Behavioral health care spending makes up a minority of total health care spending in the USA. According to the Substance Abuse and Mental Health Services Administration (Mark et al., 2007), national expenditures for the treatment of mental health ($100 billion) and substance abuse ($21 billion) amounted to $121 billion in 2003 accounting for only 7.5 % of the total health care expenditures. Broken down further, mental health expenditures account for 6.2 % of total health care expenditures and substance abuse spending accounts for 1.3 %.

The allocation of mental health spending has shifted over the last three decades. The trend of decreased inpatient services continued with inpatient expenditures dropping from 36 % of total mental health spending to only 24 % between 1993 and 2003 (Mark et al., 2007). The decrease in spending on inpatient services was picked up by prescription drug purchases, which increased from 8 % of total mental health spending to 23 % during the same time period (for a breakdown of mental health spending see Fig. 3). In 2003, close to 1 in 4 dollars spent on mental health services was spent on prescription medications (Mark et al., 2007). The rapid rise in the prescription of psychotropic medications has been well documented (Olfson, Marcus, Druss, & Pincus, 2002; Zuvekas, 2003). In an analysis of results from the Medical Expenditure Panel Survey, Zuvekas (2005) found that an increasing number of individuals take prescription medications without an accompanying visit to a mental health professional (40 % in 1996 and 45 % in 2001). The sharp increase in out-of-pocket spending on mental health seen between 1998 and 2003 may have largely been the result of increased spending on prescription medications. It is important for psychologist to realize that the major competitor in the marketplace—with an increasing share of the market—is the physician (most often a primary care doctor) with a prescription pad.

Individuals with mental health disorders rely on public sources of spending to a greater extent than people with other chronic diseases (Mark, et al., 2007). Public sources of funding account for 58 % of total mental health spending, while only 45 % of total health care spending comes from public sources. The largest portion of mental health expenditures is covered by state and local funding while private insurance accounts for only 4.0 %. The full economic costs of mental illness are not captured by the above breakdown of expenditures. Indirect costs such as reduced labor supply, public income support payments, high rates of homelessness among the seriously mentally ill (SMI), and incarceration often overshadow other indirect costs such as the high rates of medical complications, the high prevalence of pulmonary disease (individuals with mental illness smoke 44 % of all cigarettes in the USA), and early mortality (Colton & Manderscheid, 2006; Insel, 2008). While exact figures of indirect costs are difficult to quantify, a recent analysis by Kessler et al. (2008) estimated that serious mental illness is associated with an annual loss of earnings totaling $193.2 billion (Fig. 4).

Advances in medical care and prevention efforts have resulted in an epidemiological shift in the leading cause of death from infectious disease and acute illness to chronic disease, defined by the Centers for Disease Control and Prevention as noncommunicable illnesses that are prolonged in duration, do not resolve spontaneously, and are rarely cured completely (2009; CDC, 2003). Currently, 7 of 10 deaths in the USA are caused by chronic disease (CDC, 2009). Nearly half of all Americans (133 million) suffer from one or more chronic disease and a quarter of those who do experience significant limitations in daily activities (CDC, 2009). The increase in the prevalence of chronic diseases has spread across the lifespan with chronic diseases affecting 1.8 % of children and adolescents in the 1960s to more than 7 % in 2004 (CDC, 2009). Recent analysis reveals that the seven most common chronic diseases (cancer, diabetes, hypertension, stroke, heart disease, pulmonary conditions, and mental disorders) cost the economy more than $1 trillion annually in 2003 (see Fig. 5, DeVol & Bedroussian, 2007). Currently, more than 75 % of health care costs are due to chronic conditions (CDC, 2009). Costs go beyond health care expenditures for each chronic disease and capture a host of indirect costs including sick days, low performance rates, output loss, and losses incurred by the caregiver, such as finances (DeVol & Bedroussian, 2007). The costs to the economy are projected to continue to grow and may reach close to $6 trillion by 2050 (DeVol & Bedroussian, 2007). An analysis of the modifiable behavioral risk factors that can lead to the nation’s leading chronic diseases found that close to 35 % of US deaths in 2000 were due to tobacco use, poor diet, and physical inactivity (Mokdad, Marks, Stroup, & Gerberding, 2004). In an examination of the effects of obesity, smoking, and drinking on medical problems and costs, Strum (2002) found that obesity far outranks the negative effects of drinking and smoking. Obesity was associated with a 36 % increase in outpatient and inpatient spending and a 77 % increase in medications while current smokers were associated with a 21 % increase in inpatient and outpatient spending and a 28 % increase in medications and even smaller effects for problem drinkers (Strum, 2002). Obesity has become an epidemic among children and adolescents (O’Donohue, Moore, & Scott, 2009) (Fig. 6).

A review of the literature reveals that individuals with mental illnesses tend to be high utilizers of medical care, as they routinely present to their primary care physicians with a high number of comorbid illnesses and incur longer hospital stays (Chiles, Lambert, & Hatch, 1999). Schizophrenia in particular is associated with substantial direct and indirect costs in excess of those incurred by matched controls (Wu et al., 2005). Wu et al. (2005) found that the overall cost of schizophrenia in the USA in 2002 was estimated to be $62.7 billion with $22.7 billion in direct health care costs. Treatment for comorbidity has been found to add 20–90 % to the annual spending among patients with schizophrenia (McDonald, Hertz, Lustik, & Unger, 2005).

