Managed care and children's behavioral health services in Massachusetts.

OBJECTIVE: The authors investigated changes in treatment patterns and costs of care for children after the implementation of the Massachusetts Medicaid carve-out managed care plan. METHODS: The authors hypothesized that after the introduction of managed care, per-child expenditures would be reduced, continuity of care would not improve, and per-child mental health expenditures would undergo larger reductions for disabled children, compared with children enrolled in the Aid to Families With Dependent Children program. Using data from Medicaid and the Massachusetts Department of Mental Health, the authors studied 16,664 Massachusetts Medicaid beneficiaries aged one to 17 years for whom reimbursement claims were submitted for psychiatric or substance use disorder treatment at least once during the two years before the introduction of managed care (1991 to 1992) or during the two years afterward (1994 to 1995). Multivariate analysis was used to estimate changes in probability of admission, and, among patients admitted, to identify factors accounting for variation in length of stay. To assess the variation in expenditures, we regressed the same variables, using the natural logarithm function to transform total mental health expenditures data and inpatient expenditures data to reduce skewness. RESULTS: After the introduction of managed care, per-child expenditures were lower, especially for disabled children, and the Department of Mental Health was used as a safety net for the most seriously ill children without increasing state expenditures. Continuity of care appeared to decline for disabled children. CONCLUSIONS: It is likely that a combination of factors related to the reported changes in patterns of care and expenditures were responsible for the overall per-child expenditures.

Treatment of long-term psychiatric disorders in the managed care environment: an observational longitudinal study.

In the USA, mental health expenditures have been rising at a rate that exceeds other medical expenditures. To control these costs, insurance companies and governmental agencies responsible for health benefit plans have turned to managed care companies who review utilisation of services and who negotiate fee reductions with providers. In this study, we examined changes in patterns of care and per person expenditures among Medicaid enrollees with major mental illness. We found that after the introduction of managed care, per person expenditures were reduced by about 25%, accomplished primarily by limiting hospital admissions. We also found that admissions (and the associated costs) were not shifted to the Department of Mental Health, which funds state hospital long-term care for the indigent. Measures of continuity of care were unchanged during the study period. We conclude that managed care met its cost-containment goals without shifting costs to another state agency.

The cost and outcomes of community-based care for the seriously mentally ill.

OBJECTIVE: To examine the cost-effectiveness of community-based mental health care. DATA SOURCES/STUDY SETTING: Administrative data from Medicaid and the Massachusetts Department of Mental Health; primary data from 144 psychiatrically disabled adult Medicaid beneficiaries who lived in Boston, central Massachusetts, and western Massachusetts. STUDY DESIGN: A cross-sectional observational study compared the costs and outcomes of treatment in three different types of public mental health service systems. DATA COLLECTION/EXTRACTION METHODS: Beneficiaries, randomly sampled from outpatient mental health programs, were interviewed about their mental health status. All their acute treatment and long-term continuing care for the preceding year were abstracted from Medicaid and Department of Mental Health files. Costs were extracted from Medicaid paid claims and from Department of Mental Health contracts and other financial documents. PRINCIPAL FINDINGS: Clients in the region allocating a greater proportion of its Department of Mental Health budget to community support services used far fewer hospital days, resulting in lower per person treatment expenditures. Outcomes, however, were not significantly different from outcomes of clients in the other regions. For all regions, substance abuse comorbidity increased hospitalization and total treatment costs. An individual-level cost-effectiveness analysis identified western Massachusetts (community-based care) as significantly more cost effective than the other two regions. CONCLUSIONS: Systems with stronger community-based orientation are more cost effective.

Managing the care of schizophrenia. Lessons from a 4-year Massachusetts Medicaid study.

BACKGROUND: In 1992, Massachusetts launched a state-wide managed care plan for all Medicaid beneficiaries. METHODS: This retrospective, multi-year, cross-sectional study used administrative data from the Massachusetts Division of Medical Assistance and Department of Mental Health, consisting of claims for 16,400 disabled adult patients insured by Medicaid in Massachusetts between July 1, 1990, and June 30, 1994. The main outcome measures include annual rates of hospitalization, emergency department utilization, and follow-up care 30 days after discharge; length of inpatient stay; and per-person inpatient and outpatient expenditures. RESULTS: Between 1991 and 1994, the likelihood of an inpatient admission decreased from 29% to 24% and was accompanied by a slight reduction in length of stay (median number of bed-days per admission dropped by 3.3 days). There was a slight decrease in the number of patients who sought care in general hospital emergency department utilization. However, there was a small increase in the fraction of patients readmitted within 30 days of discharge. Medicaid and Department of Mental Health expenditures for mental health per treated beneficiary decreased slightly, from $11,060 to $10,640, during the 4-year study period. CONCLUSION: Although per-person expenditures dropped and most patient patterns of care remained the same, longer-term study is recommended to asses whether the trends can be maintained.

Persons with dual diagnoses of substance abuse and major mental illness: their excess costs of psychiatric care.

OBJECTIVES: This study examined the costs of psychiatric treatment for seriously mentally ill people with comorbid substance abuse as compared with mentally ill people not abusing substances. METHODS: Three different sources of data were used to construct client-level files to compare the patterns of care and expenditures of 16,395 psychiatrically disabled Medicaid beneficiaries with and without substance abuse: Massachusetts Medicaid paid claims; Department of Mental Health state hospital inpatient record files; and community support service client tracking files. RESULTS: Psychiatrically disabled substance abusers had psychiatric treatment costs that were almost 60% higher than those of nonabusers. Most of the cost difference was the result of more acute psychiatric inpatient treatment. CONCLUSIONS: Although the public health and financial costs of high rates of comorbidity are obvious, the solutions to these problems are not. Numerous bureaucratic and social obstacles must be overcome before programs for those with dual diagnoses can be tested for clinical effectiveness.