Annotated Bibliography - Benefit and System Design

This special supplementary section of the CounsellingBooks.com bibliography provides an independently produced annotated bibliography on managed behavioural healthcare prepared for the US Substance Abuse and Mental Health Services Administration; please see the first page of the supplement for recommended citation information.

Table of Contents

  1. Introduction
  2. Benefit and System Design
  3. Capitation
  4. Community Mental Health Services
  5. Diagnosis-Related Groups (DRGs)
  6. Economics, Forecasting, and Pricing
  7. Employee Assistance Programs (EAPs)
  8. Health Maintenance Organizations (HMOs)
  9. Law and Ethics
  10. Provider Issues
  11. Public Sector
  12. Quality Assurance and Outcomes
  13. Special Populations
    1. Children
    2. Elderly
    3. Ethnic Groups
    4. Women
  14. Substance Abuse
  15. Training and Education
  16. Utilization Management
  17. Author Index
  18. Keyword Index

Benefit and System Design

1. Abrams, H. S. (1993). Harvard Community Health Plan’s mental health redesign project: A managerial and clinical partnership. Psychiatric Quarterly, 64, 13-31.

The Harvard Community Health Plan (HCHP) redesigned its program in an effort to address high costs and member and clinician dissatisfaction in the delivery of its mental health services. In an extensive needs assessment, members, clinicians, and managers identified a number of prob-lems in the HCHP mental health care delivery system. These included lack of access, inconsistent service delivery between sites, lack of systematic utilization management, and lack of diverse treatment programs and models. On the basis of this assessment, HCHP developed a method of categorizing patients, restructuring the delivery system, and redesigning the mental health benefit. This article describes the process and politics of the redesign effort, including the development of the mental health patient-assessment tool. Also outlined are delivery system changes, such as self-referral and group therapy, and how HCHP communicated its new benefits to members.
Keywords: private sector programs

2. Afield, W. E. (1990). Managed mental health care: Curbing costs in the 1990s. Medical Interface, 14, 26-34.

Expenditures on mental health account for almost one-third of total health care dollars spent in this country. This article documents ways in which the insurance industry has led to inap-propriate and costly use of mental health benefits. The article endorses managed mental health care (including utilization control and quality assurance) as a solution to both the quality and cost problems plaguing the current system.
Keywords: costs, quality assurance

3. Altman, L., & Price, W. (1993). Alcan Aluminum: Development of a mental health "carve-out." New Directions for Mental Health Services, 59, 55-65.

A growing number of companies are interested in "carving out" mental health services. This chapter describes the development and implementation of a carve-out plan at the Alcan Alum-inum Corporation. Alcan designed its network-based employee assistance program (EAP) and managed mental health program to reduce costs, standardize its EAPs across the Nation, and enhance the quality of services. Other objectives included enhanced case management for ado-lescents and increased access for employees in rural areas. The article describes lessons learned, such as building consensus and creating links among vendors, administrators, and employees.
Keywords: carve-outs, EAPs, private sector programs

4. Arons, B. S., Frank, R. G., Goldman, H. H., McGuire, T. G., & Stephens, S. (1994). Mental health and substance abuse coverage under health reform. Health Affairs, 13(1), 192-205.

This article, written by several members of the President’s Task Force on Health Care Reform, the Working Group on Mental Health, describes the basis for President Clinton’s health care reform proposal in which mental health/substance abuse care is integrated with the proposed health alliances. The authors examine the organizational and financing needs of mental health and substance abuse to ensure a successful transition to a fully integrated system at parity with other health services. The article makes a case for full integration, describes the complexity of integration, and defines the financing, administrative, and monitoring steps necessary to imple-ment an integrated plan. The authors examine some of the barriers to plan implementation, and advise that, however problematic, they are not insurmountable obstacles to achieving a fully integrated system before the year 2001. The authors also provide some thoughts on how to assess whether the plan is proceeding on the right track during the transition.
Keywords: integration, legislation, parity, substance abuse

5. Bennett, M. J. (1994). Are competing psychotherapists manageable? Managed Care Quarterly, 2(2), 36-42.

This article describes the major changes currently taking place in the way behavioral health care is organized, financed, and delivered. The author argues that while much is uncertain, there is wide commitment to two objectives: to improve access and increase efficiency. Meeting both objectives requires improved coordination of resources on a wide basis and a movement beyond utilization review. The article challenges the notion that market forces alone can over-come the barriers to reform and outlines a detailed five-step strategic plan. The strategies include guaranteeing the right to necessary care, regionalizing resources under capped budgets, replacing fee-for-service reimbursement with prospective payment, aligning continuing educa-tion requirements with performance-defined gaps in knowledge, and funding professional retraining.
Keywords: overviews, providers, training, trends

6. Broskowski, A. (1991). Current mental health care environments: Why managed care is necessary. Professional Psychology: Research and Practice, 22 (1), 1-9.

As inpatient mental health costs have escalated rapidly in recent years, third-party payers and employers have started to demand cost and quality controls on the care provided. This article describes the trends in general and mental health care costs and describes a framework for understanding the structure of managed mental health care. The author illustrates methods for managing mental health costs and examines the evaluation of the impact of managed care on cost and quality of care.
Keywords: costs, overviews, trends

7. Broskowski, A. (1994). Current mental health care environments: Why managed care is necessary. In R. L. Lowman & R. J. Resnick (Eds.), The mental health professional’s guide to managed care (pp. 1-18).

Washington, DC: American Psychological Association. An earlier version of this chapter appeared in Professional Psychology: Research and Practice. Refer to Broskowski, 1991 for annotation.

8. Burton, W. N., & Conti, D. J. (1991). Value-managed mental health benefits. Journal of Occupational Medicine, 33, 311-313.

This article describes the experience of the First National Bank of Chicago’s comprehensive plan for mental health services. It contends that by managing a benefit plan assertively rather than cutting it, the quality of mental health services can be enhanced while costs are contained. The plan is based on an employee assistance program (EAP) that provides assessment, short-term counseling and referrals, psychiatric hospital utilization review, and consulting psychia-trists. An internal evaluation of the program showed declines in the number of admissions, the length of stays, and the costs of inpatient mental health.
Keywords: EAPs, evaluation, private sector programs

9. Busch, S. (1997). Carving-out mental health benefits to Medicaid beneficiaries: A shift toward managed care. Administration and Policy in Mental Health, 24(4), 301-321.

Since 1991, a number of states have initiated mental health carve-out programs for at least some of their Medicaid population, providing mental health services through a separate pro-gram from physical health care. This paper outlines the choices States face in designing such programs including cost considerations, political considerations, the procurement process, reimbursement, eligibility, risk adjustment, and benefit design. The author relies on examples from Massachusetts and Utah to illustrate differences between public and private models. From the discussion, the author concludes that while carve-out programs have yielded some initial savings, future research needs to focus on their effect on quality of care and general health care costs.
Keywords: carve-outs, Massachusetts, Medicaid, public sector, Utah

10. Dickey, B., & Azeni, H. (1992). Impact of managed care on mental health services. Health Affairs, 11(3), 197-204.

This article describes the use of two types of managed mental health care programs designed to reduce inappropriate use of hospital services and compares their impact on the use of inpatient services. Each of these programs represents a type of utilization review. The first is a mandato-ry preadmission screening program that requires certification, prior to or within 24 hours of it, that the admission is medically necessary; the program also authorizes a set number of reim-bursable days. The second program focuses on discharge planning and requires attending physicians to detail treatment plans as they relate to discharge. Thus, the first program attempts to reduce the numbers of admissions, while the second focuses on reducing length of stay. Neither program was shown to be effective in reducing mental health spending. The authors hypothesize several reasons for this, including the increase in pressures that drive up the supply of and demand for mental health services, the growth of new psychiatric inpatient programs, and physician noncompliance with reviews. The authors conclude with a discussion of the limitations of the study and future research needs.
Keywords: evaluation, utilization management

11. Duhl, L. J. (1994). Can mental illness be prevented under managed care? Managed Care Quarterly, 2(2), 7-9.

The author argues that the movement toward managed mental health care focuses narrowly on intervention techniques and cost containment. These foci are inappropriate and will not lead to an overall improvement in mental health for the majority of people who need and seek mental health care. A more appropriate system would recognize the importance of the social and cul-tural context of individual lives and their social networks. From the author’s perspective, a program that moves beyond the medical model and recognizes the importance of jobs, recre-ation, and education is more likely to have a positive impact on the mental health of individu-als in a community than would the managed care approach.
Keyword: prevention

12. Durham, M. L. (1994). Health care’s greatest challenge: Providing services for people with severe mental illness in managed care. Behavioral Sciences and the Law, 12(4), 331-439.

