Diagnosis-related groups for mental disorders, alcoholism, and drug abuse: evaluation and alternatives

Under the new federal prospective payment system, 15 of the 467 diagnosis-related groups (DRGs) cover mental disorders, including alcohol and substance abuse. The authors compare these 15 DRGs with some criteria of an ideal patient classification system. According to their assessment, the DRGs for mental disorders pose no administrative problems, but are not sufficiently homogeneous within categories or heterogeneous between categories. The authors conclude by discussing their own attempt to develop alternative DRGs, based on such variables as age, marital status, and type of treatment as well as on diagnosis.

Prospective payment for psychiatric hospitalization: questions and issues

Can prospective payment control the cost of Medicare treatment without seriously affecting the quality of care? The authors pose this question and then explore the new system's implications for the mental health field. Because psychiatric diagnoses do not adequately describe the reasons for hospitalization, and because treatment of mental disorders is not standardized throughout the country, the authors posit that psychiatric hospitals will have difficulty adjusting to a reimbursement system based on diagnosis alone. They also review four major aspects of the prospective payment system: efficiency, equity and access for patients, quality of care, and practicality. Other issues, such as prospective payment's financial impact on medical research and technology development, are also discussed.

Prospective payment for psychiatric hospitalization: context and background

Retrospective cost-based reimbursement, incorporated into Medicare from the outset, has been the dominant mode of financing for health and mental hospital services. However, steadily rising health care costs led to the 1983 enactment of a prospective payment system for hospital reimbursement for Medicare, based on diagnosis-related groups. Many psychiatric hospitals and units are currently exempted from the system, but psychiatry and the health care field in general must deal with a number of issues, such as cost-shifting, quality of care, and adequate recognition of severity of illness, resulting from implementation of the system. The authors provide background for the prospective payment system by defining terms, summarizing the history of federal prospective payment legislation, describing three state systems, and discussing generic issues facing the health care community.

The effect of hospital payment methods on the pattern and cost of mental health care

The authors report on a study of the impact of a prospective payment method on hospital charges and mix of services provided to a group of Medicare patients treated for mental disorders in general acute care hospitals in Maryland. The study focused on per case reimbursement, under which hospitals are guaranteed a level of total revenue based on the number and case mix of discharges, and examined its effect on hospital charges during an index admission and on hospital and non-hospital charges over a three-month period following the index admission. The results suggest that per case reimbursement provides incentives to reduce the cost of one hospital stay, but this cost reduction is possibly offset by a higher readmission rate or by higher readmission charges. The authors conclude that the impact of the per case payment method on the total cost of mental health care over a specific period of time is insignificant, but that the payment method may influence the pattern of care.

The liaison clinic: a model for liaison psychiatry funding, training, and research

While liaison or similar clinics have existed since at least 1931, they remain uncommon. The Mount Sinai Medical Center Liaison Clinic is presented as a model for psychiatric evaluation and care of medical patients as well as training, research, and funding. In addition, it is a model for linking general and mental health systems in the tertiary care setting. The first year of operation of the clinic is described, including the sources of referral, demographic data, psychiatric, and medical diagnoses, and type of clinic contact. A total of 96 patients were seen in 390 visits, equaling three quarters of a liaison fellow's salary.

The economic costs of mental illness in Sweden 1975

The economic cost of mental illness in Sweden in 1975 was calculated at 11,800 million Swedish kronor. This means that mental illness accounts for 16% of the total economic cost due to disease. More than 90% of the direct health-care costs were accounted for by in-patient care in hospitals and nursing homes, of which one-third was attributable solely to schizophrenia. The loss of production due to morbidity and mortality accounts for about 60% of the economic cost of mental illness.

Management, cost, and quality of acute inpatient psychiatric services

A common objective of health services is to provide high quality care at the least cost, yet some services achieve these objectives better than others. Moreover, there are questions about relationships between cost and quality: do higher expenditures usually result in higher quality, or, conversely, is it possible to provide higher quality of care at expenditure levels that may be lower than other institutions? This paper reports on a study of 13 acute inpatient psychiatric units in which a range of quality and direct cost outcomes was found. Some units had higher quality and lower direct costs than the others. Some had higher quality and higher direct cost, some had lower direct costs and lower quality as well, while another group had lower quality and higher direct costs. Differences in costs and quality were found to be related more to management than to patient, staff, environmental, or institutional characteristics of these units. The findings of this study suggest that proactive management that focuses on organizational outcomes, that makes consequences of operation visible, and that promotes mutual coordination will achieve higher quality and efficient performance.