Comorbid depression has been associated with higher health-care costs for patients with chronic medical disorders such as diabetes mellitus (Ciechanowski, Katon, & Russo, 2000; Gilmer et al., 2005) and congestive heart failure (Sullivan et al., 2005). In a population-based cross-sectional survey of 130,880 Canadians, Stein et al. (2006) found that the presence of comorbid major depressive disorder and a chronic physical illness was associated with approximately double the likelihood of health care utilization, increased functional disability, and work absence compared to a chronic physical illness without the comorbid depression. The increase in health care costs is particularly notable in older adults with comorbid depression (Himelhoch et al., 2004; Katon, 2003). In recent analysis of health care costs for close to 15,000 Medicare recipients with diabetes and/or congestive heart failure found that individuals with depression had significantly higher total health care costs over a 12-month period than those without depression ($20,046 vs. $11,956) (Unutzer et al., 2009). Interestingly, depressed individuals had higher health care costs across all cost categories except specialty mental health services, which accounted for less than 1 % of total costs.

A possible driver of increased costs for individuals with chronic disease and comorbid depression is the higher rates of adverse health-risk behaviors that depressed individuals have been shown to experience, such as smoking, maintaining a high-fat diet, sedentariness, drinking, and obesity (Goodman & Whitaker, 2002; Rosal et al., 2001). A meta-analysis of the effects of anxiety and depression on patient treatment adherence found that depressed individuals are three times more likely to be noncompliant with medical treatment recommendations than nondepressed patients (DiMatteo Lepper, & Croghan, 2000). The relationship between anxiety disorders and comorbid medical illnesses is less well studied, but Roy-Byrne et al. (2008) argue that anxiety and anxiety disorders may have as great a negative impact on physical illness as depression does. In a review of the literature, the authors found that anxiety disorders amplify symptoms of some medical illnesses and appear to worsen outcomes. Thus, it has increasingly become recognized that some of the key drivers of health care expenditures are behavioral: poor diet, insufficient exercise, smoking, poor treatment adherence, anxiety, and depression. These are factors that psychologists have something to offer.

As aforementioned, chronic disease is now the leading cause of death and the origin of lifestyle choices that increase the likelihood of developing chronic disease often begins in adolescence (O’Donohue & Tolle, 2009). Obesity, diabetes, and smoking are of particular concern during this developmental phase.

The incidence of youth obesity is rising sharply and has significant health implications. It is reported that 18 % of adolescents in the United States are overweight, a number that has more than tripled from 1980 to 2008 (Centers for Disease Control, 2011a, 2011b). Obesity at this age has both immediate and long-term health effects. Of those adolescents who were considered obese, 70 % had at least one risk factor for cardiovascular disease (Li, Ford, Zhao, & Mokdad, 2009, as cited by Centers for Disease Control, 2011a, 2011b). Obese adolescents are also more likely to suffer from prediabetes, bone and joint problems, and social and psychological problems (Li, Ford, Zhao, & Mokdad, 2009 as cited by Centers for Disease Control, 2011a, 2011b). Also, obese adolescents are more likely to be considered obese as adults, which is associated with health problems such as certain types of cancer, heart disease, diabetes, stroke, and osteoarthritis (Centers for Disease Control, 2011a, 2011b).

Related to the problem of obesity, the prevalence of type 2 diabetes has increased dramatically in the recent years and in most studies all youth diagnosed with type 2 diabetes were also obese (Delamater, Jacquez, & Patino-Fernandez, 2009). In the United States, approximately 176,500 individuals under the age of 20 years have diabetes (LaGreca & Mackey, 2009). Prior to the mid-1990s, only 1–2 % of children met the criteria for type 2 diabetes and in the recent years the incidence has increased to 8–45 % of youth. In addition, 1 out of every 400–600 children has type 1 diabetes. The annual cost for diabetes management is determined to be $174 billion (LaGreca & Mackey, 2009). Diabetes is a lifelong chronic illness that requires management across the lifespan and is often diagnosed in adolescence (O’Donohue & Tolle, 2009).

In 2009, 25.6 % of high school students and 9.5 % of middle school students reported using tobacco products (Centers for Disease Control, 2011a, 2011b). While these numbers are steadily declining (34.5 % of high school students and 15.1 % of middle school students reported using tobacco products in 2000), there are still many health implications associated with smoking. Those adolescents that do smoke are more likely to engage in high-risk sexual behavior and use alcohol and other illicit drugs (Centers for Disease Control 2012). Adolescents that begin smoking will likely continue to smoke regularly throughout their adulthood (WHO, 2012). Smoking is associated with short-term health consequences that include respiratory problems, decreased lung functioning, and addiction to nicotine. Long-term effects include increase risk of heart disease, stroke, and certain forms of cancer (WHO, 2012).