This article discusses the fundamental advantages of managed care for persons with severe mental illness (SMI) and examines how this patient population is treated in actual practice. Specifically, the author analyzes the advantages and the actual practice data for this population for three primary aspects of managed care: institutional care, coordination of care, and preven-tion. Regarding these three principles of managed care, the author notes that SMI individuals do not receive the best care possible, and the author offers solutions on how to best improve care for these individuals within a managed care framework. Some of the solutions which are suggested solely for the SMI population include specialized HMOs, training and support for primary care physicians to better diagnose and refer individuals with SMI to the appropriate treatment, financing schemes that decrease the copayments for SMI individuals, developing risk assessment models specifically for the SMI populations, and developing clearer ethical guide-lines for treating SMI patients.
Keywords: serious mental illness

13. England, M. J., & Goff, V. V. (1993). Health reform and organized systems of care. New Directions for Mental Health Services, 59, 5-12.

Several major companies are using organized systems of care (OSC), an integrated care financing and delivery system. The authors argue that organized systems of mental health and substance abuse care can achieve both cost management and quality improvement through the use of a select multidisciplinary panel of providers and the delivery of a continuum of services from prevention and primary care through chronic care. The chapter provides two examples of the development of OSCs. Finally, the chapter describes how OSCs are different from current managed care systems.
Keyword: integration

14. England, M. J., & Vaccaro, V. A. (1991). New systems to manage mental health care. Health Affairs, 10 (4), 130-137.

Early managed care arrangements focused primarily on reducing costs and only secondarily on improving access or quality of care. This narrow focus contributed to the bitter opposition of managed health care plans by clients and providers of mental health services. More recently, managed mental health care organizations have demonstrated that managing care not only reduces costs, but also potentially enhances early detection of mental health problems, offers a broad range of services, provides continuity of care, reduces the costs shifted to individuals, and prevents unnecessary hospitalization. The authors argue that managed care systems will increasingly be required to demonstrate their quality of services provided in order to success-fully compete for contracts with businesses. This article describes six case studies of businesses that have introduced managed systems of care for their employees.
Keywords: private sector programs

15. Feldman, S. (Ed.). (1992). Managed mental health services (1st ed.). Springfield, IL: Charles C. Thomas.

This book was written by those involved in or connected to the managed mental health sys-tem: as payors, providers, managers, health-benefit consultants, human resources and employ-ee assistance program (EAP) staff, researchers and teachers, and public and private policymak-ers. The book’s wide range of topics includes the genesis of managed mental health and its application to particular settings. Several viewpoints are represented, including those of corpo-rations, of the purchasers of health care, and of the freestanding managed mental health firms. One chapter describes the basics of a mental health evaluation system; another addresses the special quality assurance needs that managed mental health firms have. Finally, the book rais-es, in separate chapters, clinical, ethical, and legal issues.
Keywords: ethics, managed behavioral health care organizations, overviews, perform-ance measurement, quality assurance

16. Feldman, S. (1998). Behavioral health services: Carved out and managed. The American Journal of Managed Care, 4, SP59-SP67.

Mental health and physical health have maintained the same relationship for the past 200 yearsÑseparate. The managed behavioral health carve-out (MBHCO) is the most current demonstration of this separation, as it involves the same managed care philosophy that has revamped the physical health industry, but it is not integrated with the physical health care HMOs. This article examines the financial incentives that led to the development of the MBHCO as well as their common characteristics. The author illustrates such typical compo-nents of an MBHCO as contracts, payment mechanisms, and provider networks and data col-lection, through the example of United Behavioral Health. He also highlights available research on the effects of the MBHCO on cost and utilization, access, quality, and the relationship of behavioral health services to physical health care and other human services. The author also argues for further research in order to evaluate the qualitative aspects of care.
Keywords: carve-outs, managed behavioral health care organizations

17. Fishel, L., Janzen, C., Bemak, F., Ryan, M., & McIntyre, F. (1993). A preliminary study of recidivism under managed mental health care. Hospital and Community Psychiatry, 44, 919-920.

This brief article reports on a study to determine the recidivism rates for mental health services provided through HMOs, case-managed programs, and fee-for-service insurance plans. In the article, recidivism rates are considered a proxy for quality of service. The records of all persons (N=365) who were referred by an employee assistance program within a 24-month period were examined. Those who made a second request for service at least three months after the initial visit but still within the 24-month study period were considered "recidivists." The study found a higher rate of recidivism in the managed care programs than in the fee-for-service plans. Limitations of this study are discussed, as are implications for future research.
Keywords: HMOs, performance measurement

18. Fisher, L., & Ransom, D. C. (1997). Developing a strategy for managing behavioral health care within the context of primary care. Archives of Family Medicine 6, 324-333.

The authors report on findings of a review of the literature from 1970 to 1996 on factors that predict the use of mental health and substance abuse services. The literature review was con-ducted as a means to guide the development of behavioral heath care programs that are com-patible with the primary care environment. The authors develop a framework to represent the main factors associated with mental health services use. They describe each of the domains and summarize the essential research findings. The domains include patient characteristics, primary care physician characteristics, practice settings, and managed care plan characteristics. Based on the findings from the literature review, the authors argue that behavioral health programs work best when they are decentralized to account for variations among primary care patients, physicians, and practices; when they are integrated clinically, financially, and administratively within the primary care setting; and when primary care physicians are active leaders in the design and implementation of these services.
Keywords: integration, primary care

19. Fitzpatrick, R. (1992). The Harvard Community Health Plan: An evolving model of managed mental health care. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 385-399). Washington, DC: American Psychiatric Press.

This chapter describes how the Harvard Community Health Plan (HCHP) reassessed the assumptions, scope, and benefits of their psychiatric and substance abuse services. The 5-year process led to a series of evaluative conclusions on what was and was not working in the men-tal health program, as well as a set of guiding principles for change, a mission statement, and new treatment modalities. The chapter describes the way in which this process was implement-ed, some of the findings, and the ways in which the HCHP has begun to implement some of the new clinical, educational, and management programs. It also describes the way in which the HCHP continues to evaluate the relative success of treatment options through clinical algo-rithms. Reports show increased patient and provider satisfaction as well as decreases in the number of hospital admissions and the length of stay.
Keywords: performance measurement, private sector programs

20. Frank, R. G., Goldman, H. H., & McGuire, T. G. (1992). A model mental health benefit in private health insurance. Health Affairs, 11(3), 98-117.

