The impact of managed behavorial healthcare on the costs of psychiatric and chemical dependency treatment

As Congress debates the Health Security Act, a key issue centers on whether and how to include mental health and substance abuse benefits and how to contain costs if and when these benefits are paid at parity with general healthcare. Previous studies estimating the average annual cost of providing behavioral healthcare services have shown considerable divergence, depending on the nature of the defined population and the inclusion of various benefit categories, out-of-pocket expense and administrative costs. Experience from 14 members of the American Managed Behavioral Healthcare Association (AMBHA) is used to define the key features of managed behavioral healthcare, and to demonstrate that a properly managed behavioral healthcare benefit can be significantly less costly than the current reform debate would admit. AMBHA companies (which have many years of experience and presently manage the cost and quality of care for over 65 million people in the United States) See Table 3, page 28], have shown that a specialty managed care approach can achieve not only significant savings to healthcare providers, payers and society, but also improve quality and access to care. Traditional attempts at reducing mental illness benefit coverage costs have entailed limitations on the availability or access to care. These approaches, however, ignored the larger implications to society of untreated mental illness and chemical dependency. When traditional coverages have offered more extensive benefits, they have primarily favored inpatient treatment, thus increasing costs by overemphasizing care of patients at expensive inpatient settings. AMBHA's proposed principles of healthcare reform and recommended benefit packages for behavioral healthcare can be found on page 80 of this magazine.