Issues in mental health care benefits: the costs of mental health parity

This Issue Brief discusses issues in mental health care benefits. It describes the current state of employment-based mental health benefits and discusses studies and issues regarding full mental health parity. It also includes an analysis of the effect of full mental parity on the uninsured population and the effects of the limited mental health parity provision contained in the VA-HUD appropriations bill. The final section discusses the implications of mental health parity for health plans and health insurers. When employers began to provide health insurance benefits to their employees and their families, they extended coverage to include mental health benefits under the same terms as other health care services. Many employers continued to add mental health benefits through the 1970s and early 1980s until cost pressures required employers to re-examine all health care benefits that were offered. They quickly found that, while only a small proportion of the beneficiaries used mental health care services, the costs associated with this care were very high. As a result, employers placed limits on mental health benefits in an attempt to make the insurance risk more manageable. The general strategies employers have used to manage their health care costs are cost sharing, utilization review, managed care, and the packaging of provider services. Employers' cost management strategies may be restricted, however. Five states have mental health parity laws, but three of the states--Rhode Island, Maine, and New Hampshire--apply these laws only to the seriously mentally ill. In addition, 31 states mandate that mental health benefits be provided. However, state mandates apply only to insured plans, not to self-insured employer plans, which are exempt from state regulation of health plans under the Employee Retirement Income Security Act of 1974 (ERISA). A number of recent studies have examined the effect of mental health parity on health insurance premiums in a "typical" preferred provider organization and on the uninsured. In general, the studies concluded that mental health parity could increase health insurance premiums, decrease health insurance coverage for non-mental health related illnesses, and increase the number of uninsured individuals. All studies of mental health parity, and mandated benefits in general, assume that there is a strong likelihood that increased health benefit costs would be passed along to workers in the form of higher cost sharing for health insurance, lower wage growth, or lower growth in other employee benefits.     

Economic evaluation of drug court: methodology, results, and policy implications

The purpose of this study was to conduct a cost-benefit analysis of three Drug Court programs in Kentucky for two groups of Drug Court participants: program graduates and program terminators. The economic benefits of the Drug Court programs were estimated relative to a comparison group of individuals who were assessed for the Drug Court programs, but did not enter the programs. This study highlights important factors in estimating the costs and the economic benefits of a Drug Court program. Results indicated that, particularly for graduates, Drug Court involvement was associated with reductions in incarceration, mental health services, and legal costs, as well as increases in earnings and child support payments. Net benefits and benefit–cost ratios for each program are presented and policy implications are discussed.     

The economic toll of intimate partner violence against women in the United States

This study provides estimates of the economic cost of intimate partner violence perpetrated against women in the US, including expenditures for medical care and mental health services, and lost productivity from injury and premature death. The analysis uses national survey data, including the National Violence Against Women Survey and the Medical Expenditure Panel Survey, to estimate costs for 1995. Intimate partner violence against women cost $5.8 billion dollars (95% confidence interval: $3.9 to $7.7 billion) in 1995, including $320 million ($136 to $503 million) for rapes, $4.2 billion ($2.4 to $6.1 billion) for physical assault, $342 million ($235 to $449 million) for stalking, and $893 million ($840 to $946 million) for murders. Updated to 2003 dollars, costs would total over $8.3 billion. Intimate partner violence is costly in the US. The potential savings from efforts to reduce this violence are substantial. More comprehensive data are needed to refine cost estimates and monitor costs over time.     

Contracting in College Health Instruction

This ten-year survey of the use of student mental health services offered by the University of North Carolina suggests that increased usage over time has been due to greater availability of staff and a broadening of services offered rather than to an increase of the prevalence of mental illness among the student body. The authors believe that college psychiatry, as one of the earliest examples of the provision of mental health services to a community, can be used as a model for other aspects of public health psychiatry.     

College psychiatry as public health psychiatry. 1967

This ten-year survey of the use of student mental health services offered by the University of North Carolina suggests that increased usage over time has been due to greater availability of staff and a broadening of services offered rather than to an increase of the prevalence of mental illness among the student body. The authors believe that college psychiatry, as one of the earliest examples of the provision of mental health services to a community, can be used as a model for other aspects of public health psychiatry.     

