Privatizing public mental health and substance abuse services: issues, opportunities, and challenges

Much like the medical care system, delivery systems for mental health and substance abuse services are being transformed rapidly by managed care. Public sector systems are now facing challenges to transfer service delivery responsibilities to private managed behavioral health care organizations as a way of containing treatment costs and realizing operational efficiencies. These privatization efforts entail a range of quality management issues that are specific to mental health and substance abuse problems, treatments, and clients.     

Medicaid managed care for mental health services in a rural state

State governments throughout the country increasingly have turned to managed care for their Medicaid programs, including mental health services. We used ethnographic methods and a review of legal documents and state monitoring data to examine the impact of Medicaid reform on mental health services in New Mexico, a rural state. New Mexico implemented Medicaid managed care for both physical and mental health services in 1997. The reform led to administrative burdens, payment problems, and stress and high turnover among providers. Restrictions on inpatient and residential treatment exacerbated access problems for Medicaid recipients. These facts indicate that in rural, medically underserved states, the advantages of managed care for cost control, access, and quality assurance may be diminished. Responding to the crisis in mental health services, the federal government terminated New Mexico's program but later reversed its decision after political changes at the national level. This contradictory response suggests that the federal government's oversight role warrants careful scrutiny by advocacy groups at the local and state levels.     

Negotiating and contracting in a managed care environment: considerations for practitioners.

The world of integrated service provider networks, managed care providers, and preferred provider systems requires clinical social workers to become skilled in business negotiations, with specific attention to contracting for services. This article focuses on the components of negotiating and successfully competing for contracts to gain access to and participate in provider networks for the delivery of mental health services. The authors identify critical elements involved in contracting for services from the perspective of social work practitioners who are now working with or who plan to work with managed care organizations. This pragmatic approach recognizes the controversial nature of social workers' relationship with managed care organizations and the ethical dilemmas that affect both the quality and quantity of client services.     

Distributive justice in medicaid capitation: The evidence from Colorado

In 1995, the state of Colorado began a new funding program for the provision of mental health services to Medicaid recipients. Medicaid funding was restructured from a fee-for-service system into a capitated managed care system. The restructuring altered the way in which mental health resources were allocated within Colorado's mental health system. This article explores the ethical principles inherent in the allocation of mental health resources within Colorado. The allocation system before and after the capitation pilot is analyzed according to three models of distributive justice. Under capitation, access to care corresponds to egalitarian ideals, while service delivery and outcomes follow a more utilitarian philosophy. Results from several empirical studies of the Colorado Medicaid system are used to support this ethical analysis. The analysis leads to the suggestion that the fair-opportunity rule may be a useful principle for developing just distribution systems in other states in the future.     

A global measure of access to mental health services for a managed care environment

The growing influence of managed care in mental health services has raised important questions about access to services. This article introduces and demonstrates a global measure of access that is based on the relationship between service utilization and the need for services. This measure has become practical because of recent advances in measurement technology that provide more valid and reliable estimates of the prevalence of mental illness in general populations and of the number of people who receive mental health services across service sectors. The methodology is used to produce a report card type profile of access to inpatient mental health services (in state, general, private and veterans hospitals) by residents of one state. This global measure can provide a powerful and efficient tool for monitoring and comparing the impact of managed care plans on access to mental health services.     

Medicaid managed care and racial differences in satisfaction and access

Many researchers have suggested that the implementation of managed care may lower access to, and quality of, health care services for minorities. However, very little empirical data examining this issue exists. To examine it, the authors used a study design that was both cross-sectional and longitudinal in that they surveyed Medicaid recipients in two counties at two points in time; one of the counties began delivering services through managed care between the two survey periods. Their results indicate that, overall, managed care had neither a positive nor a negative effect on African Americans' access to health care services in either absolute terms or relative to whites'. In addition, race was not found to be associated with satisfaction. However, a Medicaid recipient's race was found to negatively affect his or her access to service under both managed care and fee-for-service systems.     

