Annotated Bibliography - Health Maintenance Organizations

This special supplementary section of the 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

Health Maintenance Organizations (HMOs)Section Title

142. Altman, L., & Goldstein, J. M. (1988). Impact of HMO model type on mental health service delivery: Variation in treatment and approaches. Administration in Mental Health, 15, 246-261.

This paper reports on a descriptive and exploratory study that compares mental health services availability and actual clinical practice across different HMO models. The authors hypothesize that differences in the financial and institutional feature of HMOs influence treatment and practice. Clinicians, managers, and chiefs in six HMOs in a Northeastern State were inter-viewed. HMOs were stratified and randomly selected to represent three model types: staff, group (including network model), and independent practice association. There were no signifi-cant differences between HMO model types in mental health benefits, except in number of days for outpatient substance abuse treatment. There were differences, however, in organiza-tional characteristics, provider characteristics, and benefit design. Findings from this research are consistent with other studies that show that in comparison to fee-for-service models, the organizational and financial structure of HMOs influences provider response and utilization patterns. Keyword: HMOs

143. Barglow, P., Chandler, S., Molitor, N., & Offer, D. (1992). Managed psychiatric care for adolescents: Problems and possibilities. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 261-271). Washington, DC: American Psychiatric Press.

The authors of this chapter describe the philosophy and psychiatric benefits for adolescents in the Humana Michael Reese HMO. They argue that with carefully managed inpatient and 57outpatient treatment plans, the vast majority of adolescents who need psychiatric care can benefit from short-term interventions. They describe the characteristics of the psychiatric acute care unit and the adolescent intensive treatment program that comprise the core of treatment options for this client population. The results of a client (adult care providers) satisfaction survey are presented as are several components that the authors feel are responsible for good client outcomes.
Keywords: children, HMOs

144. Bennett, M. J. (1988). The greening of the HMO: Implications for prepaid psychiatry. American Journal of Psychiatry, 145, 1544-1549.

This article discusses the history of the HMO, focusing on its evolution from a social to an economic movement. In particular, the author describes the role of psychiatry within a prepaid structure. He anticipates the ways in which psychiatry may change in the future and suggests that psychiatrists be trained in order to adapt to the growing emphasis on cost control, out-comes, and the economics of health care.
Keywords: HMOs, overviews, trends

145. Bennett, M. J. (1992). Managed mental health in health maintenance organizations. In S. Feldman (Ed.), Managed mental health services (1st ed., pp. 61-82). Springfield, IL: Charles C. Thomas.

Current trends in managed mental health are discussed in the context of the history of the HMO concept and movement. Prepayment and group practice developed in the late nineteenth century to deliver service to workers in rural areas and union laborers. HMOs became legiti-mate with the passage of the 1973 HMO Act. Mental health benefits and services gradually expanded because of legislative mandates and research demonstrating its effectiveness. The closed-panel HMO became a distinct form of mental health practice, emphasizing brief treat-ment and collaboration. The chapter describes trends in HMO structure, such as the prolifera-tion of "open systems" (Independent Physicians Associations and preferred provider organiza-tions) and the implications of managed care and subcontracting. HMOs are increasingly profit driven and professionalized. The current patterns of mental health care provision and use are discussed. The author anticipates that there will be increasing emphasis on population-based care and consumer education, and states that the goals of accessibility and affordability have yet to be realized.
Keywords: HMOs, overviews, trends

146. Bennett, M. J. (1993). View from the bridge: Reflections of a recovering staff model HMO psychiatrist. Psychiatric Quarterly, 64(1), 45-75.

This article reviews the origin and development of managed mental health care, from the "pure" prepaid practice paradigm to the current focus on utilization review, case manage-ment, discounted fees, and network development and management. The second part of the article describes the current emphasis in health care that reflects a shift from containing costs to assessing and monitoring outcomes. In response, managed care companies are shifting from quality assurance to quality enhancement. The article concludes by anticipating seven future trends and describing the pitfalls that we must overcome in order to create a mental health system that is equitable, efficient, and effective.
Keywords: HMOs, trends

147. Bloom, B. L. (1990). Managing mental health services: Some comments for the overdue debate in psychology. Community Mental Health Journal, 26, 107-124.

This article describes the similarities and differences between the three most prominent models of mental health services: the preferred provider organization (PPO), the comprehensive HMO, and the managed mental health care organization (MMHCO) in terms of organization, servic-es provided, and degree of choice provided to the patient. The author suggests that of the three, the HMO model, because of its integration of physical and mental health services and focus on a managed model of service delivery, may have the greatest potential for survival as a model of health care delivery. He concludes with a discussion of the types of training and skills that psychologists must have in order to survive in this era of managed mental health care.
Keywords: HMOs, managed behavioral health care organization, training

148. Bonstedt, T. (1992). Managing psychiatric exclusions. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 69-82). Washington, DC: American Psychiatric Press.

