How expensive is unlimited mental health care coverage under managed care?

OBJECTIVES: To study costs, access, and intensity of mental health care under managed care carve-out plans with generous coverage; compare with assumptions used in policy debates; and simulate the consequences of removing coverage limits for mental health care as required by the Mental Health Parity Act. DESIGN: Claims data from 1995 and 1996 for 24 managed care carve-out plans; all plans offered unlimited mental health coverage with minimal co-payments. OUTCOME MEASURES: Probability of care, intensity of care, and total costs broken down by service type and type of enrollee. RESULTS: Assumptions used in last year's policy debate overstate actual managed care costs by a factor of 4 to 8. In the plans studied, costs are lower owing to reduced hospitalization rates, a relative shift to outpatient care, and reduced payments per service. However, access to mental health specialty care increased (7.0% of enrollees) compared with the preceding fee-for-service plans (6.5%) or free care in the RAND Health Insurance Experiment (5.0%). Removing an annual limit of $25000 for mental health care, which is the average among plans currently imposing limits, will increase insurance payments only by about $1 per enrollee per year. Children are the main beneficiaries of expanded benefits. CONCLUSIONS: Concerns about costs have stifled many health system reform proposals. However, policy decisions were often based on incorrect assumptions and outdated data that led to dramatic overestimates. For mental health care, the cost consequences of improved coverage under managed care, which by now accounts for most private insurance, are relatively minor.     

The Evolution of Behavioral Primary Care.

The financing, organization, and delivery of behavioral health care services has undergone dramatic change in the past 25 to 30 years. The authors trace the evolution of behavioral health care delivery in the United States over the past several decades and find (a) that the value of mental health "carve-outs" has diminished greatly and that they are being replaced by "carve-ins," (b) that primary care physicians (PCPs) are becoming a primary source of mental health care secondary to the introduction of new medications, and (c) that PCP treatment of mental health disorders is suboptimal. The authors conclude that the behavioral health care system is entering an era of flux as it experiments with ways of integrating behavioral and primary care. Opportunities for psychologists are explored. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Providing mental health care to older adults: Unraveling the maze of Medicare and managed care.

This article reviews fundamental information about mental health benefits for older adults. Major systems, including Medicare, Medicaid, and managed care, are described. Regulations and policies that influence mental health care for older adults are distinct from those for the general population. In addition, Medicare has adopted managed-care options more recently than the private insurance industry. This relationship between Medicare and managed care is chronicled and future directions are postulated. Finally, we examine several empirical questions that have been raised due to the recent changes in the delivery of mental health care to older adults. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Managed care strategy for mental health services

In the UK, managed care is beginning to be recognized as a cost effective, quality-driven system which can be used to structure patient care. This article examines the potential use of managed care pathways in mental health services, focusing on clients with schizophrenia. The strengths of managed care include the effective coordination of healthcare resources, the clear accountable audit of mental health practice and the re-engineering of mental health practice to improve patient outcomes. Problems in designing representative care pathways and encouraging healthcare providers to implement care pathways are some of the disadvantages of this system.     

Youth psychotherapy change trajectories and outcomes in usual care: Community mental health versus managed care settings.

Objective: The authors compared symptom change trajectories and treatment outcome categories in children and adolescents receiving routine outpatient mental health services in a public community mental health system and a private managed care organization. Method: Archival longitudinal outcome data from parents completing the Youth Outcome Questionnaire (Y-OQ) were retrieved for children and adolescents (4–17 years old) served in a community mental health system (n = 936, mean age = 12 years, 40% girls or young women, 28% from families of color) and a managed care organization (n = 3,075, mean age = 13 years, 45% girls or young women, race and ethnicity not reported). The authors analyzed Y-OQ data using multilevel modeling and partial proportional odds modeling to test for differences in change trajectories and final outcomes across the 2 service settings. Results: Although initial symptom level was comparable across the 2 settings, the rate of change was significantly steeper for cases in the managed care setting. In addition, 24% of cases in the community mental health setting demonstrated a significant increase in symptoms over the course of treatment, compared with 14% of cases in the managed care setting. Conclusions: These results emphasize the need for increased attention to negative outcomes in routine mental health services and provide a stronger foundation for identifying youth cases at risk for treatment failure. In addition, given the overall differences observed across treatment settings for average rate of change and deterioration rates, results suggest that setting-specific model heuristics should be used for identifying cases at risk for negative outcomes. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Tennessee's failed managed care program for mental health and substance abuse services

In July 1996, Tennessee initiated a managed mental health and substance abuse program called TennCare Partners. This publicly funded "carve-out" experiment started chaotically and soon deteriorated into a crisis. Many patients did not receive care or lost continuity of care, and the traditional "safety net" mental health system nearly disintegrated. This qualitative case study sought to ascertain the impact of the TennCare Partners program. It points out that the program's difficulties stemmed directly from a flawed design that spread funds previously earmarked for severely mentally ill patients across the entire Medicaid population. States contemplating similar reforms should strive to protect vulnerable patients by risk-adjusting capitation payments and by focusing resources on care for severely mentally ill persons. States should also minimize program complexity and ensure the accountability of managed care networks for their patients' behavioral health care needs.     

