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Health Care Costs and Financing

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A study of one managed behavioral health care organization does not show a shift in treatment costs to drugs and primary care

Managed behavioral health care organizations (MBHOs) have reduced the costs of specialty mental health and substance abuse treatment, primarily by substituting less expensive outpatient services for inpatient care. There remains concern that MBHOs may shift mental health treatment to primary care and prescription drugs (use of drugs instead of psychotherapy) in order to reach contractual cost-savings goals in the specialty mental health sector. However, a case study of a single MBHO found no evidence to suggest that it shifted treatment costs in this way.

Nevertheless, MBHOs are ubiquitous, and powerful market incentives remain for MBHOs to shift costs toward alternative treatments and settings. Samuel H. Zuvekas, Ph.D., of the Agency for Healthcare Research and Quality, and coinvestigators analyzed claims data from 1991-1995 from an insurer that introduced an MBHO in 1992 to control treatment costs. The MBHO faced incentives related to reputation and contract renewal to shift costs to primary care treatment or prescription drugs.

The use of any psychotropic medication rose 64 percent over the 4-year period among enrollees of the large employer group that had parity for physical and mental health care and by 87 percent in the smaller groups without parity. Often these medications were prescribed in primary care settings. Introduction of the MBHO was not significantly associated with the use of any psychotropic medication alone, and for newer antidepressants, it was associated with a 2.4 percentage point decrease in medication use alone in the large group.

The savings achieved by reducing inpatient spending may have allowed the MBHO to meet performance targets without aggressively shifting costs, suggest the researchers. They call for more studies on the effect of MBHOs on the overall quality of care for people with mental illnesses.

See "Cost shifting under managed behavioral health care," by Dr. Zuvekas, Agnes Rupp, Ph.D., and Grayson Norquist, M.D., M.S.P.H., in the January 2007 Psychiatric Services 58(1), pp. 100-108. Reprints (AHRQ Publication No. 07-R036) are available from the AHRQ Publications Clearinghouse.

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