Parity for mental health and substance abuse care under managed care

BACKGROUND: Parity in insurance coverage for mental health and substance abuse has been a key goal of mental health and substance abuse care advocates in the United States during most of the past 20 years. The push for parity began during the era of indemnity insurance and fee for service payment when benefit design was the main rationing device in health care. The central economic argument for enacting legislation aimed at regulating the insurance benefit was to address market failure stemming from adverse selection. The case against parity was based on inefficiency related to moral hazard. Empirical analyses provided evidence that ambulatory mental health services were considerably more responsive to the terms of insurance than were ambulatory medical services. AIMS: Our goal in this research is to reexamine the economics of parity in the light of recent changes in the delivery of health care in the United States. Specifically managed care has fundamentally altered the way in which health services are rationed. Benefit design is now only one mechanism among many that are used to allocate health care resources and control costs. We examine the implication of these changes for policies aimed at achieving parity in insurance coverage. METHOD: We develop a theoretical approach to characterizing rationing under managed care. We then analyze the traditional efficiency concerns in insurance, adverse selection and moral hazard in the context of policy aimed at regulating health and mental health benefits under private insurance. RESULTS: We show that since managed care controls costs and utilization in new ways parity in benefit design no longer implies equal access to and quality of mental health and substance abuse care. Because costs are controlled by management under managed care and not primarily by out of pocket prices paid by consumers, demand response recedes as an efficiency argument against parity. At the same time parity in benefit design may accomplish less with respect to providing a remedy to problems related to adverse selection.     

A qualitative study of ethical, medico-legal and clinical governance matters in Australian telehealth services

We examined how Australian telehealth service providers perceived and addressed ethical, medico-legal and clinical governance matters arising from service delivery. Thirty-seven telehealth clinicians and managers were interviewed and a qualitative content analysis was conducted. The services covered six Australian jurisdictions and a range of clinical disciplines. There were 11 medical specialities, surgery, mental health, paediatrics, nursing and allied health. Thirty services (83%) used video consulting and 25 (68%) delivered services to rural areas. Telehealth was reported to be beneficial by reducing adverse events, improving health outcomes, offering increased patient choice of service delivery, and improving access to services for rural areas and home care. There were observations of gains or no change in patient-provider rapport compared to face-to-face communication, with some patients reportedly preferring video. Those interviewed reported some problems with privacy and security, and variable informed consent practices. No examples of malpractice were raised, although there was a common misperception that distant providers were not responsible for clinical care. With respect to clinical governance, telehealth was seen as enabling improved quality, integration and implementation of evidence-based care, and to be a major support for the rural health workforce. Although there were potential ethical, medico-legal and governance problems in Australian telehealth services, these had been easily managed in practice.     

Managed care: a critical review.

Widely perceived and accepted as the simplest way to control escalating health care costs, managed care is the way health care is now, and will continue to be, delivered in the foreseeable future. Growing numbers of Medicaid beneficiaries are required to participate in managed health care and Medicare beneficiaries are strongly encouraged to do so. In essence, America's poor and elderly are serving as the vanguard for health care reform. This article describes the evolution of managed care in the United States, then examines the implications of the transfer of financial risk to health care providers; the impact of managed care on existing inequalities in access to health care and services; the quality of managed care compared with fee-for-service arrangements; and the delivery of mental health services under managed care. We suggest that the role of the social work profession in managed care should be to mitigate the costs borne by clients, and offer specific suggestions for advocates in this arena.     

Considerations in predicting mental health care use: Implications for managed care plans

Managed care plans and other health care providers face a difficult task in predicting outpatient mental health services use. Existing research offers some guidance, but our knowledge of which factors influence use is confounded by methodological problems and sampling constraints. Consequently, available findings are insufficient for developing accurate predictions, which managed care plans need in order to formulate fiscally responsible service delivery contracts. This article reviews the primary data sources and research on ambulatory mental health services. On the basis of this review, the probability and intensity of outpatient visits are estimated. The primary predictors of use are also examined because they may help managed care plans forecast use by a given population or group of enrollees. Gender, age, race, education, health status, and insurance coverage are several variables surfacing as statistically significant predictors of use. The implications for planning capitated mental health services are discussed.     