Delivery of mental health services in the changing health care system.

Comments on the anonymous article, "Hidden benefits of managed care" (see record 1995-33982-001), in which the author expresses concern that managed care organizations are making decisions on the basis of economics and not the well-being of the patient. B. Miller and L. Farber empathize with the author's concerns, but contend that, if structured properly, HMOs can become the vehicle for the reengineering of mental health services that will produce the best patient outcomes. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

The effects of preferred provider organizations on health care use and costs

Preferred provider organizations (PPOs) now account for half the enrollment in managed care plans. There are more than 1,000 PPOs, and over 20% of the insured population in the United States are enrolled in this type of plan. Still, there have been few investigations of use and cost of health services in these plans. This paper presents an analysis of a convenience sample of 1,977 companies, most of them mid-sized, from 1988 to 1990. On average, PPOs were associated with cost savings of 12% per covered life (95% confidence interval, 7.2% to 16.9%) as compared to traditional plans with utilization review. The source of cost savings was primarily through lower utilization rates, including a 9.7% lower rate of physician office visits (5.2% to 14.3%) and a 9.3% lower rate of hospital admissions (4.1% to 14.5%). Cost savings were found in seven individual PPOs and a group of small PPOs in the study. Two PPOs were associated with added costs and results were indeterminate for four others. While PPOs may not achieve the level of savings reported by some health maintenance organizations, they may provide a means to achieve some degree of managed care savings for some employer groups.     

Managed care is harmful to outpatient mental health services: A call for accountability.

Substantial evidence indicates that managed care is harmful to outpatient mental health services. The thesis is presented that two underlying causes of these harmful effects are (1) inappropriately focusing on cutting outpatient mental health expenses and (2) dramatically reducing outpatient services as a result of managed care economics. Due to the reduced services, it is likely that treatment quality will suffer as well. The probably negative results are as follows: denying services to many who need treatment, systematically undertreating the clients who are served, and denying psychologically necessary longer term treatment to those with moderate to severe problems. To protect against these dangers, it is recommended that managed care be held accountable for reporting its economic efficiency and the quantity of services provided. Because of the inherent weaknesses in managed care, alternative cost-control strategies are suggested. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Reforming the Israeli health care market

Israel's experience in attempting to implement a health system reform based in large measure on managed competition should provide important data to other countries considering reliance on competitive mechanisms for third-party purchase of health care. In this paper, current proposals for reform of the Israeli market for third-party purchase of health care are examined in light of ideal market structures, particularly the theory of managed competition. The relationship between the theory, the notion of a 'purchaser-provider split' and the Israeli case are explored. The current Israeli health care market, which features enrollment of 96% of the population in competing sick funds, is presented. The changes necessary to base third-party purchase of health-care on managed competition are discussed. Special conditions of the Israeli health care system likely to influence implementation of a managed competition strategy are considered. Beyond a 'purchaser-provider' split, the proposals call for other restructurings, such as a split between finance and insurance functions, which the standard theory of managed competition does not take into account. The implications of these proposals for smooth functioning of the health care market must be weighed against political and ethical considerations unique to the Israeli environment.     

Managed mental health care and independent practice: A challenge to psychology.

Suggests that the rapid development of managed mental health care systems has created serious problems for psychology. Addressed are several issues that are inherent in the manner in which psychology responds to the development of these systems, particularly whether effective psychological treatment must be compromised in such systems. A model of managed mental health care is described. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Provision of psychotherapy under managed health care: A growing crisis and national nightmare.

Managed care was intended to save money by eliminating unnecessary services. However, for both physical medicine and mental health care, it is easier to save money by simply cutting needed services. This is what is happening in managed care in the US today. However, data exist for arriving at reasonable procedures to provide real help and still be cost-conscious, a fact that is being ignored by managed care companies. The German national health system covers up to 300 sessions of psychotherapy if needed, but only 3% of their outpatient medical costs are used for such psychotherapy. Unfortunately, the American managed care systems aim at short-term cost savings, even if it means higher costs in the long run (or making patients go outside the managed care health plan for help or forgo getting psychological help at all). (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Mental health services in managed care: quality questions remain

Primary care physicians are often the professionals to whom older patients turn for advice about medical coverage in Medicare managed care health plans. To assist in this dialogue, these authors outline current characteristics and financial arrangements for psychiatric and mental health services in Medicare managed care. Advantages and disadvantages of Medicare managed care for enrollees with mental disorders are outlined. Mental health "carve-out" and "carve-in" models are defined, and questions are raised about the number of psychiatrists and other mental health care providers needed to provide appropriate care for a plan's enrollees.     

