How expensive are unlimited substance abuse benefits under managed care?

Workplace effectiveness and psychotherapy for mental, substance abuse, and subsyndromal conditions

While it is known that psychiatric illness and subclinical psychiatric illness can be very disabling, their impact on workers' productivity has been little appreciated or appropriately addressed. Complex variables are involved in fashioning an appropriate policy to ameliorate the impact of mental illness on productivity including the identification of effective treatments and potential negative effects of controlling patients' access to them. The cost-effectiveness of such treatments is considered from the differing perspectives and goals of the various stakeholders involved, including employers, insurers, and workers with psychiatric illness. Depression in workers leads to significant absenteeism, "presenteeism" (diminished capacity due to illness while still present at work), and significantly increased medical expenses in addition to the costs of psychiatric care. In addition to the specific usefulness of psychotropic medication, there are a variety of studies on the cost-effectiveness of different psychotherapeutic treatments that improve health and productivity in psychiatrically ill workers. Research indicates the usefulness of approaches including employee assistance programs, specialized cognitive-behavioral treatments, and brief and longer term psychodynamic interventions. It is clear that substance abuse disorders and especially depression and subsyndromal depression have a profound negative effect on work productivity and increases in medical visits and expenses. The current system of mental health care suffers from ignorance of the negative effects of psychiatric illness in workers, from a lack of subtle awareness of which treatments are most appropriate for which diagnoses and from the reluctance by payers to invest in them. Access to evidence-based appropriate treatment can improve the negative impact on productivity as well as workers' health. This article considers these issues and argues for a role of psychotherapy in the treatment of mental illness and substance abuse from the perspective of worker productivity.

Institutions, Politics, and Mental Health Parity

Mental health parity laws require insurers to extend comparable benefits for mental and physical health care. Proponents argue that by placing mental health services alongside physical health services, such laws can help ensure needed treatment and destigmatize mental illness. Opponents counter that such mandates are costly or unnecessary. The authors offer a sociological account of the diffusion and spatial distribution of state mental health parity laws. An event history analysis identifies four factors as especially important: diffusion of law, political ideology, the stability of mental health advocacy organizations and the relative health of state economies. Mental health parity is least likely to be established during times of high state unemployment and under the leadership of conservative state legislatures.

Mental health parity legislation, cost-sharing and substance-abuse treatment admissions

Treatment is highly cost-effective in reducing an individual's substance abuse (SA) and associated harms. However, data from Treatment Episodes (TEDS) indicate that per capita treatment admissions substantially lagged behind increases in heavy drug use from 1992 to 2007. Only 10% of individuals with clinical SA disorders receive treatment, and almost half who forgo treatment point to accessibility and cost constraints as barriers to care. This study investigates the impact of state mental health and SA parity legislation on treatment admission flows and cost-sharing. Fixed effects specifications indicate that mandating comprehensive parity for mental health and SA disorders raises the probability that a treatment admission is privately insured, lowering costs for the individual. Despite some crowd-out of charity care for private insurance, mandates reduce the uninsured probability by a net 2.4 percentage points. States mandating comprehensive parity also see an increase in treatment admissions. Thus, increasing cost-sharing and reducing financial barriers may aid the at-risk population in obtaining adequate SA treatment. Supply constraints mute effect sizes, suggesting that demand-focused interventions need to be complemented with policies supporting treatment providers. These results have implications for the effectiveness of the 2008 Federal Mental Health Parity and Addiction Equity Act in increasing SA treatment admissions and promoting cost-sharing.

Benefit limits for behavioral health care in private health plans

Data from a nationally representative sample of private health plans reveal that special lifetime limits on behavioral health care are rare (used by 16% of products). However, most plans have special annual limits on behavioral health utilization; for example, 90% limit outpatient mental health and 93% limit outpatient substance abuse treatment. As a result, enrollees in the average plan face substantial out-of-pocket costs for long-lasting treatment: a median of $2,710 for 50 mental health visits, or $2,400 for 50 substance abuse visits. Plans' access to new managed care tools has not led them to stop using benefit limits for cost containment purposes.

