State mental health funding and mental health system performance

Background: The evaluation of state mental health system performance is a priority to funders, service providers and clients. Aims: This paper tests whether state levels of mental health care expenditures are associated with state indicators of performance and access. Methods: Data from multiple sources measured 2003 state mental health spending, on a per client and a per capita basis, and a set of 21 performance indicators. Performance measures addressed access to care, client reported quality and outcomes, employment, incarceration, homelessness, and other areas. Analyses were conducted at the state or person level depending on the data, and included bivariate correlations, multiple linear regression, and hierarchical categorical modeling. Results: For 17 of 21 measures, no statistical relationship was found between performance and mental health spending, after adjusting for state income and illness severity. Spending was related to basic access measures and to lower incarceration rates, but not to the remaining measures of quality or outcome. Discussion: The results suggest that expenditures through state mental health authorities in the United States do not translate to improved outcomes or quality. This may be due to ineffective administrative practices and policies which are not conducive to promoting best practices. Limitations of the data include the cross-sectional design and some weaknesses in measurement. Implications for improvement of state systems are discussed, including the need for policies that emphasize shared state-local models to implement treatment programs of known effectiveness.