A comparative trial of home and hospital psychiatric treatment: financial costs

The financial costs of community-based treatment, stressing home treatment, were compared with the cost of hospital-based treatment during one year. Of 155 patients destined to receive inpatient treatment, 76 were randomly assigned to home treatment, 79 to hospital treatment; the two groups were similar as to important social, demographic, and clinical characteristics. The principal differences between the two treatments concerned the focus of treatment, the locale of treatment, the degree to which continuity of treatment was maintained, and the roles of the respective treatment staffs. Manpower and operating costs, measured in dollars, were estimated in two ways. Either way, hospital-based treatment was more expensive during the year: 64.1% more expensive (+3,250 vs. +1,980 per patient) in the first instance, 108.9% more expensive (+6,750 vs. +3,230 per patient) in the second. With two exceptions during the first month of treatment, the proportions of patients and families receiving either treatment who incurred other costs of treatment were low, and the differences between groups were not significantly different. A higher proportion of patients and families receiving home-based treatment defrayed the cost of the patient's psychotropic drugs; second, a higher proportion of families of patients receiving hospital-based treatment defrayed transportation costs. The proportions of patients and families incurring costs of the consequences of illness were low, and the differences between treatment groups were not significant. We compared this study with similar studies, discussed the generalizability of the results of this study and similar studies, and identified issues for future research.

General hospital psychiatry: overview from a sociological perspective

The role of the general hospital within the psychiatric service delivery network has undergone profound changes in recent years. Current issues in general hospital psychiatry revolve around questions concerning boundaries, target populations, appropriate services, structural characteristics, and deinstitutionalization. Decisions in general hospital psychiatry derive from a series of influences that originate at varing distances from day-to-day hospital operations. Planning should ideally be filtered through the hospital's internal decision-making process in order to ensure a "bottom-up" rather than a "top-down" emphasis in service policy.

A comparison of two different services treating schizophrenia: a cost-benefit approach

This study compares the clinical and social outcome for 2 cohorts of patients who had a first admission for schizophrenia 4 years earlier. One cohort was treated in a psychiatric unit attached to a teaching district general hospital (DGH)(T)), while the other was treated at an area mental hospital (AMH) with modern rehabilitation facilities. The clinical outcome for the 2 cohorts was broadly similar, but the DGH(T) imposed less of a strain on relatives, and was associated with less unmet need. The DGH unit tended to have significantly shorter durations of stay for its patients, so that its total hospital costs were less than those for the AMH despite higher unit costs. The cost-benefit analysis shows that, where these particular patients are concerned, the DGH(T) unit is economically superior to the AMH despite the fact that it supports a large teaching staff, and that these economic advantages are accompanied by various non-monetary advantages.

Reflections on psychiatry in the general-hospital setting

For psychiatry to be successfully integrated into the general hospital, the psychiatrist must function within the medical model, and his mode of practice must be consistent with general-hospital caretaking. The author discusses the positive effects of consultative and liaison psychiatry linkages in the general-hospital setting as well as the problems of financing; there are inequities of reimbursement for consultation and a lack of payment for liaison services. He makes several suggestions about the education of the psychiatrist; it should not be geared exclusively toward the psychiatrist's role as a primary caretaker. Medical schools should introduce students to the discipline of psychiatry and its interrelationships with other disciplines. Teaching hospitals should train the psychiatrist in the medical model. The author feels that the future of general psychiatry does not lie in primary care per se but in its being an identified specialty closely allied to super-specialists and to primary caretakers alike.

The impact of political process on hospital psychiatry

Political forces motivated the New York State Department of Health to withhold payment for Medicaid-financed inpatients on therapeutic passes. The elimination of therapeutic passes had many negative effects on patient care. The authors believe this experience demonstrates that political factors can overwhelm standard clinical practice and reasoned health planning to force irrational change on health care delivery.

Controlled evaluation of a hospital-originated community transitional system

The effect of a treatment program (E) providing inpatient care, a day hospital, community housing, and sheltered work are compared with a program (C) emphasizing rapid discharge. A group of 94 male general psychiatric patients were randomized to the two units. Outcome data collected at 18 months from admission revealed small but significant differences between the total samples in employment, maintenance of treatment contact, use of medication, and social adjustment. More C than E patients were in the hospital after the 14th month. Program effects varied considerably with patient type. Patients with less social disability had somewhat better employment outcomes with the E program, but no differences in use of services. Patients with a better prognosis by measure of psychopathology (Minnesota Multiphasic Personality Inventory cluster and diagnosis of schizophrenia) spent less inpatient time in the E program, but were not helped to better employment outcomes. Patients with greater social handicap were not differentially affected. More E patients than C with a poorer prognosis stayed in outpatient treatment and used antipsychotic medications. Patients in the E group with better previous employment and more social isolation used the E day hospital and community housing more heavily than other E subgroups.