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.     

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.     

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.     

Comparing provider perceptions of access and utilization management in full-risk and no-risk medicaid programs for adults with serious mental illness

This article compares provider perceptions of access to services and utilization management (UM) procedures in two Medicaid programs in the same state: a full-risk capitated managed care (MC) program and a no-risk, fee-for-service (FFS) program. Survey data were obtained from 198 mental health clinicians and administrators. The only difference found between respondents in the FFS and MC sites was that outpatient providers in the MC site reported significantly lower levels of access to high-intensity services than did providers in the FFS site (p<.001). Respondents in the two sites reported similar attitudes toward UM procedures, including a strong preference for internal over external UM procedures. These findings support the conclusion that through diffusion of UM procedures, all care in the Medicaid program for persons with a serious mental illness is managed, regardless of risk arrangement. Implications for mental health services and further research are discussed.     

Medicaid Managed Behavioral Health in Rural Areas

As of 2000, 21 states had implemented Medicaid managed behavioral health (MMBH) programs for a significant portion of their rural population. It is not clear how MMBH programs may work in rural areas since they are primarily designed to control mental health utilization. In rural areas the challenge is often to enhance service delivery, not to reduce it. MMBH programs may also affect important features of rural delivery systems, including access to care and coordination of primary care and specialty mental health providers. This article describes the implementation of MMBH programs in rural areas based on an inventory of states implementing MMBH programs in rural counties conducted between June 1999 and June 2000. The experience of MMBH programs in rural areas is also described based on case studies conducted in six states. All 21 states included the general Medicaid population (Temporary Assistance for Needy Families); 17 states included special Medicaid populations (adults with serious and persistent mental illness and children with serious emotional disturbances). Slightly less than half the states integrated (carved-in) behavioral health with physical health services in serving the general Medicaid population; only one state integrated these services for the special Medicaid population. Access to mental health care in rural areas had generally not been restricted. MMBH had little impact on the linkage between primary care and mental health. Local Managed Behavioral Health Organizations, formed by public sector entities and providers, played an increasingly important role in the evolution of MMBH.     

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.     

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 shifting to jails after a change to managed mental health care

OBJECTIVE: To determine whether managed mental health care for Medicaid enrollees in King County, Washington, has led to indirect cost-shifting to substitute treatments, such as jails and state mental hospitals that are free goods to providers. DATA SOURCES: Complete service records for 47,300 adults who used at least one of the following systems from 1993 to 1998: King County jail system, Medicaid, or the King County mental health system. Data were also obtained from the Washington State Hospital System. STUDY DESIGN: A quasi-experimental analysis that compares the difference in outcomes between the pre- and post-managed care periods for Medicaid enrollees compared to non-Medicaid enrollees. The outcomes-jail costs, state hospital costs, and county outpatient mental health costs-were estimated with two-part difference-in-differences models. The regressions control for person-level fixed effects on up to 66 months of data per person. DATA COLLECTION METHODS: Administrative data were collected from the jail, Medicaid, and mental health systems, then merged and cleaned. Additional data on costs were obtained in interviews. PRINCIPAL FINDINGS: There is a striking increase in the probability of jail use for persons on Medicaid following the introduction of managed care. There was a significant decrease in expenditures in the county mental health system for outpatient care. CONCLUSIONS: Managed care led to indirect cost-shifting, probably through poor access to services, which may have led to an increased probability of jail detention.     

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.     

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.     

The 'quiet' crisis in mental health services

The failure of insurers and managed care organizations to reimburse providers of mental health services for the costs of care has led to a crisis in access to these services. Using the situation in Massachusetts as a case example, this paper explores the impact of this defunding. Unable to sustain continued losses, hospitals are closing psychiatric units, and outpatient services are contracting or closing altogether. The situation has been compounded by the withdrawal of many practitioners from managed care networks and cuts in public-sector mental health services. Unless purchasers demand effective coverage of mental health treatment, mental health services will likely continue to wither away.     

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?     

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.     

Public Managed Care and Service Access in Outpatient Substance Abuse Treatment Units

The continued growth of public managed behavioral health care has raised concerns about possible effects on services provided. This study uses a national sample of outpatient substance abuse treatment units surveyed in 2005 to examine associations between public managed care and service access, measured as both the types of services provided and the amount of treatment received by clients. The percentage of clients funded through public managed care versus other types of public funding was positively associated with treatment units’ odds of providing some types of resource-intensive services and with the odds of providing transportation to clients, but was negatively associated with the average number of individual therapy sessions clients received over the course of treatment. In general, public managed care does not appear to restrict access to outpatient substance abuse treatment, although states should monitor these contracts to ensure clients receive adequate courses of individual treatment.     

