Equity in managed care for mental disorders.

Equity of mental health care relative to general medical care is a long-standing policy issue in the mental health field, which in recent years has been debated as an issue of parity in insurance benefits. The shift toward managed mental health care makes the parity debate less controversial, because feared cost increases are an unlikely consequence under managed care. We argue, however, that managed care also makes benefit parity less relevant to the goals of achieving fairness in the delivery of mental health services. A broader policy perspective is required to encompass concerns about fairness under managed care.     

A multi-site study of medicaid-funded managed care versus fee-for-service plans' effects on mental health service utilization of children with severe emotional disturbance

Although Medicaid-funded managed care arrangements are commonly used in the delivery of mental health and substance abuse services to low-income children and youth, little is known about the effectiveness of such efforts. This article examines differences in mental health services utilization between children and youth with severe emotional disturbance covered by Medicaid-funded managed care behavioral health plans and those covered by fee-for-service plans. Data are from a federally funded multi-site study. In multivariate analyses controlling for child and caregiver demographic and clinical factors, enrollment in a managed care behavioral health plan was associated with lower inpatient/residential, psychiatric medication, and nontraditional services utilization. No difference was found in outpatient services utilization. Medicaid-funded managed care behavioral health plans appear to reduce use of some types of mental health services, but it is important to address the question of whether low-income children's enrollment in such programs deprives them of needed services.     

Pragmatics of tracking mental health outcomes in a managed care setting

Accountability, cost effectiveness, and continuous quality improvement are essential features of all managed health care systems. However, application of these principles to mental health treatments has lagged behind other health care services. In this article, administrative, practice, and technical issues are addressed through a joint effort between academically based researchers and administrators from two large managed health care organizations. Principles related to the measurement of outcome, instrument selection, and obstacles to the implementation of an ongoing program to assess mental health treatment outcomes are identified. Finally, principles for successfully changing mental health provider behavior toward outcome assessment and the implications of such for mental health delivery systems are discussed.     

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.     

Managed care and mental health: personal realities

A review of the literature revealed mixed reviews on the impact of managed care on mental health service delivery. Research supports that managed care contributes to a reduction in inpatient costs and an increase in outpatient service use. Other studies suggest that there are problems with access and quality of care. An additional issue is whether or not, and to what extent, mental health services are "carved out" from physical health for patients. This study discusses the findings of a qualitative analysis of Medicaid managed care recipients on the barriers and enabling factors to obtaining mental health services in a full carve-out managed care model. Results indicate that reduced access, quality of care problems, and a lack of integration of care exist. Additionally, recipients' interactions with managed care, service providers, and caseworkers affect their mental health care. The results also report on the tactics used by recipients to cope with service problems. Implications for social work practice and research are discussed and recommendations for service delivery and evidence-based education are delineated.     

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.     

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.     

Managed behavioral health care and supply-side economics. 1998 Carl Taube Lecture

