Psychiatrists aren’t fulfilling the social contract that subsidized their training

There has been much handwringing about how difficult it is for Americans with mental health issues to see a psychiatrist. Failures in the health insurance market are often blamed for the problem. As a new class of psychiatry residents begins work in hospitals across the country this week, I see an additional cause: the lack of commitment to honor the subsidies that made it possible for psychiatrists to enter the profession.

In the apparent zeal of public and private insurers to control costs and avoid attracting enrollees with mental illness — who are more costly to care for — they have designed their networks, established fee schedules, and created administrative barriers to make services by psychiatrists paid for by insurance unappealing to psychiatrists and less remunerative than serving cash payers.

Here’s the rub: Psychiatrists in training receive billions of dollars in public subsidies that provide extensive support for residency programs across the country. This is done to ensure there are well-trained mental health professionals serving the public interest. The subsidies also aim to ensure that Medicare beneficiaries have access to high-quality physicians.

Participation in Medicare-subsidized residency programs is central to the social contract that subsidizes psychiatrists’ training. The American Psychiatric Association says in its statement on ethics that these professionals have an obligation to “participate in activities that improve public health and the community.”

Yet this social contract has broken down, and psychiatrists have taken to print to explain their distaste for working with insurers. Take, for example, this essay in STAT, in which a community-minded psychiatrist laid out the burdens of dealing with insurers that pay for mental health care: “Filling out the forms became like defusing a bomb — be exceedingly careful about which wires to cut and which wires to leave alone, and maybe, just maybe, I’d receive payment a couple of months later.”

Likewise, Mental Health America, a patient advocacy association, has decried low payment rates by noting, “A psychiatrist could make more than double from seeing a patient and billing them directly rather than taking Medicare, and make three times as much compared to Medicaid.”

Complaints like these have had stark results on access to psychiatrists in the real world. While more than 90% of psychiatrists accept new patients, only about 60% of them accept new Medicare patients, and just 43% accept new Medicaid patients, according to data from the National Ambulatory Medical Care Survey and KFF. Similarly, somewhere between 55% and 65% of psychiatrists accept new patients with private insurance.

The training of virtually every practicing psychiatrist over the last 30 years was subsidized by Medicare and Medicaid. Payment rates to teaching programs ranged from nearly $106,000 to $182,000 per resident per year in 2015, a number that has surely increased since then. Over a typical four-year residency in psychiatry, then, a psychiatrist will have received subsidies of between $424,000 and $728,000. In addition, states spent an additional $7.3 billion on graduate medical education through Medicaid from 2015 to 2018.

Failing to actively participate in public programs like Medicare and Medicaid, which supported their training, violates the implied contract that physicians-in-training agreed to. While health insurance certainly needs reforms, attention must also be given to the social contract between psychiatrists and the public that subsidized their training. The two don’t need to be mutually exclusive. Instead, reforms to insurer practices and professional conduct requirements should be pursued simultaneously.

The distorted supply of psychiatrists across payment plans is not just a case of psychiatrists being victimized by market failures. It’s also an imbalance between the support psychiatrists are given during their education and the support they give back once they start practicing. It is time for them to recognize the social contract that brought them to their profession.

Richard G. Frank is the director of the Brookings Institution’s Center on Health Policy.