This chapter examines the types of psychiatric exclusions that exist in HMOs. These include exclusions based on diagnosis, duration of illness, number/duration of hospitalizations, recent utilization of psychiatric benefits in the plan, degree of disability, substance abuse, and others. The author reviews the ideological premises and the impact of exclusions. He argues that in the current managed care climate, psychiatric exclusions are likely to proliferate unless research demonstrates that providing psychiatric care for specific clinical conditions produces a significant offset effect. The author concludes that psychiatric exclusions are a necessary but unfortunate "cap" on clinical care in a managed system. Keyword: HMOs

149. Carson, D. (1992). Setting up provider networks and PPOs. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 99-109). Washington, DC: American Psychiatric Press.

This chapter describes the features of preferred provider organizations (PPOs) that distinguish them from health maintenance organizations (HMOs). The two most basic ways in which PPOs differ from HMOs is that they reimburse providers on a fee-for-service basis and they offer sub-scribers the opportunity to select a designated or nonparticipating provider. Some components of PPOs are the financial incentives to influence provider choice, discount pricing for hospital rates, utilization review, and emphasis on reducing inpatient treatment through comprehensive and accessible outpatient services. The author explores some of the unanswered questions regarding the effectiveness of PPOs and addresses some of the inherent problems of PPOs.
Keywords: HMOs, PPOs

150. Christianson, J. B., & Osher, F. C. (1994). Health maintenance organizations, health care reform, and persons with serious mental illness. Hospital and Community Psychiatry, 45(9), 898-905.

Under the Clinton Administration’s 1994 Health Security Act, Medicaid-eligible individuals who did not receive cash assistance would be represented by regional alliances that would contract with health plans. Because this population has a relatively high incidence of serious mental illness and HMOs would be the lowest cost alternative, it seemed the Health Security Act could result in an increase of HMO enrollment for the seriously mentally ill. In this paper, the authors examine studies of the mental health status and outcomes of seriously mentally ill individuals treated by HMOs, focusing on the limitations in the available research for predicting the likely effects of health care reform. They also describe the specific compo-nents of the Health Security Act that would influence individuals with serious mental illness who were treated within an HMO. In order to gain a more complete understanding of the impact of health care reform on mental health care for individuals with serious mental illness, the authors argue for additional research in the areas of current service capacity of HMOs, treatment approaches and outcomes in different HMO models, whether seriously mentally ill individuals would choose to enroll in an HMO, and whether HMO enrollees with higher incomes would seek care outside the networks.
Keywords: HMOs, outcomes, serious mental illness

151. Christianson, J. B., Wholey, D., & Peterson, M. S. (1997). Strategies for managing service delivery in HMOs: An application to mental health care. Medical Care Research and Review, 54(2), 200-222.

In this article, the researchers examine the problems facing HMO managers as they develop strategies that combine financial incentives for providers with other mechanisms to influence service delivery. Through two empirical analyses, they identify strategies used by HMOs in managing service delivery, as well as explain the relationship of HMO strategies with market characteristics. In the first part of the analysis, the authors highlight market strategies includ-ing payment methods, supervision of service delivery, limitations in coverage, and restrictions on access. The authors conclude that HMOs do not rely on one mechanism to manage care, but instead choose clusters of tactics that form one set of organizational strategies. From the second part of the analysis, the authors find that strategies used by HMOs to manage mental health care are related to the interaction of HMO-type and various market characteristics, including competition and utilization of care.
Keywords: HMOs, overviews

152. DeLeon, P. H, Bulatao, E. Q., & VandenBos, G. R. (1994). Federal government initiatives in managed health care. In S. A. Shueman, W. G. Troy, & S. L. Mayhugh (Eds.), Managed behavioral health care: An industry perspective (pp. 97-112). Springfield, IL: Charles C. Thomas.

See DeLeon, VandenBos, and Bulatao, 1991 (reference number 154) for annotation.

153. DeLeon, P. H., & VandenBos, G. R. (1991). Psychotherapy in managed health care: Integrating federal policy with clinical practice. In C. S. Austad & W. H. Berman (Eds.), Psychotherapy in managed health care: The optimal use of time and resources (1st ed., pp. 251-263). Washington, DC: American Psychological Association.

This chapter is a version of the article "Managed mental health care: A history of the federal policy initiative" by Patrick H. DeLeon, Gary VandenBos, and Elizabeth Q. Bulatao, which was published in 1991. The section on clinical practice in HMOs is expanded in this chapter. See DeLeon, VandenBos, and Bulatao, 1991 (reference number 154) for the annotation.

