Seven principles of healthcare reform. American Managed Behavioral Healthcare Association

The American Managed Behavioral Healthcare Association (AMBHA), is comprised of 15 of the country's leading managed behavioral healthcare companies. In January of 1994, AMBHA issued the following statement of "Principles of Healthcare Reform," as well as proposing an alternative basic benefit package for mental illness and substance abuse coverage under managed care. These documents represent an important effort in defining and describing appropriate behavioral healthcare coverage within the larger national debate on healthcare reform. Please also see the report on the cost impact of managed behavioral healthcare, prepared by AMBHA's Actuarial Subcommittee, on page 18 of this issue of Behavioral Healthcare Tomorrow.     

Behavioral healthcare report card indicators: AMBHA (American Managed Behavioral Healthcare Association) begins to define standards for accountability

AMBHA--The American Managed Behavioral Healthcare Association--was formed by a number of the country's leading national behavioral health managed care firms in order to influence the national reform debate and document the cost effectiveness of managed care techniques in this setting. Recently, AMBHA undertook the challenge of setting standardized quality assessment measures and methods and related benchmarks. The author describes the association's beginning efforts to develop a behavioral healthcare "report card" addressing basic elements of access, client satisfaction, quality and outcomes.     

Quality & access in the managed behavioral healthcare industry

Building on a study of the costs of behavioral healthcare under managed care first released in the March/April, 1994 issue of this journal, the American Managed Behavioral Healthcare Association has now turned its attention to two other fundamental issues in healthcare reform: access and quality. The following study presents data indicating how managed behavioral healthcare plans assure quality and access in such areas as response time, accreditation, provider credentialing, patient satisfaction and outcomes measurement.     

Time to Take a Breath

With health care reform the law of the land, we must be ready to compete on a new playing field where increasing numbers of individuals will have healthcare insurance benefits. Our job is to ensure that their new benefits result in access to effective behavioral health services. The National Council for Community Behavioral Healthcare has led breathtaking initiatives to make access to care more timely, to create structures for collaborative care for shared patients, to enhance the knowledge, skills, and abilities of psychiatrists who are medical directors in community behavioral health centers, and to combat stigma, educate key audiences, and improve awareness of treatment options for individuals with mental illnesses.     

Managing the financial challenges of public-private collaboration

With the growing emphasis on Medicaid managed care waivers as a method for states to constrain healthcare cost overruns (see also State Policy Review on page 63), new and creative pricing techniques for carve-out and carve-in programs will be a key to their success. The author builds on his experience in developing a Medicaid behavioral healthcare carve-out in Massachusetts to illustrate some basic principles in the pricing and management of such public-private collaborations. These collaborative systems should be based on specific actuarial models, plans for enhanced access to services and the need to change incrementally in the context of the political process.     

Does managing behavioral health care services increase the cost of providing medical care?

This study examined the possibility that managing behavioral health care services achieves savings by cost shifting—by denying care or impeding access to care—and in that way encouraging patients to seek needed behavioral health care in the medical care system. In 1993, a large industrial company carved out employee behavioral health care from its unmanaged, indemnity medical care benefits and offered employees an enhanced benefit package through a managed behavioral health care company. This study compared the use and cost of behavioral health care and medical care services for two years before the carve-out and for three years afterward. The rate of behavioral health care usage remained the same or increased after the carve-out, while the cost of providing the care decreased. Controlling for trends that began before the inception of managed behavioral health, medical care costs decreased for those using behavioral health care services. No evidence supporting cost shifting was found.     

The costs of mental health parity: still an impediment?

Parity in mental health benefits rectifies unfairness in health insurance coverage and reduces financial risk for those with mental illness. However, increased coverage for mental illness has been seen as creating inefficiencies and increasing total spending, based largely on results from the RAND Health Insurance Experiment conducted in the 1970s. Newer evidence suggests that cost control techniques associated with managed care give health plans alternatives to discriminatory coverage for containing costs. We review both eras of research on mental health insurance and conclude that comprehensive parity implemented in the context of managed care would have little impact on total spending.     

Managed behavioral health care: an instrument to characterize critical elements of public sector programs

OBJECTIVE: To develop an instrument to characterize public sector managed behavioral health care arrangements to capture key differences between managed and "unmanaged" care and among managed care arrangements. STUDY DESIGN: The instrument was developed by a multi-institutional group of collaborators with participation of an expert panel. Included are six domains predicted to have an impact on access, service utilization, costs, and quality. The domains are: characteristics of the managed care plan, enrolled population, benefit design, payment and risk arrangements, composition of provider networks, and accountability. Data are collected at three levels: managed care organization, subcontractor, and network of service providers. DATA COLLECTION METHODS: Data are collected through contract abstraction and key informant interviews. A multilevel coding scheme is used to organize the data into a matrix along key domains, which is then reviewed and verified by the key informants. PRINCIPAL FINDINGS: This instrument can usefully differentiate between and among Medicaid fee-for-service programs and Medicaid managed care plans along key domains of interest. Beyond documenting basic features of the plans and providing contextual information, these data will support the refinement and testing of hypotheses about the impact of public sector managed care on access, quality, costs, and outcomes of care. CONCLUSIONS: If managed behavioral health care research is to advance beyond simple case study comparisons, a well-conceptualized set of instruments is necessary.     

