Mumford and colleagues6 conducted a meta-analysis of 58 controlled studies and found support for the medical cost offset effects of outpatient mental health treatment. Their concurrent study on utilization from a large private insurance database also reported significant medical cost offset, most of the savings being derived from a reduction in hospitalization. They hypothesized that mental health treatment allowed patients to stay healthy enough to avoid hospitalization for medical problems. A recent 14-year longitudinal study by Holder and Blose 7 reported a reduction in total health care costs following initiation of treatment for alcoholism ranging from 23 to 55 percent. Statistical analysis found the total post-treatment health care costs of persons treated for alcoholism to be 24 percent lower than comparable costs for a group of persons who were diagnosed with alcoholism but remained untreated.
Methodological limitations suggest caution in interpreting the evidence of medical cost offset.
Most studies have employed a pre-post design where each individual subject serves as his or her own control8. Since medical expenditures tend to peak near the initiation of MH interventions, the subsequent reduction in medical costs could be simply observation of regression to the mean1. Fraser9 also warns that use of simple indicators of cost offset such as percentage change in cost and use of hospital care may produce deceptively positive results. While medical cost offset has been found in a variety of settings and based on a variety of mental health interventions. . . Studies of other cost offsets Few, if any, studies have analyzed systematically the effects of mental health service provision on other public costs outside of medical care.