Long-Term Services and Supports for Older Adults: A Review of Home and Community-Based Services Versus Institutional Care

Despite a shift from institutional services toward more home and community-based services (HCBS) for older adults who need long-term services and supports (LTSS), the effects of HCBS have yet to be adequately synthesized in the literature. This review of literature from 1995 to 2012 compares the outcome trajectories of older adults served through HCBS (including assisted living [AL]) and in nursing homes (NHs) for physical function, cognition, mental health, mortality, use of acute care, and associated harms (e.g., accidents, abuse, and neglect) and costs. NH and AL residents did not differ in physical function, cognition, mental health, and mortality outcomes. The differences in harms between HCBS recipients and NH residents were mixed. Evidence was insufficient for cost comparisons. More and better research is needed to draw robust conclusions about how the service setting influences the outcomes and costs of LTSS for older adults. Future research should address the numerous methodological challenges present in this field of research and should emphasize studies evaluating the effectiveness of HCBS.     

Average cost per person victimized by an intimate partner of the opposite gender: a comparison of men and women

Differences in prevalence, injury, and utilization of services between female and male victims of intimate partner violence (IPV) have been noted. However, there are no studies indicating approximate costs of men's IPV victimization. This study explored gender differences in service utilization for physical IPV injuries and average cost per person victimized by an intimate partner of the opposite gender. Significantly more women than men reported physical IPV victimization and related injuries. A greater proportion of women than men reported seeking mental health services and reported more visits on average in response to physical IPV victimization. Women were more likely than men to report using emergency department, inpatient hospital, and physician services, and were more likely than men to take time off from work and from childcare or household duties because of their injuries. The total average per person cost for women experiencing at least one physical IPV victimization was more than twice the average per person cost for men.     

Meeting the mental health needs of elderly clients

1. Older individuals in both community and institutional settings have traditionally underused mental health services. Providers of such care devote a minimum of their professional time to those over 65 years of age. 2. Ageism and difficulty with diagnosis are the most frequent explanations for inadequate mental health care to the elderly. This study found that lack of referrals and failure of the aged to seek services partially accounted for underuse. 3. Legislative changes mandating that aged persons be screened for and receive appropriate mental health services will increase the demand for qualified providers. 4. Nursing's approach to care of the older adult, which focuses on both physiological and psychological needs, can facilitate the delivery of comprehensive effective mental health interventions in and out of the institutional setting.     

Estimating the cost of direct reimbursement of marriage and family therapy under Medicare

In this article, we investigated the estimated cost to the Medicare program for covering psychotherapy services provided by marriage and family therapists (MFTs). Historical trends were identified by using psychotherapy cost and utilization data for the years 1999-2001. Using these trends, projections for the years 2002-2006 were made with MFTs included as providers. Employing this methodology, the 5-year estimated net increase and gross increase in cost due to the provision of psychotherapy services by MFTs was found to be approximately dollar 10.5 million (or dollar 2.1 million per year) and dollar 13.9 million (or dollar 2.8 million per year), respectively. This represents an increase of less than 1/2 of 1% of the Medicare mental health budget, and less than .0015% of Medicare expenditures overall.     

Evaluation of a system designed to link people living with HIV/AIDS with mental health services at an AIDS-service organization

This study evaluated the Rapid Response System, an initiative designed to link people living with HIV/AIDS with mental health services at an AIDS service organization. Data were extracted from agency records for 314 clients who had contact with the Rapid Response System over a 6-month period. Of the 281 clients who scheduled an appointment for an evaluation to initiate mental health services, 64% completed the evaluation. In the multivariate analysis, Latinos were significantly less likely than whites to complete the mental health evaluation. Further, there was a significant decrease in the likelihood of completing the mental health evaluation as the number of days between the Rapid Response System contact and the date of the evaluation appointment increased.Strategies that reduce the period of time between the initial referral and initiation of services may facilitate linkage with mental health treatment, particularly in the context of larger multi-service organizations.     