Mental health benefits in public and private insurance vary widely, from no coverage at all to a wide range of benefits. Many mental health care benefits packages provide incentives for inap-propriate types and amounts of treatment. In response to a Congressional request to the National Institute of Mental Health (NIMH), the authors designed a model mental health ben-efit for the working population. Through both supply- and demand-side incentives, this plan provides financial protection to both beneficiaries and their families, controls costs, and pro-motes cost-effective care. This article describes five principles that underlie the model plan and outlines the model benefit package itself. The article also proposes a payment system that is consistent with the development of provider networks that form the basis of many managed care programs. One goal of the model benefit is to draw national attention to the need to include mental health care in proposals for national health reform.
Keywords: health care reform, models, private sector programs

21. Frank, R. G., McGuire, T. G., Bae, J. P., & Rupp, A. (1997). Solutions for adverse selection in behavioral health care. Health Care Financing Review, 18(3), 109-122.

In this article the authors address the adverse selection and benefits for behavioral health care in the managed care era. The adverse-selection argument presents evidence that health plans offering "good coverage" for behavioral health benefits attract the bad-risk patients and there-fore, behavioral health benefits must be mandated either by a public entity or through some other means. Suggested solutions include risk adjustment of capitation rates, carve-outs, and cost- or risk-sharing between the payer and the plan.
Keywords: capitation, carve-outs, economics

22. Frank, R. G., McGuire, T. G., & Newhouse, J. P. (1995). Risk contracts in managed mental health care. Health Affairs, 14(3), 50-64.

This article examines potential implementation methods for mental health/substance abuse managed care coverage. The authors make the case for risk contracting in behavioral health care, describing the economics of risk contracting and its implications for the quality and cost-effectiveness of mental health/substance abuse service delivery. They state that in order to effi-ciently provide managed behavioral health services, it may be necessary to limit the choice con-sumers have in behavioral health care plans. As a result, the authors conclude that if behavioral health is to be covered by managed care, recipients will receive different types of care depending upon their payers’ emphases on the costs versus the benefits of services.
Keywords: contracting, economics, substance abuse

23. Frank, R. G., McGuire, T. G., & Salkever, D. S. (1991). Benefit flexibility, cost shifting and mandated mental health coverage. The Journal of Mental Health Administration, 18, 264-271.

This article demonstrates an approach to evaluating a proposed change in mental health bene-fit design that was used in the Commonwealth of Virginia. The authors designed a simulation model to allow for an assessment of costs and utilization patterns associated with four poten-tial design options for insurance benefits. After analyzing each option, the authors selected the one they believed has the potential to achieve the greatest gains in the context of the existing mental health mandate. The article describes the methods used for selecting each option, the authors’ assumptions when making the evaluation, and the analysis of each option.
Keywords: private sector programs, Virginia

24. Goldman, H. H., Adler, D. A., Berland, J., Docherty, J., Dorwart, R. A., Ellison, J. M., Pajer, K., Siris, S., & Kapur, S. (1993). The case for a services-based approach to payment for mental illness under national health care reform. Hospital and Community Psychiatry, 44, 542-544.

In this position paper drafted by a committee of the Group for the Advancement of Psychiatry, the authors describe the advantages and pitfalls of three approaches to achieve equitable cover-age for the treatment of mental illness. The three strategies are achieving parity by diagnostic status, by disability status, and by the set of services to be covered. After a comparative analy-sis of the three approaches, the authors advocate the services-based approach. They believe that a services-based approach is nondiscriminatory, and that costs can be controlled through managed care and through changes in the payment system or benefit design.
Keywords: health care reform, parity

25. Goldman, W. (1994). Myths and potentials. Managed Care Quarterly, 2(2), 51-52.

This article describes two competing myths embodied in the health reform debate. The first myth is that the current health care system allows freedom of choice and access to health care. The second is that competing organized health care systems, given economic pressures for cost containment, will correct the current inequities in the health care system and lead to the same goals (of freedom of choice and access to competent, compassionate practitioners). The author of this viewpoint piece argues that both myths obscure reality. He puts forth his vision of how the shared goals of both camps can be reached through managed mental health care.
Keywords: health care reform, overviews

26. Goran, M. J. (1992). Managed mental health and group health insurance. In S. Feldman (Ed.), Managed mental health services (1st ed., pp. 27-44). Springfield, IL: Charles C. Thomas.

This chapter provides an overview of the evolution of managed care and how it affects mental health service delivery. Group health insurance organizations are expanding their efforts to control costs through aggressive use of managed care. A number of large employers have deter-mined that fee-for-service plans are not containing costs as well as managed care networks that are similar to HMOs. Although most employers are reducing the number of options they offer, they are not inclined to "lock" employees into one choice. The chapter describes the key fea-tures of HMOs, preferred provider organizations (PPOs) and "carve-outs." Also discussed are criteria for deciding whether to use an HMO or a conventional indemnity plan.
Keywords: carve-outs, HMOs, overviews, PPOs, private sector programs

27. Grazier, K. L., & Eselius, L. L. (1999). Mental health carve-outs: Effects and implications. Medical Care Research and Review, 56 (Supplement 2), 37-59.

An increasing number of employers and states are carving out behavioral health services, sepa-rating the provision of mental health and substance abuse services out from that of general medical services. In this article, the authors examine various models for a carve-out and describe the advantages and disadvantages of carve-outs as opposed to integrated models of care. The paper summarizes recent public and private sector research on the impact of carve-outs on access and utilization, cost savings and shifting, and quality of care. From this review of previous research, the authors suggest that carve-out strategies may lead to increased access to behavioral health services (particularly outpatient services) as well as to significant cost sav-ings to sponsors through decreased inpatient utilization.
Keyword: carve-outs

28. Iglehart, J. K. (1996). Managed care and mental health. New England Journal of Medicine, 334(2), 131-135.

The author provides a brief overview of the managed behavioral health care market, in which he discusses operating techniques, quality of care, the views of mental health professionals, and the movement toward Medicaid-managed care. This report highlights the trade-off between the substantial savings achieved by managed care and the potential that these lower cost treatments are adversely affecting the lives of the mentally ill, by focusing on the outcomes of certain American corporations that have used managed behavioral health care services.
Keywords: economics, overviews

29. Judge David L. Bazelon Center for Mental Health Law & Legal Action Center (1998). Partners in planning: Consumers’ role in contracting for public-sector managed mental health and addiction services: Vol. 10. Managed care technical assistance series. Rockville, MD: Substance Abuse and Mental Health Services Administration.

As public-sector managed mental health care and substance abuse services increasingly enter into managed care arrangements, consumer groups have a unique opportunity to become involved in the formulation of contract policies. This guide is geared toward enabling con-sumers, families, and advocates to identify and advocate for the most rewarding managed care practices. The authors describe the intricacies of the contracting process, address the substance and key provisions with respect to rights issues in a contract, identify critical issues with respect to children and adolescents, suggest how consumer advocates can become involved, and provide examples of good practices from current public managed care contracts. The guide offers seven appendices including a glossary and a list of mental health and drug and alcohol addiction organizations with state-based contacts.
Keywords: children, contracting, public sector, substance abuse, technical assistance

30. Kihlstrom, L. C. (1998). Managed care and medication compliance: Implications for chronic depression. The Journal of Behavioral Health Services & Research, 25(4), 367-376.

In an effort to better manage treatment compliance for chronically mentally ill patients, some managed care organizations have initiated disease management (DM) programs for chronically depressed individuals. By focusing on education, measuring patient outcomes when practice guidelines are followed, and providing feedback to providers, DM programs claim to reduce variations in care and to result in cost savings. This article examines the success of DM pro-grams used by pharmaceutical benefit management firms (PBMs) in the management of pre-scription drugs. The author provides a brief overview of the basic functions and attributes of PBMs, including a description of their disease management practices. The article then presents and critiques five different theories regarding the issue of treatment adherence as well as find-ings from relevant studies in this area. Finally, the article discusses implications for behavioral health services and directions for future research.
Keywords: depression, serious mental illness

31. Kunnes, R. (1992). Managed mental health: The insurer’s perspective. In S. Feldman (Ed.), Managed mental health services (1st ed., pp. 101-126). Springfield, IL: Charles C. Thomas.