Equity in private insurance coverage for substance abuse: a perspective on parity

Congress is considering enactment of comprehensive parity legislation. The intent of parity is to equalize private coverage of behavioral and general medical care, thereby improving efficiency and fairness in insurance markets. One issue is whether to extend parity to substance abuse (SA) benefits. In the past, inclusion of substance abuse has been a hurdle to passage of parity. We examine the politics of SA parity, compare coverage trends for substance abuse and mental health, and assess the rationale for equalizing benefits. We conclude that the justification for SA parity is as compelling as it is for mental health parity.

Economic costs of drug abuse: financial, cost of illness, and services

This article examines costs as they relate to the financial costs of providing drug abuse treatment in private and public health plans, costs to society relating to drug abuse, and many smaller costing studies of various stakeholders in the health care system. A bibliography is developed from searches across PubMed, Web of Science, and other bibliographic sources. The review indicates that a wide collection of cost findings is available to policy makers. For example, the financial aspects of health plans have been dominated by considerations of actuarial costs of parity for drug abuse treatment. Cost-of-illness methods have been developed and extended to drug abuse costing to measure the national level of burden and are important to the economic evaluation of interventions at the program level. Costing is done in many small and focused studies, reflecting the interests of different stakeholders in the health care system. For costs in programs and health plans, as well as cost offsets of the impact of substance abuse treatment on medical expenditures, findings are surprisingly important to policy makers. Maintaining ongoing research that is highly policy relevant from the point of view of health services, more is needed on costing concepts and measurement applications.

Challenges in the adoption of new pharmacotherapeutics for addiction to alcohol and other drugs

The adoption of pharmacotherapies for the treatment of alcohol and drug use disorders has progressed slowly despite the approval of new and effective medications. This paper begins with overviews of the prevalence of alcohol and drug abuse and dependence, the costs of addiction to the nation, and the value of treatment services. The role of pharmacotherapy in the treatment of addictive diseases is examined, and factors that affect the adoption and use of medications for alcohol and drug treatment are identified and discussed. Investigations that tested the effectiveness of buprenorphine for treatment of opioid dependence in new settings illustrate physician and counselor training and mentorship strategies that may promote the adoption of medications in the treatment of alcohol and drug use disorders. The paper concludes with a discussion of barriers and ways to surmount the barriers and to foster greater use of medications in alcohol and drug treatment.

Treatment for substance use disorders in a privately insured population under managed care

The study investigated the relationship of substance use disorders, concurrent psychiatric disorders, and patient demographics to patterns of treatment use and spending in behavioral health and medical treatment sectors. We examined claims data for individuals covered by the same organization. Services spending and use were examined for 1899 individuals who received substance use disorder treatment in 1997. Medical and pharmacy spending was assessed for 590 individuals (31.1%). The most prevalent services were outpatient, intensive outpatient, residential, and detoxification. Average mental health/substance abuse (MHSA) care spending conditional on use was highest for those with concurrent alcohol and drug disorders (US 5235 dollars) compared to those with alcohol (US 2507 dollars) or drugs (US 3360 dollars) alone; other psychiatric illness (US 4463 dollars) compared to those without (US 1837 dollars); and employees' dependents (US 4138 dollars) compared to employees (US 2875 dollars) or their spouses (US 2744 dollars). A significant minority also sought MHSA services in the medical sector. Understanding services use and associated costs can best be achieved by examining services use across treatment sectors.

