Document Type

Chapter of Book

Publication Date



health insurance, health care costs, mental health care


In this chapter, we examine consumption patterns and health outcomes within a health insurance system in which mental health benefits are administered under a carved-out insurance plan. Using a comprehensive dataset of health claims, including insurance claims for both mental and physical health services, we examine both heterogeneity of consumption and variation in outcomes. Consumption variation addresses the regularly overlooked question of how equal insurance and access does not translate into equitable consumption. Outcomes variation yields insights into the potential harms of disparate consumption and of uncoordinated care. We find that even when insurance and access are held constant, consumption of mental health services varies dramatically across race and class. We are unable, however, to find any evidence that higher levels of consumption correspond with improved health when health status is controlled. We also find some evidence of the costs of fragmentation, such as uncoordinated care, low adherence rates, and variation in sources of care. These findings have important implications for both the delivery of health services and the administration of health insurance benefits.

Library of Congress Subject Headings

Cost of medical care, Mental health services, Health insurance