In the United States, most medical is rendered on a fee-for-service basis. The more often you come in, the more money I make (at least from you). In theory, it motivates doctors to recommend more services, and it motivates insurance companies to bargain for very low payments and to deny services. Another form of payment is what the HMO's do -- a population is defined and a medical system is given a certain amount of money is divided to provide treatment for those patients. This form of reimbursement gives doctors the ability to divide the money pot in such a way that the neediest get the most, but it also encourages doctors to offer less care to any given patient. In such a system, doctors are generally rewarded if there is money left over and penalized if they go over the budget. Incentives may be put in place to encourage good outcomes.
Mental health treatments are often different from other forms of care in that the medications can be very expensive (okay, there are other expensive medicines that run circles around us, but as frequently-used meds go, Cymbalta and Abilify are money drains) and psychotherapy is a time intensive treatment where there are no absolute standards that determine who comes twice a week versus who comes twice a year. Capitated systems don't typically (?ever) pay for psychotherapy by a psychiatrist -- the kind of work I do -- and they don't typically allow for on-going weekly psychotherapy sessions, unless it's felt this is absolutely necessary to prevent a more costly hospitalization.
What system are you covered under? What do you think works best and why? Obviously, I interested in hearing from our readers outside the United States.