The Productivity Commission’s Draft Report illustrates the benefits and risks of economic perspectives on mental healthcare

In 2018, the Australian Government instructed the Productivity Commission to examine the social and economic effects of poor mental health, as well as make recommendations on how they might be addressed. The resulting Draft Report demonstrates both the benefits and risks of an economic approach to these issues. Some of the broader systemic recommendations have merit such as the need for stepped care, coordinated crisis management and the important role of welfare, housing and the workplace in improving mental health. However, there are areas of concern, particularly for mental health services in the public sector. One is a disproportionate emphasis on prevention and intervention in the early years of life for strategies where evidence for effectiveness is limited. Another is the introduction of market-based approaches such as shadow billing or a commissioner/provider split to the funding of mental health services across Australia. Among the numerous problems of such market-driven approaches are the increased costs of additional bureaucracy and the lack of commissioner expertise in planning services or evidence-based practice. As a result, similar arrangements have been abandoned in other jurisdictions. The Commission’s final recommendations and the Australian Government’s response are awaited and the resulting changes to the mental health system, and beyond, may well be influenced by the COVID-19 pandemic. However, reform should be based on evidence and achieved without increasing administrative complexity.