1 Received: 10 October 2019 / Accepted: 25 May 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020 Abstract Little is known about relationships between state mental health expenditures and outcomes. This analysis evaluated relation- ships between spending and income across the states and mental health outcomes. Relationships between state per capita SMHA and Medicaid mental health spending, as well as median household income, percent of residents on Medicaid and Mental Health America (MHA) ranking, suicide and incarceration rates were assessed using correlations and multiple regres- sions. Median household income predicted MHA overall and youth ranking. Per capita Medicaid mental health spending predicted MHA prevalence ranking. Median household income and Medicaid spending predicted access to care ranking and incarcerations. Median income, Medicaid spending and percent receiving Medicaid predicted suicide rate. The fndings suggest median household income may, in some cases, predict mental health treatment quality and outcomes more strongly than spending. However, the relationship with per capita mental health Medicaid spending on outcomes is also noteworthy. Keywords Mental health · US states · Spending · Suicide · Incarceration Introduction Healthcare costs in the United States have been growing rapidly for many years (National Health Expenditures: aggregate and per capita amounts 2018). Mental health spending is no exception. Three of the 16 conditions with the fastest rate of growth in per capita spending (ADHD & conduct and behavior disorders, anxiety disorders, and delirium) are mental health related (Dunn et al. 2018). Fur- thermore, spending on mental illnesses increased by 13.4% from 2013 to 2014, the second-fastest rate among the ill- nesses assessed (Health Care Satellite Account: Blended Data 2017). While insurance premiums are climbing faster than income (Claxton et al. 2017), access to mental health services is poor. Kessler et al. found that as many as 60% of people with a mental disorder had not received services in the prior year (Kessler et al. 2005). The National Alliance of Mental Illness (NAMI) has advised states to be more pro- active in measuring the efectiveness of their funding (Aron et al. 2009), but a review of the literature indicates that few if any states have taken a data-analytic approach to measur- ing their performance across any number of relevant mental health outcome/performance variables which has yielded academic analysis. The relationship between US medical care funding and outcomes is complex. Cooper reported that total state spend- ing on healthcare was positively associated with better qual- ity of care while Medicare spending was negatively asso- ciated with quality of care (Cooper 2009). Baicker et al.’s examination of Medicaid funding and enrollment impact on clinical outcomes also found mixed results in their study, although their examination was limited to the state of Oregon (Baicker et al. 2013). Their study indicated that increased Medicaid enrollment had no signifcant impact on physical health outcomes but was associated with a reduc- tion in the rate of depression. Previous independent evalu- ations of the relationship between state funding and mental health outcomes have demonstrated only a modest impact of funding on performance metrics. Pertinent to mental health expenditures, Hendryx found that higher levels of state fund- ing had the largest impact on improving access to care and reducing risk of incarceration (Hendryx 2008). Increased spending was not associated with signifcant reductions in homelessness or suicide rates or increases in employment. * E. Sherwood Brown Sherwood.Brown@utsouthwestern.edu 1 Department of Psychiatry, The University of Texas Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, TX 75390-8849, USA