From a Mark et al. (2026) paper published in Health Affairs last week:
…from 2000 through 2021, mental health and SUD nominal spending grew from $40.9 billion to $139.6 billion. Mental health and SUD accounted for 4.5 percent of all medical services spending in 2000 and 5.5 percent in 2021. Real per capita mental health and SUD spending grew at an average annual rate of 3.27 percent, which was faster than the growth rate for overall medical services (2.21 percent). Our decomposition analysis showed that mental health and SUD spending growth was driven primarily by increases in the number of people receiving treatment (representing 87.3 percent of the growth) and to a much lesser extent by increases in the cost per case (12.7 percent of the growth). However, because disease severity was unobserved, these patterns may partly reflect increased treatment of less severe cases rather than unchanged severity-adjusted treatment costs. During this period, the number of mental health and SUD cases treated grew by 253 percent.
A key question is to what extent is the 2020-2021 data driven by mental health and SUD exacerbated increased mortality of loved ones and the social isolation caused by the COVID-19. If we just look at the 2000-2020 (rather than the 2000-2021 data) we do see a similar pattern where mental health spending is rising about 1 percentage point more per year than general health care spending.
While at first glance these appears to be something of a concern, given that mental health issues have been historically undertreated–due to stigma and other factors–the increasing growth of mental health spending may just be moving us a bit closer to the ‘mental health parity‘ ideal that was promised in law, but often never realized in practice.
