Targets, spending decisions and postcode lotteries in the NHS can be improved by applying economic theory to practice, according to a briefing published today by Centre for Mental Health in partnership with the Mental Health Network, which is part of the NHS Confederation.

Economic theories relevant to public service provision (Part 2) by Nick O’Shea shows how insights from economics can help to inform decision-making about mental health services. It finds that waiting time targets for mental health crisis services, for example, only tell half the story of what matters to patients. It concludes that expected treatment times would be a better measure of effective crisis care.

The briefing also explores the consequences of a ‘fractured market’ in children and young people’s mental health services, where competition between different commissioners to ‘shunt costs’ to each other has increased the use of high-cost ‘out of area placements’ in beds far from home instead of community-based support. This creates perverse incentives on local commissioners to cut back on community services they pay for and increase reliance on hospital beds that are funded nationally.

The briefing also explores how digital mental health interventions create very different challenges for commissioners than traditional services. Digital services can meet more people’s needs round the clock than face-to-face provision but they are not easily monitored for their quality or outcomes. This means commissioners need to find ways of comparing digital services to get the best possible help for their population’s needs.

Centre for Mental Health chief economist Nick O’Shea said: “Economic theory can help with many of the everyday challenges of commissioning and providing mental health services. It can point to better ways of measuring how well a system is working, it can challenge postcode lotteries in funding and services, and it can help the NHS to achieve better value for money. As citizens, service users, carers and professionals, we all want the NHS to achieve the greatest possible benefit for people’s health. Insights from economics can help us make that a little bit easier in practice.”

Mental Health Network chief executive Sean Duggan said: “Making economic theory approachable and accessible is key to ensuring its positive impact on the delivery of services, and ultimately patient care. The findings of this latest publication show that a successful and reliable mental health service of the future hinges on embracing digital services and developing a more collaborative approach, where incentives for different parts of the system are aligned. Understanding why and how to deliver this is at the heart of achieving that, which is why research and publications like this are an invaluable resource for our healthcare leaders.”