Mental health costs have risen dramatically for a number of reasons: growing incidence of mental health problems, "psychiatricization" of problems, expanding benefits for inpatient psychiatric and substance abuse disorders, growth of inpatient chains and franchised vendors, and more generous inpatient than outpatient coverage. Insurers have responded through the use of reduced benefits, telephone utilization review and case management, claims manage-ment, and preferred provider organizations (PPOs). The author argues that none of these approaches has reduced costs, and outlines an ideal system from an insurer’s perspective. Such a system would emphasize alternatives to inpatient care and provide for individualized treatment plans. The system would feature a sole entry point; effective triage; use of alternative services; coordinated services and settings; and experienced, specialized providers.
Keyword: models

32. Lee, F. C. (1991). Managing mental health care. Benefits Quarterly, 7(4), 91-100.

This article discusses new developments in the $500-million-a-year managed mental health care industry. Managed mental health vendors are having a major impact on reducing length of stay in inpatient alcohol rehabilitation programs. Several initiatives are under way to devel-op alternatives to inpatient care for adolescents, and to increase oversight of those admissions. Managed mental health firms are also managing carve-outs of mental health benefits and undertaking efforts to reduce worker’s compensation and disability claims. To address rising mental health costs, corporations are using employee assistance programs, capitation, utiliza-tion review, alternatives to inpatient care, and specialty carve-outs. The author also predicts several trends in managed care, such as self-regulation and the increased use of technology.
Keywords: managed behavioral health organizations, private sector programs, trends

33. Levin, B. L., Glasser, J. H., & Jaffee, C. L. (1988). National trends in coverage and utilization of mental health, alcohol, and substance abuse services within managed health care systems. American Journal of Public Health, 78, 1222-1223.

This study reports the results of a 1986 national survey of mental health, substance abuse, and alcohol services within HMOs in the United States. Ninety-seven percent of HMOs surveyed offered mental health service coverage and two-thirds of these offered alcohol and substance abuse service coverage, an increase since the 1982 survey. Annual mean mental health hospital-ization was 36.90 days per 1,000 members and annual mean ambulatory mental health utiliza-tion was 0.29 physician encounters per member. Hospital and ambulatory costs for mental health services nearly doubled since 1982.
Keywords: HMOs, substance abuse, trends

34. Lizanich-Aro, S., & Goldstein, L. (1988). A successful approach to the start up of a mental health case management program. Quality Assurance Utilization Review, 3(3), 90-94.

This paper describes how mental health professionals can design and implement a case man-agement program. Quality assurance, which is based on the use of standards and normative criteria for clinical decision making and review, is a key component of such a program. The authors briefly outline examples of such criteria and their development, and discuss how to design a peer-developed utilization review framework that fills in current gaps in mental health review approaches. Using these criteria, reviewers should be better able to address a number of case management questions, such as whether or not a treatment is appropriate.
Keywords: case management, quality assurance, utilization management

35. Lowman, R. L. (1994). Mental health claims experience: Analysis and benefit redesign. In R. L. Lowman & R. J. Resnick (Eds.), The mental health professional’s guide to managed care (pp. 119-136). Washington, DC: American Psychological Association.

This chapter provides extensive mental health benefit analyses of corporate data, which demonstrate cost problems and the financial effects of treating patients over time. The inten-tion through these analyses is to assist psychologists in understanding the forces that promote the growth of managed care. Four major issues are addressed: (1) national trends in health care costs and in health service delivery; (2) comparable trends in mental health and substance abuse treatment costs and service delivery; (3) the argument that managed care is a market-place response to concerns on the part of employers and insurers; and (4) suggested opportu-nities for cost-effective services in a competitive market.
Keywords: costs, economics, overviews, trends

36. Mahoney, J. J. (1988). Future trends and emerging issues in alternative delivery systems: A purchaser’s perspective. In D. J. Scherl, J. T. English, & S. S. Sharfstein (Eds.), Prospective payment and psychiatric care (pp. 139-154). Washington, DC: American Psychiatric Association.

This article provides a historical overview of the business community’s growing role in provid-ing employee health care. The author describes the search for alternatives to fee-for-service reim-bursement and discusses advantages and shortcomings of HMOs and preferred provider organ-izations for the business community. He concludes with a discussion of why managed care holds great promise for the provision of quality and cost-effective mental health and sub-stance abuse care.
Keywords: private sector programs, overviews, trends

37. Mayhugh, S. L., & Shueman, S. A. (1994). The development and maintenance of provider networks. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 49-64). Springfield, IL: Charles C. Thomas.

This chapter describes the development, rationale, and maintenance of a provider network for a managed behavioral health care program. The authors focus on recruitment and selection, net-work monitoring, and improvement of provider performance. The authors conclude that only through collaborative efforts between the industry and professional mental health training pro-grams will providers acquire the skills and attitudes necessary in the managed care environment.
Keyword: providers

38. McGuire, T. G., & Fairbank, A. (1988). Patterns of mental health utilization over time in a fee-for-service population. American Journal of Public Health, 78, 134-136.

This study of Massachusetts Blue Shield beneficiaries’ ambulatory mental health use found that almost 70 percent of the individuals who received services in 1980 also used mental health services in 1981 or 1982. These beneficiaries were also likely to have higher costs for medical services, which then decreased when therapy was terminated. A comparison of these findings with a similar multiyear study in an HMO revealed that patients were more likely to continue ambulatory mental health care in a fee-for-service system than in an HMO, but found no difference between the two settings in the likelihood of initiating ambulatory mental health care.
Keyword: utilization

39. Mechanic, D. (1997). Approaches for coordinating primary and specialty care for persons with mental illness. General Hospital Psychiatry, 19, 395-402.

In this era of increasing managed care penetration, primary care doctors are often the main source of treatment for a person with a psychological disorder. This paper examines six different models for integrating behavioral health with primary care in an effort to better manage patients’ care: mainstreaming, the liaison psychiatry/collaboration model, new prac-titioner models, independent carve-outs, functionally integrated carve-outs, and extended care models. The author discusses the benefits and limitations of each model, noting that certain models may be more successful with some patient populations and not as successful with others. The author also identifies five barriers that often hamper primary care physicians in managing psychological disorders. These are limited training in disorder diagnosis, lack of time to deal with psychological issues, limited experience with psychiatric drugs, fear of treating patients with psychiatric disorders, and difficulty getting patients to disclose symp-toms of psychiatric disorders.
Keywords: integration, models, primary care

40. Mechanic, D. (1998). Emerging trends in mental health policy and practice. Health Affairs, 17(6), 82-98.

This article presents an in-depth analysis of the issues surrounding managed care and mental health services. The author describes current trends in the mental health care system that provide a challenging context for the management of mental health services; these trends include deinstitutionalization and the shift of patients into community care programs and other residential facilities, parity of insurance coverage between mental and physical illness, and integration between behavioral and general health services. Serious problems exist in ensuring an appropriate range of services and programs for the seriously mentally ill residing in community settings. The author argues for increased coordination between hospital and community care and for the integration of hospital care into a more balanced system of services. Managed care organizations do not have full responsibility for the future of mental health services; these responsibilities are shared by purchasers, professionals, patient advo-cates, and the government.
Keywords: integration, overviews, parity, serious mental illness, trends

41. Mechanic, D. (Ed.). (1998). New Directions for Mental Health Services, 78.

The purpose of this book is to more carefully describe the developing system of managed care in order to guide its future design. A collection of authors helped to compose this sourcebook; initially, they present the current context of managed care by looking at a variety of issues such as utilization review and carve-outs. The second section concentrates on special issues such as contracting and special needs populations. The third section presents case study analyses from Utah, Colorado, and Massachusetts, all of which are states that have implemented Medicaid behavioral health managed care programs. The final section highlights arguments made in the prior sections and presents some observations about the future of managed care. Ultimately, the editor of this book looks to present an analysis that balances the views of managed behav-ioral health care critics and industry representatives. This effort intends to provide a clearer understanding of the industry in order to more effectively improve it in the future.
Keywords: carve-outs, Colorado, contracting, Massachusetts, Medicaid, public sector, Utah, utilization management

42. Mechanic, D., Schlesinger, M., & McAlpine, D. D. (1995). Management of mental health and substance abuse services: State of the art and early results. The Milbank Quarterly, 73(1), 19-55.