A test of mental health parity: comparisons of outcomes of hospital concurrent utilization review

The Mental Health Parity Act of 1996 had as its goal the equity of coverage of mental health care and physical health care. The purpose of this study was to examine the outcomes of hospital concurrent utilization review as a measure of the progress toward the equity goal. The study examined 4 years of denials of certification for reimbursement by payers of inpatient care (1998-2001). Psychiatry was first compared to clinical services with a like number of annual admissions and then compared to clinical services with a like number of concurrent reviews. For each year, psychiatry had the highest numbers of cases denied and patient days denied. The most frequent reason for a psychiatric denial was that the inpatient benefit level had been exceeded. There was only one instance, in 4 years, when this reason (benefit limit exceeded) was given for a patient with a physical illness. This study provides evidence of the current inequity of reimbursement for treatment of mental illness.

The sensitivity of substance abuse treatment intensity to co-payment levels

This study exploits variation in co-payment levels among different contractual arrangements within a regional managed behavioral health care organization to estimate the relationship between co-payment levels for substance use treatment services and the intensity of substance use treatment. The substance use treatment benefits involved a range of co-payment levels across nearly 400 employers during the years 1993 through 1998. Multiple regression techniques were used to estimate the effect of co-payment levels on treatment intensity. The results indicate that co-payment levels had a significant negative effect on outpatient and inpatient substance use treatment. For outpatient treatment the effect on intensity implied a co-payment elasticity of -0.18, implying that moving from a $10 co-payment to a $20 co-payment would result in, for example, a reduction from 5 to 4 outpatient visits per episode. However, the effect was larger for persons with combined alcohol and drug use disorders, as they exhibited a co-payment elasticity of -0.27. For inpatient days, the co-payment elasticity was considerably smaller at -0.017. Given the benefits of maintaining persons with substance use disorders in treatment, employers may have an incentive to take steps to minimize the barriers to treatment.

The economics of public health: financing drug abuse treatment services

Drug abuse treatment financing exhibits a heterogeneous set of sources from federal, state, and local governments, as well as private sources from insurance, patient out-of-pocket, and charity. A public health model of drug abuse treatment is presented for a market that can be characterized by excess demand in many communities and an implied policy of rationing. According to best estimates, as many as 6.7 million individuals may need treatment, but only an estimated 1.5 million individuals actually participated in treatment episodes. Since, as demonstrated empirically, drug abuse treatment has a robust and positive social net benefit to society, it is perplexing that treatment financing stops with a rationing outcome that inhibits social welfare. The justification for public financing is centered on the external costs of drug addiction, but subsidization is grounded in the reality that a large number of addicted individuals do not have sufficient resources to pay for treatment out-of-pocket, nor do they have private insurance coverage. Social welfare losses are generated by financial arrangements that are inconsistent with rational budgeting theory and as such would lead to non-optimal organization and management of the drug abuse treatment system.

Employment outcomes for hard-to-reach persons with chronic and severe substance use disorders receiving assertive community treatment

Many persons with chronic and severe substance use disorders (SUDs) enter and exit public substance dependence treatment systems with limited benefit, but continue overuse of high-cost health and human services. Less than a third holds jobs, earning income below U.S. federal poverty levels. Long-term integrated substance dependency treatment, rehabilitation, and support services will be essential to resolve substance dependence and employment problems. This single-group program evaluation reports adaptation of Assertive Community Treatment (ACT), a multi-component, team-based service model originally designed for persons with severe mental illnesses and multiple disabilities, for effectiveness with persons with severe SUDs. The ACT model delivers an integrated package of treatment, rehabilitation, and support to reduce substance misuse and increase employment. Of the 35 clients admitted 12 months prior to conclusion of this 2-year service demonstration, only one left treatment prematurely. Generally, clients modestly reduced substance misuse and increased employment. However, the evaluation design and small sample limit inferences of causation and generalizability of these promising outcomes. Persuading states to adopt expensive team-based approaches for this population will require firm evidence of favorable cost-benefit ratios.