Implementation of medicaid managed mental health care in Iowa: Problems and solutions

Under the terms of a 1915(b) waiver, Iowa implemented a statewide carve-out program in 1995 for the management of mental health services for Medicaid recipients by contracting with a private for-profit corporation. In this commentary, the strategy used to develop the Medicaid managed care contract in Iowa is briefly summarized. Problems that were encountered in program implementation and regulatory attempts to address those issues are described. Suggestions for other states regarding the development, implementation, and oversight of contracts for managed care so that they might be able to deliver comprehensive mental health care services with acceptable standards of care quality are offered. By including appropriate contract specifications, providing mechanisms for oversight, and enforcing standards of care in Medicaid managed care contracts, many problems that occurred in Iowa may have been minimized or avoided. This experience can provide a valuable lesson for similar program initiatives in other states.     

Older people's mental health in rural areas: Converting policy into service development,service access and a sustainable workforce

This paper describes the older people's mental health workforce development, policy development and implementation process and quantifies the rural service delivery and access impacts over a 15‐year period in New South Wales. It highlights the factors that are considered to be critical to successful rural service development such as commitment to funding parity, investment in strong local service leadership, and development of innovative, locally adapted rural service models. Building on these foundations, the Older People's Mental Health Program in New South Wales was able to address key challenges relating to service access in rural health and develop new, sustainable specialist older people's mental health service networks. A sustained focus on policy and implementation which explicitly supports rural older people's mental health service enhancement, and development of evidence‐based models of care, has significantly improved access to specialist mental health care for older people in rural areas. It has delivered 23 new rural older people's mental health community teams and a 440% increase in the number of people accessing these teams. It has also doubled the number of acute inpatient units and established new specialist mental health‐residential aged care partnership services in rural New South Wales. It has resulted in increased access to services for the “older old,” while not diminishing older people's rates of access to general adult mental health services. It has also supported innovative, sustainable rural service models such as “hub and spoke” models and step‐up step‐down inpatient services that build on existing health and hospital infrastructure and link geographically dispersed specialist clinicians and services together in rural service delivery.     

Eliminating The Wait For Mental Health Services

Timely access to mental health services is critical to successful treatment of adults with severe and persistent mental illness, and timeliness is a key quality indicator in calls for improvement to the health care system. Waiting weeks for a psychiatric appointment results in increased psychiatric hospitalizations, decompensation, and risk for suicide. However, many community mental health administrators assume that waiting lists for services are inevitable given the high demand for services. The present study evaluates the successful efforts of a large urban community mental health center to eliminate the wait for psychiatric services in an adult outpatient setting. Through systematic changes in the service delivery system, the wait time for a psychiatric appointment was reduced from 13 days to 0 days, and the no-show rate dropped from 52 to 18%. Furthermore, these changes were associated with reduced psychiatric hospitalizations and improved staff morale and teamwork. The change processes implemented can be successfully applied to other systems problems confronting mental health agencies.     

Financing mental health services in low- and middle-income countries

Mental disorders account for a significant and growing proportion of the global burden of disease and yet remain a low priority for public financing in health systems globally. In many low-income countries, formal mental health services are paid for directly by patients out-of-pocket and in middle-income countries undergoing transition there has been a decline in coverage. The paper explores the impact of health care financing arrangements on the efficient and equitable utilization of mental health services. Through a review of the literature and a number of country case studies, the paper examines the impact of financing mental health services from out-of-pocket payments, private health insurance, social health insurance and taxation. The implications for the development of financing systems in low- and middle-income countries are discussed. International evidence suggests that charging patients for mental health services results in levels of use which are below socially efficient levels as the benefits of the services are distributed according to ability to pay, resulting in inequitable access to care. Private health insurance poses three main problems for mental health service users: exclusion of mental health benefits, limited access to those without employment and refusal to insure pre-existing conditions. Social health insurance may offer protection to those with mental health problems. However, in many low- and middle-income countries, eligibility is based on contributions and limited to those in formal employment (therefore excluding many with mental health problems). Tax-funded systems provide universal coverage in theory. However, the quality and distribution of publicly financed health care services makes access difficult in practice, particularly for rural poor communities.     