This article is a review of research literature and anecdotal reports on mental health and sub-stance abuse managed care programs. The authors conclude that managed mental health care has the potential to reduce treatment costs and to apply uniform standards of appropriate treatment for patients. While noting potential obstacles that managed mental health care plans might encounter, the authors state that some forms of managed care have been successful at incorporating more flexible benefits and more innovative treatment programs for private and public mental health patients. The article encourages further research on the quality and cost-effectiveness of managed mental health care.
Keyword: outcomes

43. Milhalik, G., & Scherer, M. (1998). Fundamental mechanisms of managed behavioral health care. Journal of Health Care Finance, 24(3), 1-15.

In this article, the authors describe the individual structures and components of managed behavioral health care organizations (MBHOs) as a means of understanding the trend in the evolution of behavioral managed care. In particular, the authors examine the advantages and disadvantages of both carving in and carving out mental health care services, various payment mechanisms and contracts between MBHOs and payers and the contracts between MBHOs and their providers (including case rate contracts and withholds), utilization man-agement systems, and models for the management and delivery of behavioral health care.
Keywords: carve-outs, contracting, managed behavioral health care organizations

44. Moss, S. (1998). Contracting for managed substance abuse and mental health services: A guide for public purchasers: Vol. 22. Technical assistance publication series. Rockville, MD: Center for Substance Abuse Treatment.

In response to the importance of establishing strong contracts between purchasers of health care services and managed care organizations in the development of managed behavioral health systems, this document provides information for public purchasers regarding the design of requests for proposals (RFPs) and contracts in managed behavioral health care. The guide includes eight separate chapters: (1) an overview of managed care and the importance of a good contract, (2) a step-by-step process for designing and implementing a managed care sys-tem, (3) a discussion on essential decisions concerning services and medical necessity, (4) an examination of the establishment and maintenance of provider networks, (5) an analysis of key features of a management information system, (6) a discussion of issues pertaining to quality of care, (7) an analysis of different aspects of financing in a managed care environment, and (8) a look at consumer protection issues. The guide also provides a resource list of organiza-tions involved in managed behavioral health care, a glossary, and nine appendices with exam-ples of proposals, sample bidder letters, definitions of different services, criteria for the use of block grant funds, outcome measures, and contract language.
Keywords: contracting, managed behavioral health care organizations, public sector, substance abuse, technical assistance

45. Nauert, R. C. (1997). Managed behavioral health care: A key component of integrated regional delivery systems. Journal of Health Care Finance 23(3), 49-61.

This article discusses the importance, in the current business environment, of a strong managed behavioral health care component within regional integrated health systems. The author dis-cusses current trends in the business environment and addresses a number of issues that need to be considered when pursuing the behavioral health care market. The author provides an overview of the alternative roles large hospitals and medical centers can take in responding to market demands for managed behavioral health care. The author also discusses planning assumptions and reviews the strengths and weaknesses of academic medical centers and large hospitals, which can impact the successful development of behavioral health care. The author provides a prototype of a managed behavioral health care strategic business unit as part of a regional health system and discusses its advantages and pitfalls. The author concludes with a discussion of capitation contracts, risk control and quality assurance, and the importance of data tracking systems.
Keywords: integration, overviews

46. Ogles, B. M., Trout, S. C., Gillespie, D. K., & Penkert, K. S. (1998). Managed care as a platform for cross-system integration. The Journal of Behavioral Health Services & Research, 25(3), 252-268.

The implementation of managed care into public sector mental health care has raised concerns about the ability of this previously private-sector strategy to provide services consistent with the core values of an integrated system of care. This paper examines the basic arguments on both sides of this debate, focusing on the recent changes in the mental health care system and the potential benefits and drawbacks of incorporating into it managed care principles. Using the example of Integrated Services for Youth, a private, nonprofit corporation in Ohio designed to manage the care of children and adolescents who are involved with multiple public-sector service systems, the authors demonstrate how managed care principles and system-of-care values are not necessarily mutually exclusive and may even facilitate cross-system integration of services for children and youth.
Keywords: children, integration, Ohio

47. Padgett, D. K., Patrick, C., Burns, B. J., Schlesinger, H. J., & Cohen, J. (1993). The effect of insurance benefit changes on use of child and adolescent outpatient mental health services. Medical Care, 31, 96-110.

This study examines the responsiveness of benefit changes on the use of outpatient mental health benefits for children and adolescents. Between 1978 and 1983, Blue Cross and Blue Shield Federal Employees Plan (FEP) benefits for dependent children and adolescents were cut, and there was a shift from high- to low-option plan enrollment. During this time, there was a slight increase in the proportion of clients who received outpatient benefits; however, the aver-age number of visits decreased from 18.9 to 12.8. While benefit coverage was a strong predic-tor of the use of mental health benefits, ethnicity, parent’s education, type of provider, and type of treatment setting were also significant predictors of use. The study found that 2.76 percent of children in FEP used outpatient mental health services in 1983, representing approximately one-half of the proportion of U.S. children estimated to be in acute need. These findings’ impli-cations are discussed in the context of changes in the financing and delivery of mental health services, especially with regard to managed care, and also in the context of the growing pres-sures for national health insurance.
Keyword: children

48. Patterson, D. Y. (1993). Twenty-first century managed mental health: Point-of service treatment networks. Administration and Policy in Mental Health, 21, 27-33.

Many public and private employers now favor the point-of-service (POS) plan that allows the prospective patient to decide at the point of service delivery whether to use a contracted or non-network provider. This article describes the nature of the POS plan and its impact on employers and employees. The author argues that only by developing a POS choice that is cost-neutral to the employer does a managed care network gain the moral authority and leverage to design a high-quality and cost-effective system. The article describes the principles guiding a rationally planned POS system and offers suggestions for internal and external oversight and quality assurance.
Keywords: models, providers

49. Patterson, D. Y. (1990). Managed care: An approach to rational psychiatric treatment. Hospital and Community Psychiatry, 41, 1092-1095.

According to this author, managed care is not necessarily bureaucratic and dehumanizing, nor is it a stop on an inevitable route toward health care rationing or a national health care service. In contrast, he argues, the partnership of the right delivery model and the right providers with the right financial incentives and proper management-consumer oversight can lead to the most rational mental health care delivery possible. A rational mental health care plan requires that a managed system be able to construct the right delivery model, select the appropriate providers, employ judicious financial incentives, and undertake adequate over-sight. The author describes the principles that he would include in an effective delivery model for mental health care.
Keyword: models

50. Patterson, D. Y., & Berman, W. H. (1991). Organizational and service delivery issues in managed mental health services. In C. S. Austad & W. H. Berman (Eds.), Psychotherapy in managed health care: The optimal use of time and resources (1st ed., pp. 19-32). Washington, DC: American Psychological Association.

