August 8, 2008

Projections of National Expenditures for Mental Health Services and Substance Abuse Treatment, 20042014

This is the fifth in a series of reports under the Substance Abuse and Mental Health Services Administration Spending Estimates (SSE) project, begun in 1996, on expenditures of national spending for mental health (MH) services and substance abuse (SA) treatment. This report forecasts spending for 2004-2014. The definitions, design, and methods used in the report on historical estimates and projections of expenditures follow closely those used in the National Health Expenditure Accounts produced by the Centers for Medicare and Medicaid Services. Projections are intended to provide a realistic picture of future spending for mental health and substance abuse treatment based upon trends that have existed in the past and laws and regulations known to have been enacted for the future. Key findings are: spending on MH and SA treatment is expected to double between 2003 and 2014 and is anticipated to continue falling as a share of all health spending. State and local governments will have an increasing share of SA spending. Medicaid is forecasted to fund a increasingly larger share of treatment costs for MH, and prescription medications are expected to be the major driver.