Managed Care and Psychotherapy Research Paper

1. The Evolution of Managed Behavioral Health Care

Managed behavioral care is the integration of the financing and delivery of mental health and substance abuse treatment within a system that seeks to manage the accessibility, cost and quality of that care (Marques 1998, p. 411). The managed health care industry is the result of conflicting economic and political pressures to ensure Americans unlimited access to health care services, regardless of their ability to pay, in a marketbased system of health care delivery.

The USA is unique among industrialized nations in its reliance on private employers to voluntarily provide health insurance for their employees (Iglehart 1999, p. 6). Approximately 65 percent of Americans receive health insurance through the workplace, 66 percent of them through a managed care plan (Facts About Managed Care 1999). In all other industrialized nations, the government provides health care or requires private employers to provide coverage (Studdert et al. 1999). Fears that double-digit health inflation will cause employers to abandon the provision of health care coverage create a government interest in keeping health care premiums low.

1.1 Managing Care in the 1970s

Managed care came into prominence in the 1970s as a result of spiraling health care costs (Mullen 1995, pp. 2–6). Rapid technological advancement in combination with an aging population created exponential increases in health care spending. Health insurance allowed patients to receive treatment without awareness of the costs, permitting practitioners to ‘set their price’ without consumer flight. Employers turned to managed care as a solution to escalating insurance premiums and fears of the inefficiency of a government-run health care system.

The 1970s approach to managed care focused on utilization review of hospital care. Utilization review is a process by which a managed care organization (MCO) evaluates whether recommended treatment is medically necessary and, as a result, reimbursable under a health insurance policy. This determination is typically conducted through a comparison of proposed treatment plans with medical necessity guidelines. At first, these guidelines were considered proprietary, creating a guessing game as to the definition of medical necessity. It was not until the early 1990s that Green Spring Health Services became the first managed behavioral health care company to make medical necessity criteria public, training providers on their use.

1.2 Managing Behavioral Health Care in the 1980s

As the rapid increase in physical health costs began to slow in the 1980s, mental health costs continued to rise, representing an increasing proportion of the health care dollar (Mihalik and Scherer 1998, p. 1). Mental health benefits typically covered 28–45 days in a psychiatric hospital. This coverage encouraged overutilization of expensive inpatient services and an overbuilding of psychiatric hospitals. Psychiatric facilities competing to fill empty hospital beds advertised all-expense-paid ‘vacations’ to lush locations, respite from acting-out adolescents, and retreats for alcoholics with health insurance. One study concluded that 40 percent of psychiatric hospitalizations were medically unnecessary (Mechanic et al. 1995, pp. 19, 20).

Also in this decade, the medical cost offset of psychotherapy became widely known. Nick Cummings, through his work with Kaiser Permanente, demonstrated that brief, effective therapy could reduce the number of doctor visits of ‘high-utilizers’ by as much as 65 percent (Cummings 1985). These ‘worried well’ sought treatment despite the absence of an organic cause for symptoms. Resolution of physical complaints was successfully achieved through psychological treatment of emotional distress. Meta-analysis of other cost-offset studies found 10–33 percent reductions in hospitalization costs for physical illness following mental health treatment (Mumford et al. 1984, p. 1145). These cost reductions were attributed to the alleviation of the psychological distress associated with a traumatic or chronic illness.

The desire to prevent medically unnecessary psychiatric hospitalization and the potential for medical cost savings resulted in the creation of mental health ‘health maintenance organizations’ (HMOs). American Biodyne Centers, California Wellness Plan, and Psychology Management Systems were pioneers in the provision of unlimited outpatient mental health treatment designed to reduce inpatient psychiatric costs and overall medical expenses. As with most staff model HMOs, however, rapid access to routine mental health treatment was problematic. To increase appointment availability managed behavioral care incorporated a network model of service delivery similar to those used in medical managed care systems.

1.3 Managing Behavioral Health Care in the 1990s

Mental health ‘carve-out’ companies emerged in the 1990s. These carve-outs, called managed behavioral health organizations (MBHOs), specialize in managing mental health and substance abuse treatment. Health plans pay the MBHO a percentage of the health care premium for all members to manage the mental health utilization of the approximate 5–10 percent of members who use the benefit. The MBHO performs medical necessity review of the mental health treatment recommended by a network of independently contracted facilities, programs, and mental health practitioners. In 1999, 177 million Americans were contracted to receive mental health services managed by an MBHO (1999).