In this chapter, the authors outline the organizational and structural components of managed mental health care. They examine the types of managed mental health systems and their advantages and disadvantages, the types of benefits and limitations that are likely under various plans, and professional roles and conflicts in managed mental health service delivery. These include referral procedures, staffing patterns, and inpatient and outpatient services.
Keywords: models, staffing

51. Pearson, J. (1992). Managed mental health: The buyer’s perspective. In S. Feldman (Ed.), Managed mental health services (1st ed., pp. 127-142). Springfield, IL: Charles C. Thomas.

Employers are finding that generic utilization review approaches are neither reducing mental health costs nor delivering quality care. The author presents options that exist in managed care, and the questions that employers should consider in deciding whether or not to imple-ment such an approach. This chapter describes the advantages and disadvantages of employee assistance programs, benefit redesign, strengthened existing utilization review, specialty case management, and contracts with a preferred provider organization or exclusive provider organization. The chapter discusses the factors and decision-making process that shape a company’s managed mental health program. The author states that good cost and utilization data are essential in determining how to reimburse a managed care firm and discusses the critical role consultants play in the process of educating their client companies and helping them to select an appropriate managed care firm.
Keywords: overviews, private sector programs

52. Penner, N. R. (1994). The road from peer review to managed care: Historical perspective. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 29-44). Springfield, IL: Charles C. Thomas.

This chapter describes the ways in which both the American Psychiatric Association and American Psychological Association were pioneers in the managed mental health field through the development of the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). The authors highlight the program’s potential to provide the profes-sions with the opportunity to shape the development of both public and private mental health service delivery systems, as well as the program’s potential to create a system of public accountability. The chapter describes the associations’ loss of this program and reduced influence in shaping current managed systems.
Keyword: overviews

53. Pfaum, B. B. (1991). Seeking sane solutions: Managing mental health and chemical dependency costs. Employee Benefits Journal, 31-40.

Studies have shown that mental illness and chemical dependency disorders are undertreated and that treatment for these disorders is generally not delivered efficiently. Increasingly, employers are recognizing the indirect costs of mental illness and chemical dependency disor-ders, such as increased absenteeism, lower productivity, and increased utilization of other health plan benefits. This article discusses some of the factors that companies should consider in designing a managed care program. Such a program should provide full coverage, control access to care, facilitate early intervention, use alternative care to assist "high" users, and apply appropriate screening criteria. The article also discusses factors to consider in using an employ-ee assistance program, a utilization review, a preferred provider organization, or a carve-out are also discussed. The author argues that these options can be used together, and outlines the issues employers should consider in using HMOs to control mental health and chemical dependency treatment costs.
Keywords: costs, overviews, private sector programs, substance abuse

54. Rodriguez, A. R. (1994). Mental health services under health reform: The less government, the better. Managed Care Quarterly, 2(2), 10-12.

The author of this viewpoint article asserts that current health care reform proposals in favor of government-backed managed competition are not in the best interest of patients. Such pro-posals will lead to increased cost and inefficiencies and decreased access to care. The author advocates for privately managed mental health programs which he believes have already demonstrated their efficiency in decision making, their economies of operation, their accounta-bility to multiple constituencies, and their commitment to quality of service.
Keywords: health care reform

55. Rogerson, C. L. (1994). Information system requirements for managed care programs. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 193-204). Springfield, IL: Charles C. Thomas.

This chapter describes the importance of automating operations and program activities for managed care companies. The author discusses several functions of an automated system and offers guidelines for setting up such a system. He argues that while it is possible to operate a small managed care program without an integrated information system, efficiency will be nev-ertheless hampered.
Keywords: information systems

56. Rosenbaum, S., Shin, P., Zakheim, M. H., Shaw, K., & Teitelbaum, J. B. (1998). Special report of negotiating the new health system: A nationwide study of Medicaid managed care contracts. Washington, DC: George Washington University Center for Health Policy Research.

This special report analyzes Medicaid managed care contracts specific to mental illness and addiction disorders. The report analyzes 54 contracts and related documents, 12 of which were managed behavioral health care contracts that were in effect at the beginning of 1997. Although this report considers Medicaid contracts, the authors contend that its findings are relevant to all public purchasers of managed care services for mental illness and substance abuse populations because, like Medicaid, these other sources of third-party payment have tra-ditionally supported services that may or may not be customary for the insurance industry to support. The report’s findings indicate that States are making an effort to design managed care systems that function well for children and adults, but it also highlights the perceived inade-quacies in the contracting abilities of public purchasers such as managed behavioral health care carve-out contracts, which are frequently vague.
Keywords: contracting, Medicaid, public sector, substance abuse

57. Rosenbaum, S., Silver, K., & Wehr, E. (1997). An evaluation of contracts between managed care organizations and community mental health and substance abuse treatment and prevention agencies: Vol. 1. Managed care technical assistance series. Rockville, MD: Substance Abuse and Mental Health Services Administration.

This study is designed to help public policymakers, group purchasers, providers, and con-sumers understand the structure and content of provider network agreements between man-aged care organizations and community mental health and substance abuse treatment and pre-vention agencies. From their in-depth analysis of 50 selected contracts, the researchers explain various aspects of contract provisions, including services, the duty to treat patients, the necessi-ty of prior authorization, medical necessity, capitation agreements, fee-for-service agreements, coordination of benefits, and numerous other clauses of the contracts. The paper includes conclusions, recommendations, and two appendices covering methodology; the paper also has 28 different tables portraying the results of the study.
Keywords: community providers, contracting, managed behavioral health care organi-zations, substance abuse, technical assistance

58. Roy-Byrne, P., Russo, J., Rabin, L., Fuller, K., Jaffe, C., Ries, R., Dagadakis, C., & Avery, D. (1998). A brief medical necessity scale for mental disorders: Reliability, validity, and clinical utility. The Journal of Behavioral Health Services & Research, 25(4), 412-424.

While managed care organizations (MCOs) use the concept of "medical necessity" to deter-mine whether to authorize treatment for an individual, there is currently no consistent meas-urement of medical necessity for a mental health condition. To address this need, the authors have developed an instrument of 13 items relevant to the concept of medical necessity. In this paper, they describe the medical necessity scale and present findings from their pilot testing of this scale. In a study of 205 patients, they found that the internal consistency reliability and the interrater reliability of the instrument were both acceptable. They conclude that the instrument is able to measure the multiple aspects of a patient’s condition needed to make decisions on medical necessity, although they advocate further studies with different patient populations and staff interviewers to determine whether the reliability results are generalizable.
Keywords: medical necessity

59. Savitz, S. A., Grace, J. D., & Brown, G. S. (1993). "Parity" for mental health: Can it be achieved? Administration and Policy in Mental Health, 21, 7-14.

Parity of insurance coverage for psychiatric and physical illness is a major issue in health care reform. Proponents of parity and partial parity, such as the American Psychiatric Association and the National Alliance for the Mentally Ill, argue that coverage for psychiatric and physical illness should be equal with respect to dollar limits, deductibles, and coinsurance. Such an approach is expensive. The authors describe strategies for achieving parity, such as capitation, case management, and the use of provider networks. They propose a model to reduce high uti-lization of unnecessary care, that incorporates managed care strategies for the cost-effective and equitable provision of behavioral health care.
Keyword: parity

60. Schwartz, B. J., & Wetzler, S. (1998). A new approach to managed care: The provider-run organization. Psychiatric Quarterly, 69(4), 345-353.