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.     

Mental health and substance abuse parity: a case study of Ohio's state employee program

BACKGROUND: In the United States, insurance benefits for treating alcohol, drug abuse and mental health (ADM) problems have been much more limited than medical care benefits. To change that situation, more than 30 states were considering legislation that requires equal benefits for ADM and medical care ("parity") in the past year. Uncertainty about the cost consequences of such proposed legislation remains a major stumbling block. There has been no information about the actual experience of implementing parity benefits under managed care or the effects on access to care and utilization. AIMS OF THE STUDY: Document the experience of the State of Ohio with adopting full parity for ADM care for its state employee program under managed care. Ohio provides an unusually long time series with seven years of managed behavioral health benefits, which allows us to study inflationary trends in a plan with unlimited ADM benefits. METHODS: Primarily a case study, we describe the implementation of the program and track utilization, and costs of ADM care from 1989 to 1997. We use a variety of administrative and claims data and reports provided by United Behavioral Health and the state of Ohio. The analysis of the utilization and cost effect of parity and managed care is pre-post, with a multiyear follow-up period. RESULTS: The switch from unmanaged indemnity care to managed carve-out care was followed by a 75% drop in inpatient days and a 40% drop in outpatient visits per 1000 members, despite the simultaneous increase in benefits. The subsequent years saw a continuous decline in inpatient days and an increased use of intermediate services, such as residential care and intensive outpatient care. The number of outpatient visits stabilized in the range of 500-550 visits per 1000. There was no indication that costs started to increase during the study period; instead, costs continued to decline. A somewhat different picture emerges when comparing utilization under HMOs with utilization under a carve-out with expanded benefits. In that case, the expansion of benefits led to a significant jump in outpatient utilization and intermediate services, while there was a small decrease in inpatient days. Insurance payments in 1996/1997 were almost identical to the estimated costs under HMOs in 1993. CONCLUSIONS: In contrast to the emerging inflation anxiety regarding overall health care costs, managed care can provide long-run cost containment for ADM care even when patient copayments are reduced and coverage limits are lifted. This may differentiate ADM care from medical care and reasons for this difference include the state of management techniques (more advanced for ADM care), complexity of treatments (much higher technology utilization in medical care) and demographic factors (medical, but not behavioral health, costs increase as the population ages). IMPLICATIONS FOR HEALTH POLICY: The experience of the state of Ohio demonstrates that parity level benefits for ADM care are affordable under managed care. It suggests that the concerns about costs that have stymied ADM policy proposals are unfounded, as long as one is willing to accept managed care. IMPLICATIONS FOR RESEARCH: The continuing decline in costs raises concerns that levels of care may become insufficient. While concerns about costs being too high dominate the policy hurdle for parity legislation at this moment, the next step in research is to address quality of care or health outcomes, areas about which even less is known than about costs.     

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.     

Mental health parity: what are the gaps in coverage?

BACKGROUND: Mental health benefits in private health insurance plans in the United States are typically less generous than benefits for physical health care services, driving reform efforts to achieve parity in coverage. While there is growing evidence about the effects such legislation would have on the utilization and cost of mental health services, less is known about the impact parity would have on reducing the risk of large out-of-pocket expenses that families would face in the event of mental illness. AIMS OF THE STUDY: We seek to understand the impact that mental health parity would have on the out-of-pocket burden that families would face in the event of mental illness. We focus in particular on variations in coverage across the privately insured population. METHODS: We compare out-of-pocket spending for hypothetical episodes of mental health treatment, first under current insurance coverage in the United States and then under a reform policy of full mental health parity. We exploit detailed informtion on actual health plan benefits using a nationally-representative sample of the privately insured population under age 65 from the 1987 National Medical Expenditure Survey (NMES) that has been carefully aged and reweighted to represent 1995 population and benefit characteristics. RESULTS: Our results show that existing benefits of the U.S. privately insured population under age 65 leave most people at risk of high out-of-pocket costs in the event of a serious mental illness. Moreover, the generosity of existing mental health benefits varies widely across subgroups, particularly across firm size. We find significantly lower out-of-pocket costs when simulating full parity coverage. However, our results show those with less generous mental health coverage tend to have less generous physical health coverage, as well. CONCLUSIONS: Parity would substantially increase generosity of mental health coverage for most of the privately insured population. The wide variation in the generosity of existing mental health benefits suggests that there are likely to be differential impacts from a parity mandate. Those with limited physical health coverage would still be at significant financial risk for catastrophic mental illness.     