The mental health care revolution: Will psychology survive?

Managed mental health care, which encompasses a wide variety of approaches, is a response to precipitous increases in health care expenditures, particularly as they relate to mental health care. The shift from what seemed certain to become a national health insurance program only 15 years ago to the profit-driven corporate health care industry of today is truly revolutionary. These profound changes are beginning to have a major impact on the independent practices of psychologists. In this article, psychologist practitioners are exhorted to recognize this new development in the marketplace. Data are cited that show the rapid shift from free choice care to various forms of managed care, and practitioners are urged to participate in shaping the changes that are now in process in order to develop a humane and effective system of mental health care. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

All that glitters is not always gold: Medical offset effects and managed behavioral health care.

This article urges caution in using broadly predicted medical offset effects in marketing managed behavioral care services. Three analyses of a health maintenance organization population who were provided managed mental health services showed that the use of simple percentage change in cost and use of hospital care may give deceptively positive results. The use of such methods may eventually undermine rather than support the credibility of managed care contracts for professional psychology. Results are discussed in the context of professional psychology's future role in guiding quality assurance and cost-effectiveness studies in regional, multiprofessional primary practice groups. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Emerging trends in mental health policy and practice

The continuing deinstitutionalization of patients in public mental hospitals and the growth of managed care are fundamentally altering mental health practice. Managed care provides opportunities for achieving parity of insurance coverage between mental and physical illness, but serious problems persist in integrating mental health, substance abuse, and general medical care and assuring an appropriate range of services and programs for persons with serious mental illness residing in community settings. Hospital and community care are poorly coordinated, and hospital care needs to be integrated into a more balanced system of services. Important new roles are emerging for purchasers, patient advocates, and mental health authorities.     

Geography and mental health: a review

In our current health care context, characterized by fiscal restraint and decentralization of accountability for health to regional authorities, geographic inequities in need, access to care, utilization, and health outcomes will come under increasing scrutiny. Knowledge gained from ecological studies about geographic disparities in mental health are likely to have important implications for policy, program planning, and resource allocations. In light of the growing relevance of the geography of mental health, this paper will review (1) selected contributions of geographic studies to the field of mental health, (2) common ecologic study approaches used in most geographic studies, (3) key conceptual and methodological challenges related to the application and interpretation of ecologic models in mental health, and (4) the wider potential of this technique for resource equity. Given the importance of geography for needs assessment and service planning, it is surprising that geographic study designs, which use ecological data, have not received greater attention as an important and viable method of assessing population mental health.     

Community-based systems of care for children's mental health services

Community-based mental health systems of care for children, adolescents, and their families involve innovative approaches to improve access, utilization, financing, clinical efficacy, and cost-effectiveness of mental health services provided to children and adolescents within the context of their home communities. This model offers numerous advantages as rising needs for mental health services in an increasingly diverse population of children and families are recognized, while public and private resources are increasingly stressed. This report reviews the history of the development of this model, its basic principles, its emerging research literature, and its application within a managed care context.     

Restructuring public mental health and substance abuse service systems

The authors originally circulated the concepts in this proposal during May 1995. The purpose was to support an open, public dialogue regarding the restructuring of the mental health and substance abuse services in Illinois in anticipation of Medicaid funding changes. Restructuring mental health and substance abuse service systems should follow certain key principles. These principles are applicable to other states, particularly those large in territory and population. The authors propose the temporary use of multiple managed care companies serving as administrative services only (ASO) organizations, each of whom would have responsibility for a given geographic portion of a state. The role of the ASOs would be to organize providers into networks on a regional basis and transfer managed care expertise in financing and clinical management to the relevant state departments and provider groups. Changes in the service delivery system would be phased in over time with reorganization of key components of the system during each phase. Where the provision of mental health, substance abuse, and social services is split among multiple state agencies, these agencies would be merged to achieve unified funding and administrative efficiency. Patients and advocacy organizations would play a key role in overseeing and shaping system restructuring at all levels, including a governmental board reporting to the governor, overseeing ASO organizations' operations and assuring quality and access at the provider level. The authors propose funding of public behavioral health services through use of a tiered, integrated funding model.     

A wake-up call: The experience of a mental health commissioner in times of change.

The experience and impressions of a state mental health commissioner are given to illustrate what it is like to head a health care agency and what a psychologist can accomplish in such a position. The author maintains that this is a time for mental health system reform, and that organized psychology must rise to the occasion, lest others define evolving health care roles. Specifically, psychologists are challenged to acknowledge the paradigm shift toward managed care, to take a lead role in developing performance and outcome measures, and to effectively address key sociopolitical issues. (PsycINFO Database Record (c) 2010 APA, all rights reserved)