Helping and hindering: perceptions of enablers and barriers to collaboration within a rural South Australian mental health network

Objective: To evaluate clinicians’ perceptions of what helps and hinders the delivery of mental health care across a service network in a rural setting. Design: Qualitative, semistructured interviews were conducted with 10 individuals who work in one rural mental health care service network. Setting: A regional centre in rural South Australia involving representatives of the mental health team, general practice, hospital, community health and nongovernment organisations. Results: Clinicians’ perceptions of barriers and enablers to working within their mental health care network were explored. Participants showed a strong shared commitment to effective mental health care delivery and a good understanding of the services that each offers. Interview data suggested that working relationships between local services could be perceived as stronger when a personal or historical element is recognisable. Similarly, the notion of familiarity and community involvement were perceived as facilitators in this network. A perceived barrier for participants was the failure to attract staff with mental health experience, leading to dependence upon the dedication and commitment of existing service providers. Conclusions: Collaboration is especially necessary in rural areas, where access to health care services is known to be difficult. The informality of relationships between service providers was shown to be the main facilitator in the network. This is both a strength as it promotes the communication between services and service providers that is essential for successful collaboration, yet is also a threat to the sustainability of the network based on the difficulties of staff recruitment and retention to rural settings.     

Service Use of Rural and Urban Medicaid Beneficiaries Suffering From Depression: The Role of Supply

Despite the prevalence and consequence of depression in rural areas, the literature on treating depression in rural areas is relatively scarce and inconclusive. The use of mental health services by rural people suffering from depression and the role that supply may play in explaining these differences are not well understood. Understanding these issues for rural Medicaid beneficiaries is important as Medicaid managed carefor physical and behavioral health care is expanded to rural areas. This study compares the mental health service use of rural and urban Medicaid beneficiaries, ages 18 to 64, in Maine suffering from depression and examines what influence mental health and primary care supply have in explaining observed differences. Two models are used to estimate the use of ambulatory mental health services: (1) a logit likelihood estimate of whether a beneficiary uses any outpatient mental health services for depression; (2) an ordinary least squares regression estimating the number of annualized ambulatory mental health care visits among users. Rural beneficiaries suffering from depression have lower utilization than urban beneficiaries. Rural and urban Aid for Families with Dependent Children (AFDC)--and Supplemental Security Income (SSI)--beneficiaries suffering from depression rely more on mental health than on general health care providers to receive ambulatory mental health care. Rural beneficiaries (AFDC and SSI) rely relatively more on general health care providers than urban beneficiaries. Multivariate analysis suggests that mental health supply and patient-level factors, but not primary care supply, account for utilization differences. This article describes the need to better understand factors limiting participation of primary care providers and to study the role of supply across multiple states.     

Adolescents and access to health care.

The developmental characteristics and health behaviors of adolescents make the availability of certain services--including reproductive health services, diagnosis and treatment of sexually transmitted disease, mental health and substance abuse counseling and treatment--critically important. Furthermore, to serve adolescents appropriately, services must be available in a wide range of health care settings, including community-based adolescent health, family planning and public health clinics, school-based and school-linked health clinics, physicians'' offices, HMOs, and hospitals. National, authoritative content standards (for example, the American Medical Association''s Guidelines for Adolescent Preventive Services (GAPS), a multispecialty, interdisciplinary guideline for a package of clinical preventive services for adolescents may increase the possibility that insurers will cover adolescent preventive services, and that these services will become part of health professionals'' curricula and thus part of routine practice. However, additional and specific guidelines mandating specific services that must be available to adolescents in clinical settings (whether in schools or in communities) are also needed. Although local government, parents, providers, and schools must assume responsibility for ensuring that health services are available and accessible to adolescents, federal and state financing mandates are also needed to assist communities and providers in achieving these goals. The limitations in what even comprehensive programs currently are able to provide, and the dismally low rates of preventive service delivery to adolescents, suggests that adolescents require multiple points of access to comprehensive, coordinated services, and that preventive health interventions must be actively and increasingly integrated across health care, school, and community settings. Unless access issues are dealt with in a rational, coordinated fashion, America''s adolescents will not have access to appropriate health services. Current efforts to minimize current health care expenditures through managed care programs inevitably conflict with efforts to deliver comprehensive preventive services to all adolescents. Use of multiple sites may not represent inadequate access to care. However, as managed care reimbursement continues to expand, school-based clinics and free-standing adolescent health programs increasingly report decreases in reimbursement without a change in demand for services. The Office of Technology Assessment study called for explicit funding and expansion of services for America''s youth; since then, a federal Office of Adolescent Health has been authorized, and, by the time this reaches print, should have received appropriations and been staffed. Dryfoos has called for expansion to nearly 5000 comprehensive programs in the coming years.(ABSTRACT TRUNCATED AT 400 WORDS)     

Medicaid managed care for mental health services: the survival of safety net institutions in rural settings

Few accounts document the rural context of mental health safety net institutions (SNIs), especially as they respond to changing public policies. Embedded in wider processes of welfare state restructuring, privatization has transformed state Medicaid systems nationwide. We carried out an ethnographic study in two rural, culturally distinct regions of New Mexico to assess the effects of Medicaid managed care (MMC) and the implications for future reform. After 160 interviews and participant observation at SNIs, we analyzed data through iterative coding procedures. SNIs responded to MMC by nonparticipation, partnering, downsizing, and tapping into alternative funding sources. Numerous barriers impaired access under MMC: service fragmentation, transportation, lack of cultural and linguistic competency, Medicaid enrollment, stigma, and immigration status. By privatizing Medicaid and contracting with for-profit managed care organizations, the state placed additional responsibilities on "disciplined" providers and clients. Managed care models might compromise the rural mental health safety net unless the serious gaps and limitations are addressed in existing services and funding.