Legal and regulatory challenges in public-private managed behavioral healthcare program procurement: moving beyond the conflicts

In the past year a number of states have initiated managed behavioral healthcare proposals to reform the delivery of public mental health services. Those in Florida, Iowa and Pennsylvania have been met with administrative and legal challenges. Given the potential controversies surrounding this procurement process, the authors suggest some guidelines on how to improve the process and thereby enhance public/private collaborations--to the benefit of states, behavioral healthcare providers and clients.     

Analysis of a managed psychiatric disability program

The cost of mental illness to employers has been well documented; however, efforts to effectively reduce the costs of psychiatric disability are adversely affected by the fragmentation of health care services. This report is a case study of a program in which a managed behavioral health care organization managed the psychiatric disability of a telecommunications company. Compared with a non-random cohort of claimants not managed under the pilot, the duration of disability was reduced by 23% (17.1 days). Patient and provider satisfaction with the program was high. This study illustrates the potential for effectively reducing the cost of psychiatric disability and the challenges in coordinating health care.     

The socioeconomic costs of mental illness in Spain

Mental illness affects a large number of people in the world, seriously impairing their quality of life and resulting in high socioeconomic costs for health care systems and society. Our aim is to estimate the socioeconomic impact of mental illness in Spain for the year 2002, including health care resources, informal care and loss of labour productivity. A prevalence-based approach was used to estimate direct medical costs, direct non-medical costs, and loss of labour productivity. The total costs of mental illness have been estimated at 7,019 million euros. Direct medical costs represented 39.6% of the total costs and 7.3% of total public healthcare expenditure in Spain. Informal care costs represented 17.7% of the total costs. Loss of labour productivity accounted for 42.7% of total costs. In conclusion, the costs of mental illness in Spain make a considerable economic impact from a societal perspective.      

Dual diagnosis care for severe and persistent disorders. A comparison of three methods

People with severe and persistent mental illnesses frequently suffer from addictive disorders as well. Managed care plans and at-risk providers who care for people with these conditions must understand, authorize, and provide evidence-based and cost-effective care. The authors of this article evaluated three specialized interventions for treating people with co-occurring severe mental illness and substance abuse. Treatment of both disorders was found to be essential. In addition, a behavioral skills training was found to improve outcomes and reduce total healthcare costs when compared with intensive case management and 12-Step recovery interventions. Supplemental supportive services further increase the overall value of care. Implications for managed care and at-risk providers 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.     

Measuring Healthcare Providers' Performances Within Managed Competition Using Multidimensional Quality and Cost Indicators

Background and objectives: The Dutch healthcare system is in transition towards managed competition. In theory, a system of managed competition involves incentives for quality and efficiency of provided care. This is mainly because health insurers contract on behalf of their clients with healthcare providers on, potentially, quality and costs. The paper develops a strategy to comprehensively analyse available multidimensional data on quality and costs to assess and report on the relative performance of healthcare providers within managed competition. Data and methods: We had access to individual information on 2409 clients of 19 Dutch diabetes care groups on a broad range of (outcome and process related) quality and cost indicators. We carried out a cost‐consequences analysis and corrected for differences in case mix to reduce incentives for risk selection by healthcare providers. Results and conclusion: There is substantial heterogeneity between diabetes care groups' performances as measured using multidimensional indicators on quality and costs. Better quality diabetes care can be achieved with lower or higher costs. Routine monitoring using multidimensional data on quality and costs merged at the individual level would allow a systematic and comprehensive analysis of healthcare providers' performances within managed competition. Copyright © 2015 John Wiley & Sons, Ltd.     

Direct contracting between employers and behavioral healthcare providers

With the healthcare reform process stalled, direct contracting between employers or business coalitions and regional behavioral healthcare providers remains an effective way for employers to offer enriched managed behavioral healthcare services. This article examines the successful contractual relationship between the Procter & Gamble Company of Cincinnati, OH, and Bethesda Behavioral Health Services, a division of Bethesda Hospital, Inc., a multiservice regional healthcare provider also based in Cincinnati. Although Procter & Gamble has been committed to employee assistance program (EAP) services for more than 15 years, it determined in 1989 that a comprehensive managed care/EAP gateway plan best fit its employee relations philosophy and its need to improve the quality and reduce the cost of behavioral healthcare without reducing benefits. This article describes how that idea evolved into today's successful direct contractual relationship between Procter & Gamble and Bethesda.