Individuals with mental illnesses tend to be high utilizers of medical care and comorbid conditions in adolescence, such as depression, can have lifelong health implications. In 2009, about 8 % of adolescents suffered at least one major depressive episode over the course of 1 year (Childstats.gov 2011). Rates of depressive disorders peak in mid-adolescence, particularly in females (Street & Garber, 2009). Of those adolescents that experienced a major depressive episode only 35 % received some kind of treatment, either talking to a medical or mental health professional about their problem and/or taking prescription medications (Childstats.gov 2011). Not only does depression affect school and social relationships, but it also exacerbates health conditions such as obesity, asthma, migraine headaches, and allergies (Street & Garber, 2009). Adolescences that experience depression are more likely to engage in alcohol and drug use and are more likely to smoke on a daily basis Childstats.gov 2011. Additionally, depressive symptoms in adolescence have been shown to predict not only the likelihood of recurrent depressive episodes in adult life but also the onset of subsequent clinical disorders (Street & Garber, 2009). Depression can also increase the risk for other medical problems through the occurrence of sleep problems, lack of exercise, and poor eating habits (Street & Garber, 2009).

Although the United States spends more on health care than other industrialized nations nearly 46 million individuals living in the USA do not have health insurance (Carey, Herring & Lenain, 2009). The number of uninsured individuals has increased significantly in the last decade, from 38 million (14 % of the population) in 2000 to 46 million (16 % of the population) in 2007 (Carey et al., 2009). The uninsured are a heterogeneous group, including about 10 million illegal immigrants (Gruber, 2008). The increase in the uninsured is due in part to a decline in the percent of employees with employer-sponsored insurance (80.4 % in 2000–2001 to 75.7 % in 2007 (Cunningham, Artiga, & Schwartz, 2008). The largest declines (53.0–40.8 %) have been seen among low-income employees, whose family incomes are less than 200 % of poverty. Employers, particularly small businesses, have struggled to provide health insurance as a benefit due to the increases in employers’ health care costs (up to 7.3 % in 2009; Thomson Reuters, 2010).

The recently signed Patient Protection and Affordable Care Act (H.R. 3590) is focused on decreasing the number of uninsured by expanding coverage for 32 million Americans. The legislation will establish among other things a mandate for most Americans to obtain health insurance, significantly expand eligibility for Medicaid, set up insurance exchanges through which individuals can receive federal subsidies to reduce the cost of purchasing coverage, substantially reduce the growth of Medicare’s payment rates for most services, and impose an excise tax on insurance plans with high premiums (Congressional Budget Office, 2010). As detailed above, the health care reform legislature will increase the government’s role in providing health to its citizens. An analysis of the bill by the Congressional Budget Office (2010) found that health care costs will be lowered over time although this point continues to be debated.

Due to the high rate of uninsured children and adolescence and the poor quality of care associated with being uninsured the Children’s Health Insurance Program (CHIP) was enacted by Congress in 1997 to provide insurance for children and improve access to care for low-income families (Szilagyi, et al., 2004). Originally, Congress had set aside 40 billion dollars to provide states with grants to create and provide their own CHIP. However, due to budget cuts some of this original money was taken away, and in 2007, former President George W. Bush vetoed two bills to renew and expand CHIP. Due to these vetoes Congress passed a bill that extended the fund of CHIP until 2009, but fell far short of the original two bills to expand the program. In 2009, Congress passed another bill to renew and expand CHIP that was signed by President Barack Obama.

Though it has had a turbulent finically and political history, CHIP has proved to be beneficial for adolescents. One third of the individuals enrolled in CHIP are adolescences (Klein, Shone, Szilagyi, Bajorska, & Wilson, 2007). The program has been effective in reducing the amount of uninsured adolescents from 15.2 to 12.2 % since its inception (Newacheck, Park, Brindis, Biehl, & Irwin, 2004). Through CHIP, adolescences have improved access, continuity, and quality of care and this care is delivered within the usual primary care source (Szilagyi, et al., 2004). Those who have CHIP use more preventative care and have fewer unmet medical needs (Klein et al., 2007). Also, enrollment in CHIP also is associated with eliminating racial disparities in access to medical services (Klein et al., 2007).

While some improvements have been made through programs like CHIP, there is still much progress to be made. Adolescents’ access to health care is among the worst of all age groups, and relatively few interventions have shown to be effective in improving their access to care (Klein et al., 2007, p. 891). Adolescents that would qualify for programs like CHIP make up for one third of the total adolescent population but account for two thirds of the uninsured population (Newacheck et al., 2004). Since health and health behaviors are of utmost importance for this age group, it is important that we continue to target and improve access to care for these individuals.

The American Psychological Association’s Public Interest Government Relations Office (2010) reviewed the 2,400 pages of the Patient Protection and Affordable Care Act and found numerous legislative provisions that are favorable for the field of psychology. The provisions sited focused on increasing integrated health care and mental and behavioral health parity, enhancing prevention and wellness, developing the psychology workforce, elimination of health disparities support for psychological research, and increasing involvement with consumers, families, and caregivers (APA, 2010). Table 1 highlights several key provisions.