For many psychiatric hospitals and teaching facilities, managed care has become synonymous with shortened lengths of stay, reduced reimbursement, and the invasion of third-party care managers into the client-patient relationship. In this paper, the authors describe an alternative model to managed care, in which providers contract with HMOs directly, thereby eliminating the need for intermediary managed care organizations. This provider-run, hospital-based approach allows providers to regain control over service delivery. Through the example of one such organization, the authors discuss the philosophy behind this model, the legal structures created to assume the financial risk, provider relationships, recruitment, manage-ment, reimbursement, the treatment paradigm, and the marketing strategies the new model involves. From the utilization data already collected on this organization, the authors demon-strate that utilization in the provider-run approach is consistent with that of a highly managed population.
Keywords: models, providers

61. Sederer, L. I., & Bennett, M. J., (1996). Managed mental health care in the United States: A status report. Administration and Policy in Mental Health, 23(4), 289-306.

The authors review managed mental health care in the United States. The report begins with a brief history of managed mental health care and proceeds to concentrate on six major issues: what is insurable, carve-ins, networks, contract and professional liability, ethics, and support for teaching and research. The report’s final section discusses factors such as utilization man-agement and economies of scale: factors that allowed managed care to achieve savings through 1996. The authors conclude with recommendations to the managed care industry and policy-makers on how best to sustain these cost savings into the future.
Keywords: ethics, liability, overviews, utilization management

62. Sharfstein, S. S. (1988). Changing insurance markets. In D. J. Scherl, J. T. English, & S. S. Sharfstein (Eds.), Prospective payment and psychiatric care (pp. 121-128). Washington, DC: American Psychiatric Association.

The author describes the major trends in third-party financing of health care, in which the third parties are government and business, and not only the insurance industry. These trends include the growth of prospective payment, employer self-insurance, data gathering, both verti-cally and horizontally integrated systems (such as HMOs and hospital chains), and subspecial-ization in the insurance market. The author discusses cutbacks in private coverage resulting from industry fears of adverse selection and moral hazard. Other issues raised in this piece include lack of access, high administrative costs, and the decline of professional autonomy.
Keyword: trends

63. Shueman, S. A., & Troy, W. G. (1994). The use of practice guidelines in managed behavioral health programs. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 149-164). Springfield, IL: Charles C. Thomas.

This chapter provides a historical perspective on the use of practice guidelines in managed behavioral health programs. The authors discuss the evolution of practice guidelines and the rationale for their use. They describe current professional guidelines and their uses in managed behavioral care programs. The chapter also describes implications of practice guidelines in managed mental health programs. The authors speculate about the future development and implementation of practice guidelines.
Keywords: quality assurance, standards of care

64. Shueman, S. A., Troy, W. G., & Mayhugh, S. L. (1994). Principles and issues in managed behavioral health care. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 7-28). Springfield, IL: Charles C. Thomas.

This chapter focuses on the basic principles and key issues in managed behavioral health care. The authors discuss the health services and financing environment that was in place before the 1980s, which provided the foundation for managed care. Some specific cost and quality-of-care issues are discussed as well as innovative strategies to manage the behavioral health serv-ice system. The chapter concludes with a discussion of some of the challenges to managed behavioral health care companies.
Keyword: overviews

65. Smukler, M., Sherman, P. S., Srebnik, D. S., & Uehara, E. S. (1996). Developing local service standards for managed mental health services. Administration and Policy in Mental Health, 24(2), 101-116.

Capitated community mental health models may create incentives to withhold care. This study describes a method for eliminating this problem by creating standards for minimal levels of care. These standards, or Recommended Service Levels (RSLs), were created to test for the minimum, appropriate services for consumers at several levels of need. The RSL project was executed in five stages: (1) organizing the project participants, including an oversight commit-tee and a clinical-expert panel; (2) developing RSLs based on provider recommendations for specific consumer groups and the appropriate level of services for them, in order to achieve acceptable outcomes for these groups; (3) creating an assessment instrument that could catego-rize consumer groups based on the level of services; (4) creating a decision tree that would allow assessment data to categorize a consumer for the appropriate RSL; and (5) testing the RSL in a sample of consumers. The field-test results showed that the RSL method has promise, but that it needed to include the consumer in the RSL process; manage the tension between developers of local standards and the managed care entity responsible for funding the service system; and validate the RSL standards through outcomes data.
Keywords: standards of care

66. Spiro, A. H. & Stokes, L. Q. (1991). A multifaceted approach to managed mental health care. American College of Medical Quality, 6(2), 54-58.

This article describes how an Independent Physicians Association (IPA) Model HMO with approximately 100,000 members manages its own mental health utilization. The system revolves around highly trained case managers who are granted tremendous leeway in directing patients toward appropriate care. These care managers use flexible benefits, such as 100 per-Special managed mental health programs. The authors speculate about the future development and implementation of practice guidelines.
Keywords: quality assurance, standards of care

64. Shueman, S. A., Troy, W. G., & Mayhugh, S. L. (1994). Principles and issues in managed behavioral health care. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 7-28). Springfield, IL: Charles C. Thomas.

This chapter focuses on the basic principles and key issues in managed behavioral health care. The authors discuss the health services and financing environment that was in place before the 1980s, which provided the foundation for managed care. Some specific cost and quality-of-care issues are discussed as well as innovative strategies to manage the behavioral health serv-ice system. The chapter concludes with a discussion of some of the challenges to managed behavioral health care companies.
Keyword: overviews

65. Smukler, M., Sherman, P. S., Srebnik, D. S., & Uehara, E. S. (1996). Developing local service standards for managed mental health services. Administration and Policy in Mental Health, 24(2), 101-116.

Capitated community mental health models may create incentives to withhold care. This study describes a method for eliminating this problem by creating standards for minimal levels of care. These standards, or Recommended Service Levels (RSLs), were created to test for the minimum, appropriate services for consumers at several levels of need. The RSL project was executed in five stages: (1) organizing the project participants, including an oversight commit-tee and a clinical-expert panel; (2) developing RSLs based on provider recommendations for specific consumer groups and the appropriate level of services for them, in order to achieve acceptable outcomes for these groups; (3) creating an assessment instrument that could catego-rize consumer groups based on the level of services; (4) creating a decision tree that would allow assessment data to categorize a consumer for the appropriate RSL; and (5) testing the RSL in a sample of consumers. The field-test results showed that the RSL method has promise, but that it needed to include the consumer in the RSL process; manage the tension between developers of local standards and the managed care entity responsible for funding the service system; and validate the RSL standards through outcomes data.
Keywords: standards of care

66. Spiro, A. H. & Stokes, L. Q. (1991). A multifaceted approach to managed mental health care. American College of Medical Quality, 6(2), 54-58.

This article describes how an Independent Physicians Association (IPA) Model HMO with approximately 100,000 members manages its own mental health utilization. The system revolves around highly trained case managers who are granted tremendous leeway in directing patients toward appropriate care. These care managers use flexible benefits, such as 100 per-Special cent outpatient care coverage, to reduce hospital use. The program also implements PATH (Projects for Assistance in Transition from Homelessness), a crisis intervention team of clinical psychologists that provides care in the home. An outside psychiatrist reviewer and psychiatric case manager monitor inpatient care, authorize lengths of stay, and precertify admissions. The program has resulted in dramatic decreases in hospital utilization.
Keywords: case management, utilization management

67. Sturm, R. (1997). How expensive is unlimited mental health care coverage under managed care? Journal of the American Medical Association, 278(18), 1533-1537.