Cost of employee assistance programs: Comparison of national estimates from 1993 and 1995

The cost and financing of mental health services is gaining increasing importance with the spread of managed care and cost-cutting measures throughout the health care system. The delivery of mental health services through structured employee assistance programs (EAPs) could be undermined by revised health insurance contracts and cutbacks in employer-provided benefits at the workplace. This study uses two recently completed national surveys of EAPs to estimate the costs of providing EAP services during 1993 and 1995. EAP costs are determined by program type, worksite size, industry, and region. In addition, information on program services is reported to determine the most common types and categories of services and whether service delivery changes have occurred between 1993 and 1995. The results of this study will be useful to EAP managers, mental health administrators, and mental health services researchers who are interested in the delivery and costs of EAP services.     

State substance abuse and mental health managed care evaluation program

The articles in this special section of the Journal of Behavioral Health Services & Research (30:1) present results from evaluations of publicly funded managed care initiatives for substance abuse and mental health treatment in Arizona, Iowa, Maryland, and Nebraska. This overview outlines the four managed care programs and summarizes the results from the studies. The evaluations used administrative data and suggest a continuing challenge to structure plans so that undesired deleterious effects associated with adverse selection are minimized. Successful plans balanced risk with limited revenues so that they permitted greater access to less intensive services. Shifts from inpatient services to outpatient care were noted in most states. Future evaluations might conduct patient interviews to examine the effectiveness and quality of services for mental health and substance abuse problems more closely.     

What happens when capitated behavioral health comes to town? The transition from the fort bragg demonstration to a capitated managed behavioral health contract

Capitated managed care contracts for behavioral health services are becoming more prevalent across the country in both public and private sectors. This study followed the transition from a demonstration project for child mental health services to a capitated managed behavioral health care contract with a for-profit managed care company. The focus of the study was on the impact—at both the service system and the individual consumer level—pertaining to the start-up and maintenance of a capitated managed behavioral health program. A case study using multiple methods and multiple sources of information incorporated a program fidelity framework that examined micro to macro levels of program implementation. The findings of this study include the following: access to services decreased, the lengths of stay and average daily census in the more intensive levels of treatment declined, difficult-to-treat children were shifted to the public sector, and ratings of service system performance and coordination fell.     

Occupational therapy in mental health: challenges and opportunities

The National Mental Health Policy and National Mental Health Plan published in 1992 provided directions for the reform of mental health services in Australia. They stated that mental health services should be part of the mainstream health system and that integrated mental health programmes should be developed to cover the full range of specialist mental health services, focusing on improved quality of service, the consumers, equity of access, continuity of care and redistribution of resources. The Queensland Mental Health Plan published in 1994 set out specific objectives and strategies for implementing mental health service reform in Queensland. In Queensland there has been a concentration on developing core mental health services involving the reorientation of service delivery from institutions to the community, based on the principles of integration, mainstreaming and regional self-sufficiency. Major restructuring of mental health services is taking place, which has meant changes in service development, organizational structures and work practices. There has been a significant impact on the roles and skills required by the mental health workforce in the context of today's mental health services climate. There is a focus on staff providing individualized assessment and continuing treatment using a case management approach, within a continuum of care. Implications for occupational therapists include developing a generic skill base in preparation for broad-spectrum mental health professional roles while maintaining their professional identity. It is recommended that research be conducted to examine the capacity of occupational therapists to adapt to the changing mental health environment. Copyright © 1999 Whurr Publishers Ltd.