In the early 1990s the MBHO managed care through a combination of utilization review, discounted fee arrangements, and benefit management. Of mental health treatment dollars 65–80 percent were paid to inpatient and residential treatment facilities (Hennessy and Green-Hennessy 1997, pp. 340, 341). Because 80 percent of mental health expenditures were associated with treatment for 20 percent of patients, early discharge planning, strategies to improve treatment compliance, and case coordination were managed care interventions for ‘high-utilizers’ of psychiatric services (Patterson 1994, pp. 51, 54). The effectiveness of these techniques resulted in savings of 25–40 percent, at the same time increasing access to treatment for all members.

The late1990s saw the brief emergence of ‘inte- grated delivery systems.’ This approach was based on the premise that practitioners paid to provide all of a member’s care would be clinically and financially motivated to treat a patient in the least expensive, but most effective manner possible. Ideally, as the need for treatment intensity diminished, a patient could be ‘stepped down’ to less restrictive settings within the same facility, maximizing treatment coordination. Instead, costs increased and providers bankrupted. Patients previously treated at one level of care received treatment at all levels of care. Outpatient providers were unable to simultaneously provide and manage care, and still make a profit.

Given the price pressures of the industry, when delivery systems could not integrate, the MBHO industry did. Magellan Health Services acquired four MBHOs covering over 71 million members. FHC purchased Value Health Services and created ValueOptions, an MBHO covering 22 million members. United Healthcare purchased United Behavioral Health covering 20 million lives. This consolidation served as a catalyst for provider political organization and activism.

2. Criticisms of Managed Care

Most mental health providers oppose managed care. Providers contend that managed care organizations face an inherent conflict between quality and cost control. Well-publicized stories of personal tragedy resulting from bad utilization management decisions have created an environment in which managed care has gone from being the centerpiece of health care reform to its target. Provider criticisms of managed care fall into four categories: (a) increased nonreimbursable administrative time; (b) sacrificing of quality for cost savings; (c) intrusion on professional autonomy; and (d) a lack of MBHO accountability.

2.1 Increased Nonreimbursable Administrative Time

Provider dissatisfaction with managed care companies is often reflected in complaints of increased administrative time and decreased income. Many administrative requirements originate in private accreditation bodies’ concerns for the quality of care under managed care, but require providers to complete additional paperwork. For example, the National Committee for Quality Assurance (NCQA) requires ‘credentialing.’ Credentialing begins with the practitioner’s completion of a lengthy application and ends following a oneto three-month verification process. The practitioner’s education and license are validated. Malpractice history, criminal record, and complaint data banks are reviewed for patterns of misconduct. Credentialing reduces the risk that members will receive treatment from clinicians unqualified to help them or potentially harm them.

Other administrative tasks are associated with ensuring that only medically necessary treatment is reimbursed. Precertification ensures that a member’s benefit covers the services to be provided, and the medical necessity of the level and intensity of care proposed. Treatment plan review evaluates patient progress and ongoing necessity for treatment. These reviews also protect the patient from incurring surprise financial liability, and the practitioner from accruing ‘bad debt.’ Prior to managed care, 15 percent of provider revenue was written off due to an inability to collect (Luft 1999, pp. 957, 964).

2.2 Sacrificing Quality for Cost Savings

Practitioners presume that a cost containment focus precludes concerns about treatment quality. Managed care payment mechanisms such as subcapitation, case rates, or withholds are criticized for encouraging undertreatment. Yet, most studies conclude that more people access mental health treatment under HMO capitation arrangements than under fee-for-service arrangements. Although the treatment intensity is less, outcomes appear to be the same (Mechanic et al. 1995, p. 19).There is some suggestion that the seriously mentally ill do not fare as well in the HMO setting, but research design limitations prevent generalization.

Psychologists point to increased utilization of social workers as evidence of managed care’s interest in savings over quality. Yet there are no studies to suggest psychologists’ results are superior. In a survey conducted by Consumer Reports (Seligman 1995, p. 965), patients reported equal satisfaction with outcomes whether psychologists, social workers, or psychiatrists provided treatment. Because there are only 70,000 psychologists in the USA, but over 189,000 social workers (Mills 1997) who provide services at an average of $15 less per session, social work referrals improve treatment access.

The debate over managed care’s impact on treatment quality is unlikely to be ‘won’ because treatment outcomes in mental health are difficult to define and measure (Marques et al. 1994, pp. 22–9). Variations in treatment practices, inconsistent use of diagnostic coding, the cyclical nature of mental health symptom exacerbation, and a lack of professional consensus regarding the definition of a positive mental health outcome make it difficult to determine what works and what doesn’t. Patient satisfaction with treatment, although measurable, is not correlated with outcome. Patient self-reports of improvement are inconsistent with providers’ perceptions of treatment completion. Despite these limitations, research has consistently determined that mental health treatment works and that managed care has not caused deterioration in these results. While patient and provider satisfaction has diminished, the quality of care has not.