Medicare and the affordable care act

The recently enacted Patient Protection and Affordable Care Act made modest changes to improve Medicare and obtained a substantial share of funding for the Act's broader reforms from future spending reductions in the program. Drug benefits and preventive services were improved. While painful, the spending reductions will have only moderate impacts on beneficiaries and should help achieve the goals of health care reform: encouraging better primary and preventive care, making providers conscious of finding ways to increase the productivity of care delivered and changing the relative levels of payment across certain providers. Additional costs to beneficiaries will arise from changes in private plan payments and increasing income-related premiums.     

Independence pays: a cost and resource analysis of direct payments in two local authorities

Although there is an increasing amount of literature on direct payments (DP), to date there have been few studies which have examined in any detail the costs and resources associated with them. This paper presents findings from a two year study conducted in two Welsh local authorities that jointly fund an Independent Living Support (ILS) scheme. The main study was not designed to provide definitive cost comparisons with conventional services, however, cost and resource implications of DP were considered and an analysis to determine comparative costs between DP and traditional services was undertaken. The study notes the difficulty in identifying the true cost of DP and reasonable comparators with traditional services. A set of four case studies are presented comparing actual costs of DP and in‐house and independent sector services in the two local authorities studied. The comparison of costs and resources, which did not include significant costs for traditional local authority services but included the cost of the DP support scheme, found that DP was cheaper than traditional in‐house service provision and relatively cost neutral when compared with independent sector provision. User satisfaction, however, was significantly greater with DP than traditional service delivery methods. The paper also examines factors which can potentially influence the cost of DP. The study suggests that DP represent a substantial improvement over traditional arrangements from a cost–benefit perspective. There is strong evidence to suggest that greater ‘opportunity cost’ savings can be anticipated when DP schemes become more fully integrated into policy, practice and procedures.     

Homelessness and Children's Use of Mental Health Services: A Population-Based Study

This study examined whether children who become homeless differ from other low-income children in their mental health service use before and after their first homeless episode, and to what extent homelessness is associated with an increased likelihood of mental health service use. Differences between children with and without new onset of sheltered homelessness in the use of mental health services emerged following homelessness and widened over time. Sheltered homelessness and foster care placement history were associated with increased odds of receiving inpatient and ambulatory mental health services. Findings underscore the importance of collaborations between homeless assistance, foster care, and mental healthcare in efforts to mitigate family homelessness and collateral needs among homeless children.     

Risk and selection processes between the general and the specialty mental health sectors

This paper examines risk, defined as the threat of danger or disruption, as a contextual concept important for understanding patterns of patient selection and referral. We explore the hypothesis that risks associated with mental disorder, as represented by factors such as thoughts about suicide or problems associated with drinking, increase the probability of referral of patients receiving mental health care from general medical practitioners to the specialty mental health sector. Interview and claims data from the RAND Health Insurance Experiment, a large experimental study of coinsurance, are used to examine referral processes over a five-year period. Risk, and especially a measure of suicide thoughts, increase the probability of referral to specialty care. Women and persons with higher education are more likely to use specialty services; older persons are less likely to use such services. Understanding referral requires attention to the behavioral contingencies and illness behavior surrounding the presentation of mental disorder.     

A learning collaborative approach to training school-based health providers in evidence-based mental health treatment

Collaborative care models among pediatric primary care and child and adolescent mental health providers are increasingly emphasized to improve quality of and access to mental health services. The current case example of a multi-site clinical training opportunity in school-based collaborative care settings illustrates the success of a learning collaborative approach to improve children's mental health care in schools. Quality improvement data from participating sites indicated an increase in use of evidence-based practices (i.e., “core skills”) and an improvement in quality service delivery indicators for children's mental health (i.e., screening, risk assessment, diagnostic processes, associated diagnostic coding, use of core skills, associated procedural coding, and follow-up assessment and referral) over time. Clinician self-report and chart review data are supplemented by qualitative data from site leader interviews conducted following completion of the project. Implications for mental health workforce development to improve the quality of care to children and adolescents in schools and other community mental health settings are discussed.     