BACKGROUND: Within the past decade, the mental health care system in the United States has undergone a significant transformation in terms of delivery, financing and work force configuration. Contracting between managed care organizations (MCOs) and providers has become increasingly prevalent, paralleling the trend in health care in general. These managed care carve-outs in behavioral health depend on networks of providers who agree to capitated rates or discounted fees for service for those patients covered by the carve-out contracts. Moreover, the carve-outs use a broader array of mental health providers than is typically found in traditional indemnity plans, encourage time-limited versus long-term treatments and favor providers who are engaged in outpatient care. This phenomenal growth in managed behavioral health care over the past decade includes the rapid growth and quick consolidation of mental health MCOs. The period 1992-1998 shows steady and substantial annual increases in the number of enrollees in mental health MCOs, the figure more than doubling from 78.1 million people in 1992 to a projected 156.6 million in 1998, or 70% of insured lives. Moreover, these vast numbers of enrollees are becoming increasingly consolidated into a smaller number of firms. In 1997, 12 companies controlled nearly 85% of the managed behavioral health care market, with 60% of the market held by the three largest firms. STUDY AIMS: This article reviews empirical data and draws policy implications from the literature on managed behavioral health care in the United States. Starting with spending and spending trend estimates that show the average annual growth rate of mental health expenditures to be lower than that of health care expenditures in general over the past decade, the author examines utilization and price factors that may account for managed-care-induced cost reductions in behavioral health care, with special attention to hospital use patterns, fee discounting and the supply and earnings patterns of various types of mental health provider. In addition, data on staffing ratios and provider mixes of health maintenance organizations and mental health MCOs are reviewed as they reveal at least part of the dynamics of reconfiguration of the mental health work force in this era of managed care. CONCLUSIONS: As measured by changes in utilization and price, widespread application of "classic" managed care techniques such as preadmission review (gatekeeping), concurrent review, case management, standardized clinical guidelines and protocols, volume purchase of services and fee discounting appears to have led to significant cost reductions for providers of both impatient and outpatient mental health services. However, amidst a complex flux of market variables such as risk shifting, changing financial incentives and intensity of competition, not all of the reduction or slowdown in spending can be clearly and purely attributed to managed care. The data on the ongoing reconfiguration of the mental health work force are clearer in their implications: with an oversupply of all types of mental health providers, managed care has significant potential to increase the incidence of provider substitutions and spur the growth of integrated group practices. IMPLICATIONS FOR FURTHER RESEARCH: The current body of empirical and policy literature in mental health economics suggests several salient areas of follow-up. Is the proportionately greater impact of managed care on the annual growth rate of mental health care spending a temporary phenomenon or does it signal an enduring difference in the rates of increase between behavioral health care and health care in general? Beyond industry downsizing, what are the substitutions among mental health providers that are going on, and will go on, to produce cost-effective practices? What are the new financial or risk-sharing arrangements between providers and MCOs that will produce appropriate and high-quality mental health services?     

Does managed mental health care reallocate resources to those with greater need for services?

Evidence points to the existence of two coexisting inefficiencies in mental health care resource allocation: those with need receive too limited or no care while those with no apparent need receive services. In addition to reducing costs, managed mental health care is expected to reallocate treatment resources to those with greater need for services. However, there are no empirical findings regarding this issue. This study tests whether managed mental health care has had a differential impact by level of need. Data consist of three waves of a community sample with a control group. The study finds that managed care has not succeeded in reallocating resources from the unlikely to the definite needers.     

Benefit limits in managed behavioral health care: Do they matter?

More than half of Americans with insurance coverage for mental health services are enrolled in plans that carve out behavioral health care services with a vendor specializing in the management of these services. However, utilization management has not taken the place of benefit limitations. Do benefit limits matter? This article reports the percentage of enrollees in managed behavioral health care carve-out plans that encounter benefit limits. Estimates are provided on the impact and savings of imposing benefit limits on enrollees in unrestricted plans. Costs to eliminate benefit limits are estimated to be very small. This study finds that benefit limits do matter but only to a very small number of plan enrollees. Furthermore, the results of this study show that for inpatient limits, children are especially vulnerable. These issues have important implications for discussions about the impact of managed care in mental health and for discussions concerning parity legislation.     

The Effect of Medicaid Managed Care on Rural Public Health Departments

Medicaid managed care programs are now operating in more than half of all rural counties in the United States. This study examines how rural health departments that have historically provided clinical services have responded to and been affected by the implementation of Medicaid managed care. To the extent that rural health departments have changed, the effect of this change on the health department and the rural populations that these providers serve is assessed. Site visits were made to four rural public health departments in each of five study states, for a total of 20 case studies. At each site, in-person interviews of county public health department directors were conducted using semistructured interview protocols. In recent years, the majority of health departments decreased or discontinued provision of well-child services, causing many to lose Medicaid revenue. None of the health departments appeared to be in danger of closing, but most lost income security. Medicaid managed care appeared to have increased the number of children with medical homes in the private sector, but adequacy and continuity of care remains an issue. Privatizing Medicaid managed care has not decreased fragmentation, as public health functions such as tracking and screening represent an important facet of comprehensive health services for poor rural populations.     