2.3 Detracting from Practitioners’ Professional Autonomy to Advocate for Patients

Providers resent the imposition on professional autonomy associated with medical necessity review. It is popular to complain of clerical oversight of professional judgment. Although it is possible for unlicensed individuals to authorize or approve recommended treatment according to a professionally developed treatment guideline, the industry standard is that a clinical peer or board-certified psychiatrist renders all nonauthorization decisions. Many states legislate peer review and both NCQA and the Utilization Review Accreditation Commission (URAC) require it.

Fears of ‘economic credentialing’ pressure clinicians to consider financial factors when recommending treatment, conflicting with professional ethics of patient advocacy. Providers are concerned that only those who treat individuals ‘cheaply’ will be retained in a managed care network, while providers who favor longer-term treatment, and potentially better outcomes, will be excluded. Yet few providers are removed from managed care networks for patterns of excessive overutilization. The preauthorization requirement often detects and prevents overutilization before it occurs. More common causes for provider termination are noncompliance with credentialing requirements, or provider requests for network removal. Access requirements make narrowing a managed care network solely on utilization unlikely.

2.4 Percei ed Lack of Accountability

Managed care reform began to appear on state legislative agendas in 1995 and on the congressional agenda in 1996. Providers organized to fight managed care at the state level. Symbolically targeting ‘gag clauses,’ physicians began talking to the media, raising consumer anxieties about the quality of health care provided by profit-seeking managed care companies. Despite research to the contrary, the public became convinced through anecdote that managed care was destroying US health care.

Public concern about a perceived lack of managed care accountability has resulted in a proliferation of regulation in the last five years. All 50 states have passed some form of managed care legislation. Federal patient rights legislation has been introduced in Congress every year since 1997. NCQA introduced MBHO quality standards in 1996.

Mental health providers, frustrated with managed care’s impact on their practices, are diversifying by providing consultation, education, and forensic services. ‘Cash only’ practices are emerging, with promises of enhanced privacy due to the absence of managed care oversight. For managed behavioral care to continue to evolve in the new millennium, it must repair its relationship with providers. A patient-centric model of managed behavioral care provides a framework in which practitioners and managed care can partner to achieve the shared goal of improving mental health in the USA.

3. The New Millennium: Patient-centric Care Management

In the patient-centric model of managing behavioral care, an MBHO hires clinician-care managers who:

improve access to needed services;

match patients to providers who have the skills and experience most likely to result in treatment success;

maximize benefit allocation through medical necessity review of recommended services;

enhance treatment outcomes through intervention with ineffective treatment plans;

sustain treatment gains through aftercare monitoring; and

identify or prevent undetected mental illness.

The patient-centric model of managing care is based on the premise that helping patients overcome an emotional disturbance quickly and keeping them well is less expensive than allowing patients to prematurely abandon treatment and subsequently return to intensive levels of care. Promoting early access to effective providers is consistent with this goal.

In a patient-centric model, individual benefits are managed in the context of the well-being of an insured population. Ensuring that care is only reimbursed when medically necessary, that a patient is treated in an effective and less costly setting, and that patients are referred to practitioners with discounted rates maximizes the value of patients’ benefits. Anticipation of benefit exhaustion and transition planning prevents individuals who cannot afford needed care from going without it.

Removal of barriers to mental health treatment is the ultimate value managed care can bring to the therapeutic process. Transportation problems, poorly coordinated care, or identification of contraindicated drug combinations are the clinician care manager’s province, allowing the practitioner to focus on treatment interventions. By comparing recommended treatment to practice guidelines based on outcome research, managed care can promote the updating of providers’ treatment repertoires. Following treatment, periodic monitoring of a patient’s condition or follow-through with an aftercare plan can be effective in sustaining treatment gains. Joint pursuit of these patient-centric objectives permits the consumer to take advantage of treatment and care management resources, while reducing the cost of ineffective or unnecessary care.

4. Conclusion

In order to continue to reduce the cost of mental health care while maintaining or improving its quality, managed behavioral health care systems must continue to evolve and adapt. A managed care–provider partnership is unlikely to be easily achieved. Although mental health outcome research improved dramatically over the last 20 years of the twentieth century, there is still much professional disagreement about ‘what works.’ These debates are often the substance of discussion between providers and care managers. At the heart of the animosity, however, is the providers’ perceived loss of professional dignity and autonomy. The next evolution in managed care will not occur unless the providers’ sense of professionalism is restored. A patient-centric model of managed behavioral care aligns the goals of managed care employees, mental health providers, and purchaseremployers with the best interests of the patient population.

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