Adverse selection and generosity of alcohol treatment benefits

Concerns about attracting disproportionate numbers of employees with alcohol problems limit employers' willingness to offer health plans with generous alcohol treatment benefits. This paper analyzes two potential avenues of adverse selection, namely biased enrollment into plans and biased exit from plans offered by 57 employers between 1991 and 1997. We compare alcohol treatment use rates and costs of new and old enrollees between more generous and less generous plans; we also analyze disenrollment rates and enrollment duration by plan generosity for users and nonusers of alcohol treatment services. To avoid confounding benefit generosity with other plan features, in particular the use of managed care mechanisms, we compare plans that were administered in the same way by a large managed behavioral health care organization. Overall, we find no evidence of adverse selection into more generous plans. Contrary to the selection hypothesis, treatment costs of new members compared to old members are lower in firms with more generous treatment benefits than in firms with more limited benefits. Also, users of alcohol treatment services do not remain disproportionately enrolled longer in plans with generous benefits.

Evaluating selection out of health plans for Medicaid beneficiaries with substance abuse

In the absence of adequate risk adjustment, capitation for enrollees creates incentives for health plans to enroll and retain good risks and to avoid bad risks. This article examines whether Maryland Medicaid beneficiaries with histories of substance abuse disenroll from health plans more frequently than those without such histories. The findings indicate that enrollees with a history of substance abuse were more likely to switch plans than other enrollees, regardless of whether they chose the health plan or were randomly assigned to the plan. These results suggest that current risk-adjustment systems may fail to offset selection incentives in modern capitated health plans.

Selecting data sources for substance abuse services research

In this article we discuss the strengths and weaknesses of using different types of data sources for alcohol and drug abuse services research. To do this, we describe four types of data sources used in substance abuse services research: surveys of organizations, medical records, claim and encounter data and program-level administrative data. For each, we outline where to obtain data, how each type has been used, and the advantages and challenges. This overview should allow investigators to think more critically about the datasets they now use; providers to understand the types of data sources most appropriate for specific research questions so as to participate more fully in research; and policy makers to interpret correctly results based on different types of data. Moreover, it should foster better communication among these stakeholders in collaborative projects to improve the effectiveness of services for people with addictions.

Full parity: steps toward treatment equity for mental and addictive disorders

The 1996 Mental Health Parity Act requiring equal annual and lifetime dollar limits for mental health benefits is to sunset 30 September 2001. This paper reviews the impact and limitations of both this law and existing state provisions and describes recent research on the actual and projected costs associated with such laws. We contend that full parity provided within the context of managed care not only is possible, but represents a "sequential" rather than a final step toward the broader goal of achieving equity in the treatment of persons with mental and addictive disorders.

Tracking changes in behavioral health services: how have carve-outs changed care?

This special issue of the Journal of Behavioral Health Services & Research on mental health carve-outs brings together some of the latest research on recent policy and market changes affecting behavioral health services. This introductory article provides background information about carve-outs and the managed behavioral health care industry. This article also reviews prior research in the mental health carve-out field.

Effectiveness research and implications for study design: sample size and statistical power

Most clinical trials have started to incorporate more broadly defined outcome measures, such as health-related quality of life, to complement clinical status measures as well as direct costs and cost-effectiveness analyses. Contrasting a broad range of outcome and cost measures, we analyze the implications for sample sizes and study design using data from prior mental health and primary care studies that span a wide range of practice settings, patient populations, and geographic areas. While meaningful clinical symptomatic differences are often detectable with sample sizes of well under 100 per cell, detecting even large changes in health-related quality of life generally requires several hundred observations per cell. Reasonable precision in cost estimates usually requires sample sizes in the thousands. Very few clinical trials or observational effectiveness studies that incorporate quality of life or cost measures have such sample sizes, resulting in many (unreported) null findings and, due to publication biases favoring significant results, scientific publications that exaggerate true effects. It raises issues for the general direction of clinical trials and effectiveness studies, as well as for how cost and health-related quality of life results based on small studies should be dealt with in publications.