CHAPTER 1 INTRODUCTION The health care system in the United States is in a state of fiscal crisis. Total health care spending is on the rise each year and there is no evidence that this trend will subside. Between 1987 and 2000, health care spending among the noninstitutionalized US population increased by about $199 billion (about 3 percent per year) (Thorpe, Florence, & Joski, 2004). Mental health treatment has been cited as a solution to reducing rising costs in the health care system (Friedman et al., 1995). The cost offset effect occurs when an intervention reduces or prevents usual costs to the health care system. There are many reasons for the rise in health care expenditures, one of which is the rise in the number of individuals with chronic diseases. With the aging of the population, the rise in chronic diseases has seen a dramatic rise in recent years (World Health Organization [WHO], 2006). The majority of this change was attributed to spending for cardiac disease, psychological conditions, pulmonary disorders, cancer, and trauma. In a report by the Agency for Healthcare Research and Quality (AHRQ), the most expensive type of chronic condition in 1997 and 2002 was cardiac conditions and the greatest increase in health care expenditures occurred for pulmonary conditions and psychological conditions (Olin & Rhoades, 2005). The utilization pattern of patients with chronic medical diseases is complicated when patients have comorbid psychological conditions. Due to the ongoing nature of chronic diseases, patients who have one or more chronic diseases tend to be high utilizers of the health care system and thereby expensive to the system. Although cardiac