Promoting self-management of urinary incontinence in a geropsychiatric day treatment program

As the number of older adults in the United States increases, the number of older adults with mental illnesses also will increase. There will be a corresponding increase in prevalence of UI and its associated problems--medical problems, loss of independence or need for institutionalized care, diminished quality of life, and increased costs. Psychiatric nurses are in a position to help older adults with mental illnesses improve their overall health and quality of life by preventing the problems associated with untreated UI. Within their practice, psychiatric nurses have the opportunity to ensure clients receive the comprehensive assessments needed to establish their functional, physical, behavioral, emotional, and social support status--information that forms the foundation for developing individualized treatment interventions. Psychiatric nurses have the expertise to integrate physical and mental health care for older adults with mental illnesses and co-occurring conditions, such as UI. Promoting self-management of UI among older adults with mental illnesses potentially will enable them to participate in psychiatric rehabilitation programs; improve their overall health and quality of life; prevent falls and fractures that often cause them to lose their independent community living status and to be admitted to long-term care facilities; and reduce the cost to mental health care providers of managing UI in the treatment setting.     

The effectiveness of health care cost management strategies: a review of the evidence

This Issue Brief discusses the evolution of the health care delivery and financing systems and its effects on health care cost management and describes the changes in the health care delivery system as they pertain to managed care. It presents empirical evidence on the effectiveness of managed care and concludes with an analysis of the potential of future health care reform to influence the evolution of the health care delivery system and affect health care costs. Between 1987 and 1993, total enrollment in health maintenance organizations (HMOs) increased from 28.6 million to 39.8 million, representing an additional 11.2 million individuals, or 4 percent of the U.S. population. At the same time, new forms of managed care organizations emerged. Enrollment in preferred provider organizations increased from 12.2 million individuals in 1987 to 58 million in 1992, and enrollment in point-of-service plans increased from virtually none in 1987 to 2.3 million individuals in 1992. In addition, the percentage of traditional fee-for-service plans with some form of utilization review increased to 95 percent in 1990 from 41 percent in 1987. Measuring the effects of the changing delivery system on the costs and quality of health care services has been a difficult task, resulting in considerable disagreement as to whether or not costs have been affected. In a recent report, the Congressional Budget Office recognizes two new major findings. First, managed care can provide cost-effective health care at a level of quality comparable with the care typically provided by a fee-for-service plan. Second, independent practice associations can be as effective as group- or staff-model HMOs under certain conditions. In the future, we are likely to see a continued movement of Americans into managed care arrangements, an increase in the number of physicians forming networks, a reduction in the number of insurers, an increase in the number of employers joining coalitions to purchase health care services for their employees, and a health care system that is generally more concentrated and vertically integrated.     

DOES THE PUBLIC SECTOR IMPLODE FROM BAUMOL'S COST DISEASE?

The root of the Baumol cost disease is higher productivity increases for manufactured goods than for services. The implied increase in relative costs of service production is widely claimed to have devastating implications for the public sector as a provider of tax‐financed services such as health, education, and care. To match the increasing costs it appears inevitable that tax rates would be ever increasing. It is shown that this inference does not follow under standard assumptions when accounting explicitly for service provision from both the private and public sectors. Strikingly under assumptions often made in the literature, the welfare maximizing tax rate for a utilitarian policy maker would remain constant despite the Baumol cost disease, and by implication the share of public employment in total employment will remain constant. (JEL H5, H11, O41)     

Managed care and the rationalization of mental health services

Managed care represents a response to the wider institutional demand for technical rationality and efficiency, and it may be in conflict with professionally generated logics of mental health care which emphasize the delivery of quality care, as well as providing services to all who need care. The organizational and policy conundrum is to balance conflicting institutional demands for efficiency (cost savings) and effectiveness (access and quality). This paper examines managed care in one public sector mental health care system that has attempted to incorporate the principles of managed care into a community based system of care and to overcome the potential contradictions between demands for efficiency and professional logics of care. Both qualitative and quantitative data are used to examine changes in organizational structure and service offerings; providers' experience of managed care, and the effect of managed care on working conditions and work experiences, and changes in the goals of the organization as measured by the specification of client outcomes. I find that, while increased performance accountability and outcome assessment (in keeping with demands for efficiency) have the potential to improve mental health care services, in fact, providers report that the primary effect of managed care has been an emphasis on cost containment, and there has been a corresponding de-emphasis on the provision of community based services for clients with long term care needs. However, there is potential for professional logics to be maintained by larger institutional forces demanding quality care.