way that they cover physical illness, and no more than 7 percent cover outpatient expenses in a manner similar to coverage of outpatient medical costs.30 In November 1989, Congress took a large step toward removing discrimination in the treatment of psychiatric disorders by eliminating a long-standing limitation on the total annual payment for mental health services. The other limitations, however, persist.

Even attempts to improve coverage for psychiatric disorders may misfire. The Omnibus Budget Reconciliation Act (OBRA) of 1987 required that all patients applying for admission to nursing homes be screened for mental disorders. The goal of this regulation was to provide appropriate care for these patients, but the result has too often been the opposite—preventing access to nursing home care for patients found to be in need of "active psychiatric treatment."

These discriminatory reimbursement practices severely limit the use of psychiatric services in hospitals, nursing homes, and ambulatory settings. The inadequacy of psychiatric services in nursing homes is particularly egregious. Furthermore, current practices lead to a serious imbalance in the type of site at which services are rendered, with expensive inpatient treatment being favored over more economical outpatient services. The limitation of support for outpatient care of psychiatric disorders, with its potential for the cost savings conferred by avoidance of hospitalization, is particularly short-sighted. Such discrimination also reinforces the disinclination of primary care physicians to make psychiatric diagnoses and encourages their often fruitless treatment of depressive symptoms while ignoring the root disorder. Finally, inadequate reimbursement seriously limits the availability of psychiatrists skilled in geriatrics.


Research advances promise major improvements in treatment of depression in the elderly. Attempts to predict the future direction of such treatment, however, are fraught with difficulty because the most important developments in treatment are likely to occur not in targeted areas but from unanticipated consequences of basic research. The prospects of unanticipated consequences of research on depression are good, and they are getting better.

Studies of Alzheimer's disease have already established a genetic basis for some instances of that disorder and have begun to elucidate patterns of transmission. The rapid development of molecular genetics gives hope that one day the genetic basis of Alzheimer's disease will be understood and an effective therapy will be available. Another

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