An economic and clinical rationale for changing utilization review practices for outpatient psychotherapy

The growth of managed care has led to greater cost consciousness in the financing and delivery of mental health and substnace abuse services. The authors examine whether pressures to reduce the costs associated with mental health and substance abuse treatment have led to the overapplication of a popular managed care strategy, utilization review (UR), to the management of outpatient psychotherpay benefits. Several arguments are presented highlighting why changing outpatient psychotherapy UR practices would be in the best economic and clinical interests of all involved parties, including payers, managed care organizatios, (MCOs), mental health consumers, and providers. A number of alternatives to the aggressive management of outpatient psychotherapy benefits are outlined and discussed. The views expressed in this article are those of the authors and do not necessarily represent the positions of their organizations.     

Mental health/medical care cost offsets: opportunities for managed care

Health services researchers have long observed that outpatient mental health treatment sometimes leads to a reduction in unnecessary or excessive general medical care expenditures. Such reductions, or cost offsets, have been found following mental health treatment of distressed elderly medical inpatients, some patients as they develop major medical illnesses, primary care outpatients with multiple unexplained somatic complaints, and nonelderly adults with alcoholism. In this paper we argue that managed care has an opportunity to capture these medical care cost savings by training utilization managers to make mental health services more accessible to patients whose excessive use of medical care is related to psychological factors. For financial reasons, such policies are most likely to develop within health care plans that integrate the financing and management of mental health and medical/surgical benefits.     

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.     

New research alliances in the era of managed care

BACKGROUND: The rise of managed behavioral health care in the United States was accompanied by reductions in costs, which has shifted the policy debate from concerns about rising costs to questions of universal access, mental health benefits at parity with medical benefits and quality of care. To meet these new challenges, managed care organizations, the purchasers of health care and academic services researchers must work together in new ways. AIMS OF THE STUDY: This paper discusses collaborative efforts between a for-profit managed care firm, academia and purchasers of health care coverage to study parity for mental health and substance abuse and how this effort has become part of a research strategy to inform policy. Historical, strategic and methodological issues are presented. METHODS: Case Study. RESULTS: Although the benefits from cooperative research are substantial, there are severe hurdles. Managed care organizations often have data that could answer pressing policy questions, yet these data are rarely used by researchers because it is difficult to obtain access and because analyzing the data requires computing facilities and skills that are not common in health services research. In turn, managed care organizations can learn how to design and implement more informative data systems that eventually lead to more cost-effective care, but there often are more immediately pressing business considerations and sometimes resistance to outside scrutiny. Important features that made this cooperation successful include strong support from the senior management in the company, including complete access to their extensive databases, and established funding for a managed care research center by the National Institute of Mental Health. CONCLUSION: This paper illustrates the potential of collaborative research. New research challenges, such as the linkages between quality and cost-effectiveness in actual practice settings, can only be met successfully if we build alliances among payors, managed care companies and academic researchers.     

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.     

How does risk sharing between employers and a managed behavioral health organization affect mental health care?

OBJECTIVE: To study the ways in which allocating the risk for behavioral health care expenses between employers and a managed behavioral health organization affects costs and the use of services. DATA SOURCES: Claims from 87 plans that cover mental health and substance abuse services covering over one million member years in 1996/1997. STUDY DESIGN: Multi-part regression models for health care cost are used. Dependent variables are health care costs decomposed into access to any care, costs per user, any inpatient use, costs per outpatient user, and costs per inpatient user. The study compares full-risk plans, in which the managed care organization provides managed care services and acts as the insurer by assuming the risk for claims costs, with contracts in which the managed care organization only manages care (for a fixed administrative fee) and the employer retains the risk for claims. PRINCIPAL FINDINGS: Full-risk plans are not statistically significantly different from non-risk plans in terms of any mental health specialty use or hospitalization rates, but costs per user are significantly lower, in particular for inpatients. CONCLUSIONS: Risk contracts do not affect initial access to mental health specialty care or hospitalization rates, but patients in risk contracts have lower costs, either because of lower intensity of care or because they are treated by less expensive providers.     

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.