Economic evidence can help to bring about better policies and services if it is used wisely, according to a briefing paper published today for the Mental Health Economics Collaborative hosted by Centre for Mental Health and the NHS Confederation Mental Health Network.

Economic theories relevant to public service provision, by the Centre’s chief economist Nick O’Shea, explains the most widely used economic theories in relation to public services. It sets out the principles behind each theory and how it can be applied to decision-making about public policy and service commissioning. The briefing is the first of a two-part series the second of which will focus on how theory applies to the funding, commissioning and provision of mental health support. The briefing explores key ideas that are widely used in public policy and commissioning, such as savings, competition, choice and rationing. And it shows why assumptions about economics don’t always work in practice. For example it demonstrates how rationing leads to the use of high-cost services, why a correlation is not the same as a cause, and why not all ‘savings’ can be cashed.

Nick O’Shea, Chief Economist, Centre for Mental Health Centre said:

Economic evidence can help policymakers and commissioners to use public money wisely and make decisions that help people and reduce inequalities. But if they are not understood or used poorly they can mislead. Our collaborative with the NHS Confederation Mental Health Network aims to use economic evidence to give clear and good quality information to decision-makers. We want to ensure that funds are invested where they can make the biggest difference.

Sean Duggan, Chief Executive, Mental Health Network NHS Confederation said:

I am very pleased to be supporting this work in collaboration with two fantastic organisations. We know from years of work in this area that there is the need for strong, evidence-based policy recommendations around mental health services. The Mental Health Economics Collaborative provides our members with a mechanism to showcase innovative practice to colleagues within the sector, and beyond, to key health commissioners; a truly fantastic opportunity. Economic theories relevant to public service provision provides the clear, engaging explanations of relevant economic theories needed to apply this evidence to effective care provision. I look forward to seeing its impact upon the sector.

The Mental Health Economics Collaborative also includes the London School of Economics Personal Social Services Research Unit. The Collaborative’s research this year includes an evaluation of four innovative primary mental health care services and an analysis of alternatives to crisis hospital admissions for children and young people.

Download the briefing here