President's Column

To thrive as a practitioner in today’s economic climate, it’s no longer enough to have finely honed professional skills. Psychologists also need to understand the economic challenges of practicing in a changing health-care system. Unfortunately, psychologists have a long tradition of not speaking directly about money. Despite our breadth of education and skill, we are largely untrained in the economic factors that influence the way we can practice, be paid for our work and ensure access for those who need psychological services.

Our health-care marketplace is under great financial pressure. Costs are increasingly driving health-care and policy decisions. That’s why we, as psychologists, need to advance our knowledge of health-care economics so that our patients can continue to have access to quality mental health services.

Consider, for example, trends in the share of health-care dollars spent on traditional mental health services. According to health economist Richard Frank, PhD, the portion of health-care funding for behavioral health services has not increased, even though more people are receiving mental health treatment than ever before. From 1970 to 2003, the percentage of the U.S. gross domestic product spent on overall health care increased from 7 percent to 15.8 percent, while the percentage for mental health care remained flat at less than 1 percent. Even more significant is what the majority of those dollars are paying for: psychotropic medications. By 2006, 51 percent of mental health spending was for prescription drugs and 16 percent for inpatient care, leaving just 33 percent for all other care.

Another economic factor to consider is the increased demand for mental health services that is likely to result from the new health-care reform law. In addition to the extension of mental health parity to those currently insured, the new law will eventually extend health coverage to about 32 million more individuals, who will have access to mental health and substance abuse treatment. The law also authorizes grants and a new Medicaid state option to establish and evaluate integrated, interdisciplinary models of primary care. If funded, that could lead to significant changes in psychology practice since research suggests that integrating behavioral health, chronic disease management and prevention services into primary health care leads to better and more cost-effective outcomes.

A third economic reality affecting psychologists is the heightened emphasis on accountability in health care. Last year, Congress and President Barack Obama approved $1.1 billion for comparative effectiveness research. The purpose of this research is to improve health outcomes by developing and disseminating evidence-based information to patients, clinicians and other decision-makers to help determine which interventions are most effective for specific circumstances. The overriding goals are to improve quality and decrease costs in health care. The accountability “call to arms” for psychology is clear: Psychologists must demonstrate the effectiveness of our services and are well-positioned to do so.

Given these developments, psychologist practitioners need easily accessible and affordable resources to understand and meet these opportunities and challenges. Creating such resources is a major goal of my APA Presidential Task Force on Advancing Practice. The task force is working on a framework for outcomes measurement to better capture what psychologists do and is developing ways to share information and build on the recommendations of the 2009 Presidential Summit on the Future of Psychology Practice.

As psychologists, we are in the business of helping people. But we have to recognize that to provide the public with continued access to mental health services, practitioners need to understand how the marketplace affects their ability to provide quality care. For more on the business of practice, go to Practice Central.


Carol D. Goodheart, EdD, is president of APA and the APA Practice Organization (APAPO) Board of Directors. The issues addressed here touch on APA and APAPO issues. This column is based on Goodheart, C.D.(in press), Economics and Psychology Practice: What We Need to Know and Why. Professional Psychology: Research and Practice.