The Impact of Managed Care on the Psychiatric Offset Effect

Numerous studies have provided substantial evidence showing that the provision of psychiatric services offsets or reduces the subsequent provision of medical services. Yet, this evidence has not been conclusive, and in recent years it has been theorized that the offset effect may no longer be relevant because other cost-containment strategies, such as the implementation of managed care, may have reduced medical provision to a level such that there are no more savings to be obtained through assuring more equitable access to psychiatric care. This study aims to assess the continuing relevance of the psychiatric offset effect within the context of acute psychiatric inpatient care in the Commonwealth of Massachusetts. It utilizes a secondary analysis of a longitudinal cohort of 1.9 million individuals who were included in the Massachusetts case mix database of discharges from acute medical and psychiatric units between fiscal year (FY) 1994 and FY 2000. The analysis uses latent growth curve modeling and revealed a strong offset effect of-0.84 after the effects of managed care provision and other conditions are controlled for.     

The Impact of Psychopharmacology on Contemporary Clinical Psychiatry

Clinical psychiatric evaluations of patients have changed dramatically in recent decades. Both initial assessments and follow-up visits have become brief and superficial, focused on searching for categorical diagnostic criteria from checklists, with limited inquiry into patient-reported symptomatic status and tolerability of treatments. The virtually exclusive therapeutic task has become selecting a plausible psychotropic, usually based on expert consensus guidelines. These guidelines and practice patterns rest mainly on published monotherapy trials that may or may not be applicable to particular patients but are having a profound impact, not only on modern psychiatric practice but also on psychiatric education, research, and theory.     

Cost-Shifting in Managed Care

We conducted a study of the change from fee-for-service to managed care for mental health services in the Massachusetts Medicaid program, which occurred in fiscal year 1993. We estimated the effect of managed care on total public expenditures over both the short and the long term. Per person expenditures were lower by 24% in the first year of managed care but only lower by 5% in the second and third years. We also tested for cost-shifting by estimating expenditures for five specific services paid by three public agencies. Expenditures on services paid by the managed care vendor decreased, expenditures paid by Medicaid increased, and expenditures paid by the Department of Mental Health decreased. We discuss the implications for both cost-shifting and quality of care improvements. The results from two-part expenditure models indicate that some cost-shifting may be related to quality improvement. The effects are generally stronger for the beneficiaries in the highest quartile of expenditures.     

Managed Care and Ethnic Minority Populations

Managed care in mental health has changed practice patterns and utilization with largely unknown consequences for ethnic minority populations. Managed care promotes oversight and continuity, but may inadvertently create barriers to access beyond those already apparent under fee-for-service. Capitation rewards efficiency and flexibility but may promote incentives that discourage minority inclusion. As mental health system reform proceeds, the need for culturally informed programs, practices, and practitioners has not diminished. The challenge is to bring cultural expertise to bear within new organizational arrangements and financing schemes.     

A New Approach to Managed Care: The Provider-Run Organization

Behavioral managed care has been dominated by for-profit carve-out managed care organizations who deliver mental health and substance abuse services by reducing services and fees to the detriment of patients and providers. We offer a new model of managed care based on a provider-run, hospital-based approach in which provider groups contract directly with HMOs and eliminate the managed care organization intermediaries. This approach allows providers to maintain or regain control of the delivery of behavioral health services. A model is presented of an academically based organization which has achieved utilization patterns compatible with the demands of payors. Innovations in service delivery, network management and fiscal issues are reviewed.     

The Effect of Medicaid Managed Care on Mental Health Care for Children: A Review of the Literature

Despite its widespread adoption, little is known about the effect of Medicaid managed care (MMC) on children using mental health services. To assess the state of current research, we reviewed the literature on MMC and synthesized findings regarding access to care, expenditures, utilization, cost-shifting, and quality of care. A literature search was conducted and updated in November 2001. Studies were included if they involved evaluations of MMC, included children with mental health or substance abuse disorders, and had a non-MMC comparison group. Eight studies were included in the review. Most involved carve-outs and capitation. All of the studies that measured cost and service use showed decreases in total costs, inpatient care costs, and inpatient service use. These changes were frequently accompanied by increases in outpatient care. Some evidence suggests that MMC increased access to care for those with less serious conditions. There was no convincing evidence of cost-shifting from mental to physical health or other public agencies. Finally, no study directly measured health outcomes or quality of care. By reducing service use in inpatient settings, MMC has the potential to reduce children's mental health expenditures. The available research provides virtually no evidence on quality of care.     

The Professor of Public Psychiatry Model in Ohio: The Impact on Training,Program Innovation,and the Quality of Mental Health Care

The Ohio Department of Mental Health and five of Ohio's University-based Departments of Psychiatry have developed strong working partnerships that have improved the quality of psychiatric residency education and Ohio's mental health services. Strategies integral to Ohio's Public Psychiatry Model include identifying a strong champion, integrating expert consultation, and developing consensus expectations using a small amount of catalytic funding. Successful outcomes include the establishment of public psychiatry leadership roles in Ohio's community and academic settings; positive community-focused residency training experiences; revised curricula; and spin-off opportunities, such as "Coordinating Centers of Excellence" to accelerate adoption of evidence-based practices in community settings.     

Psychiatric Training and Practice Under Managed Care

Today's psychiatry residents are facing many challenges that were unknown to their predecessors who received training before the managed care era. The author explores such challenges including the shift in treatment approach from psychoanalysis toward neurobiology, psychopharmacology, and cognitive and behavioral models of psychopathology and psychotherapy. Other demands that practitioners in training must deal with under managed care are accountability, loss of autonomy, and administrative burdens. Despite these challenges, managed care appears to have brought about positive changes in ways that psychiatry is practiced, such as standardization of credentialing and of authorization forms, and greater use of technology to improve administrative efficiency. Most importantly, systems of care necessarily involve people working together, not in isolation, which should be the central lesson of residency training and private practice under managed care.     

Managed Behavioral Health Care:Lessons From Massachusetts

Since implementing the first statewide carve-out for behavioral health care in 1992, Massachusetts has achieved sustained reductions in cost, increases in access, and improvements in major quality measures. This introduction to a special issue describes the context, linkages with primary care, consumer satisfaction, unmet need, performance incentives (a key component of the success), stakeholder perspectives, and impacts on special populations. Donald S. Shepard, Ph.D., is a Professor, and Marilyn C. Daley, Ph.D., is a Senior Research Associate, both in the Heller School at Brandeis University. Richard H. Beinecke, D.P.A., A.C.S.W., is an Associate Professor in the Department of Public Management at Suffolk University. Clare L. Hurley is an Executive Assistant and candidate for an M.M. in the Heller School at Brandeis University. The first three authors are editors of this special issue. The conference on which this issue is based and the publication of this issue were supported by grant number R13AA14244-01 from the National Institute on Alcohol Abuse and Alcoholism (NIAAA) to Brandeis University. Address for correspondence: Donald S. Shepard, Ph.D., Schneider Institute for Health Policy, Heller School, Mail Stop 035, Brandeis University, Waltham, MA 02454-9110. Fax: 781-736-3928. E-mail: shepard@brandeis.edu. Web: http://sihp.brandeis.edu/Shepard.