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Abstract
Accounting for 24 per cent of total disability in Australia, mental health disorders result in significant social and economic costs. Health care costs alone amounted to $4.1 billion in 2004-05. Mental health sufferers are more likely to be in low income groups and they often lack the financial, educational and social resources required to seek appropriate treatment. To date, no economic studies in Australia have investigated income and price issues related to the demand for mental health care, nor have any previous studies considered the importance of concession prices associated with the Australian health card for accessing mental health medication.
My first paper establishes the trend in the use of mental health medication in Australia from 1989 to 2004-05, which has previously not been documented. Using decomposition analysis to investigate the contributing factors to the three-fold increase in the use of mental health medication over this period, I show that socio-demographic characteristics account for only a small amount of the growth. An examination of trends in the association of income with mental health risk and with mental health medication use shows a negative income gradient for both.
My second paper examines in greater depth the effect of income on mental health medication use in 2004-05. Selection methods are used to separate the effect of income on medication use from the effect of income on mental health risk. By estimating mental health medication use separately for those with and without the health card, I determine that having the health card improves access to mental health medication use and that a positive income gradient for mental health medication use exists for those without the health card.
My third paper uses a natural experiment approach to determine the price responsiveness of mid-high income seniors for mental health medication following income eligibility increases in 1999 for the Commonwealth Seniors Health Card. The results indicate that after controlling for health status no significant change in mental health medication use occurred following the policy for this group of mid-high income seniors, confirming the greater importance of the health card for mental health sufferers with low income.