This article analyzes data on behavioral health utilization for 24 new managed care plans in 1995 and 1996 and estimates the costs of removing different coverage limits for behavioral health as required by the Mental Health Parity Act. The data were obtained from the UCLA/ RAND Research Center on Managed Care and purposely analyze managed behavioral health carve-out plans that offered more generous coverage than discussed during the parity legisla-tion debate. The author concludes that the policy decisions that gave rise to the Mental Health Parity Act might have been based on incorrect assumptions and outdated data, which led to dramatic overestimates. For mental health care, the consequences of improved coverage under managed care are relatively minor. Keywords: carve-outs, costs, economics, legislation, parity

68. Substance Abuse and Mental Health Services Administration. (1997). An evaluation of contracts between state Medicaid agencies and managed care organizations for the prevention and treatment of mental illness and substance abuse disorders: Vol. 2. Managed care technical assistance series. Rockville, MD: Substance Abuse and Mental Health Services Administration.

This study provides a point-in-time examination of service agreements in operation at the end of 1995 between State Medicaid agencies and managed care organizations to provide mental health and substance abuse services. This study represents a review of Medicaid comprehen-sive- risk agreements and requests for proposals from approximately 35 States. The contracts reviewed include general service agreements covering primary health and several behavioral health care carve-out contracts. This study concludes that the behavioral health care market would benefit from the development of recommended specifications for managed care on treat-ing and preventing mental health and substance abuse disorders, since these treatment initia-tives were not in the normal domain of older commercial insurance concepts of coverage.
Keywords: carve-outs, contracting, Medicaid, public sector, substance abuse, technical assistance

69. Weiner, R. B., & Siegel, D. (1989). Managed mental health care issues and strategies. Benefits Quarterly, 5(3), 21-31.

This article examines the scope of the problem of rising mental health and substance abuse costs and the strategies that employers can use to reduce these costs. Cost increases, both direct and indirect, are attributed to several causes: increased demand for expanded benefits, excess supply of providers, ineffective benefit design, and lack of standards for diagnosis and treat-ment. The authors describe five cost containment strategiesÑrestrictive/limited benefits, utiliza-tion management, employee assistance programs, carve-outs, and provider networksÑand the factors employers should consider in selecting a strategy. Employers are urged to be flexible so that strategies reflect the changing needs of their workers.
Keyword: costs

70. Wells, K. B., Hosek, S. D., & Marquis, M. S. (1992). The effects of preferred provider options in fee-for-service plans on use of outpatient mental health services by three employee groups. Medical Care, 30, 412-424.

This quasi-experimental comparison-group study tests two hypotheses. The first is that employees who use preferred provider organizations (PPOs) are more likely than those enrolled in fee-for-service plans to use outpatient mental health care. The second hypothesis is that employees enrolled in PPOs will use less mental health services in general than those in fee-for-service plans. Use patterns before and after PPO implementation are compared for three PPOs. A survey of 8,828 employees was conducted to evaluate intentions to use PPO providers. Intention was measured using a battery to determine each respondent’s usual source of medical care before and after PPO implementation. The study found that intent to use PPOs did not significantly affect the probability of use of outpatient mental health servic-es because of access barriers and referral patterns by PPOs. Finally, the study found that PPO members use less outpatient mental health services than non-PPO members, despite lower cost-sharing for services received from PPO providers.
Keywords: PPOs, utilization

71. Wells, K. B., Manning, W. G., & Valdez, R. B. (1990). The effects of a prepaid group practice on mental health outcomes. Health Services Research, 25, 615-625.

The study uses data from the RAND Health Insurance Experiment to test the hypothesis that there is a difference in mental health outcome between those enrolled in HMOs and those enrolled in comparable fee-for-service plans. Families in the Seattle area were randomly assigned to either the Group Health Cooperative of Puget Sound (a prepaid group practice), to a fee-for-service plan with a family coinsurance rate of 0 percent, or to family pay plans with coinsurance rates of 25 percent, 30 percent, or 95 percent for outpatient mental health services. Mental health status was assessed at enrollment and at the end of each year of par-ticipation. The study found no statistically significant or clinically meaningful differences in mental health outcomes among these groups. The authors argue that the less intensive style of treatment in the prepaid group practice was not associated with noticeably worse mental health outcomes.
Keywords: HMOs, outcomes

72. Wells, K. B., Marquis, M. S., & Hosek, S. D. (1991). Mental health and selection of preferred providers: Experience in three employee groups. Medical Care, 29, 911-924.

This study examines the effects of mental health status and the prior use of mental health services on provider selection by employees enrolled in fee-for-service plans with a preferred provider organization (PPO). For the study, claims and survey data were obtained from three large employee groups. The authors found that among persons who used mental health serv-ices after implementation of the PPO, those who had previously visited providers who subse-quently became part of the PPO panel tended to stay with those PPO providers. On the other hand, those who previously visited providers who did not later join the panel did not select from PPO providers for mental health care. The study demonstrates the importance of the patient-provider relationship in the selection of a mental health provider.
Keywords: PPOs, providers

73. White, K., & Shields, J. (1991). Conversion of inpatient mental health benefits to outpatient benefits. Hospital and Community Psychiatry, 42, 570-572.

This article uses a case-study approach to describe how the conversion of inpatient to out-patient mental health benefits can lead to cost savings as well as to improved mental health outcomes. In 1987, Blue Cross-Blue Shield of Massachusetts revised the contract of a benefi-ciary who had used extensive inpatient treatment for multiple psychiatric diagnoses. During 1986 alone she had admissions costing over $100,000. In-between hospitalizations, she used day treatment and lived in a halfway house. In 1987, her contract was revised to cover a vari-ety of outpatient services including the halfway house, supplementary day treatment, and an activity program. This revision eventually led to a cost of approximately $33,000 that year: a considerable savings compared to the previous contract. The patient also showed marked improvement. The authors attribute this to several factors including the use of new drugs and behavioral therapy, an individualized program at the halfway house, and the use of a nurse case manager both to assess treatment successes and failures and to work with the patient’s family. The authors conclude that better funding and utilization of outpatient services may be cost-effective and also lead to improved outcomes.
Keywords: costs, outcomes

74. Wise, R. A. (1992). Managed care of the acutely ill psychiatric patient: Development of a new delivery system. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 375-384). Washington, DC: American Psychiatric Press.

This chapter focuses on the challenging problems of caring for the acutely psychiatrically ill patient who often consumes a disproportionate percentage of treatment time and resources. The author reviews some current methods for managing the inpatient benefit for these patients. He suggests a new system that can improve efficiency by more closely matching resources to patient needs through alternative-to-hospital programs in conjunction with hospital care. He describes the specific goals and some effective strategies that were developed at a staff model HMO. He argues that managed care settings are best suited to explore alternative-to-hospital programs, and that as the success of these programs is better documented, other payors will be more willing to reimburse for this type of care.
Keywords: serious mental illness

75. Wolfe, H. L., Astrachan, B. M., & Scherl, D. J. (1988). Psychiatric practice in organized health and proprietary care systems. In D. J. Scherl, J. T. English, & S. S. Sharfstein (Eds.), Prospective payment and psychiatric care. Washington, DC: American Psychiatric Association.

This chapter summarizes organized systems of care approaches to controlling mental health costs. The authors describe the development, strengths and weaknesses of HMOs, preferred provider organizations, employee assistance programs, and "multis"(multi-institutional corpo-rations). The authors describe the practical and ethical implications of these payment systems for psychiatrists, patients, and society at large. They conclude that the American Psychiatric Association must focus attention on the issues of practice in organized settings and on the nature and ethics of organizational practice.
Keywords: costs, EAPs, ethics, HMOs, PPOs

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This page was last reviewed by Dr Greg Mulhauser, Thursday, 14 October 2021.