154. DeLeon, P. H., VandenBos, G. R., & Bulatao, E. Q. (1991). Managed mental health care: A history of the federal policy initiative. Professional Psychology Research and Practice, 22, 15-25.

This article traces the history of HMOs, focusing on key Federal legislative efforts to promote and shape HMOs. The HMO Act of 1973 provided funding for the development of new HMOs, and subsequent amendments of the Act addressed the need to ensure quality and to help HMOs be competitive in the marketplace. The article also describes the CHAMPUS Reform Initiative of 1986, in which the Department of Defense successfully reduced its men-tal health costs. Studies of the trends in HMOs are reviewed, such as the growth of for-profit HMOs, and the shift from local to multistate HMO networks. The authors discuss the pro-vision of mental health in HMOs and the concerns of psychologists such as limits on number of sessions, poor utilization review, and lack of educational efforts to help members use the system. They also review several major studies demonstrating that mental health care in HMOs is equally or more effective than mental health care in other settings, and may help reduce medical costs.
Keywords: HMOs, overviews

155. DeLeon, P. H., VandenBos, G. R., & Bulatao, E. Q. (1994). Managed mental health care: A history of the federal policy initiative. In R. L. Lowman & R. J. Resnick (Eds.), The mental health professional’s guide to managed care (pp. 19-40). Washington, DC: American Psychological Association.

See DeLeon, VandenBos, and Bulatao, 1991 (reference number 154) for annotation.

156. Dial, T. H., Bergsten, C., Kantor, A., Buck, J. A., & Chalk, M. E. (1996). Behavioral health care in HMOs. In R. W. Manderscheid & M. A. Sonnenschein, (Eds.), Mental Health, United States, 1996 (pp. 45-57). Rockville, MD: Center for Mental Health Services.

This chapter describes the delivery system of HMOs and specifically explores two topics related to HMOs’ provision of behavioral health care. The first concerns clinical staffing levels of physicians and nonphysician mental health providers in HMOs. The authors report on a study conducted by the Group Health Association of America on clinical staffing ratios in a representative sample of staff- and group-model HMOs, and present data on the ratio of full-time-equivalent (FTE) psychiatrists per 100,000 HMO members, of FTE nonphysician mental health providers per 100,000 HMO members, and of nonphysician mental health providers to psychiatrists in those HMOs. In the second part of the chapter, the authors provide information on HMO benefits for mental health care and on the utilization of such services for 1989 and 1993.
Keywords: HMOs, staffing, trends

157. Dorwart, R. A., & Epstein, S. S. (1992). Economics and managed mental health care: The HMO as a crucible for cost-effective care. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 11-27). Washington, DC: American Psychiatric Press.

This chapter provides an overview of the economics of mental health care with special attention to the dynamics of the HMO model of service provision. The authors describe several economic concepts, distinguish between need and demand for medical services, and discuss the more recent methods to control supply of services. They discuss several major trends in mental health care such as deinstitutionalization and community mental health care, privatization and growth of private psychiatric hospitals, and investor-owned companies. The authors argue for more and better studies of HMO psychiatry that include measures of quality of care in order to assess whether HMO psychiatry is a healthy trend that will improve services, or an unhealthy one that reduces utilization rates but has little beneficial impact on clients’ well-being.
Keywords: economics, HMOs, trends

158. Durham, M. L. (1995). Commentary: Can HMOs manage the mental health benefit? Health Affairs. 14(3), 116-123.

This author raises concerns about the impact of managed care on the treatment of mental ill-ness based on the following factors: these services present a high degree of financial risk to HMOs, more responsibility is shifted to primary care providers (PCPs) to diagnose and treat mental illness in HMOs, and there is evidence that PCPs in HMOs are less likely to detect mental illness in their patients. The author goes on to discuss lessons that have been learned thus far in the shift to managed mental health care. Managed care’s potential for population-based management is described as a potential advantage for effective screening for conditions and planning of staffing levels, treatment resources, etc. With regard to financing, the author sees systems that link payment to outcomes data as being advantageous, while raising concerns about financial barriers created by HMOs. As HMOs take in more and more members of high-risk populations, the author argues that the system will need to adapt itself to one that can provide the specialized services needed by these individuals. Keyword: HMOs

159. Fink, P. J., & Dubin, W. R. (1991). No free lunch: Limitations on psychiatric care in HMOs. Hospital and Community Psychiatry, 42, 363-365.

This article is a case study of the experiences of a private psychiatric hospital that subcontract-ed with a psychology group for hospital care for HMO patients. Severe problems arose as the number of admissions to the hospital from contracted outpatient therapists was twice as much as the number of admissions that was expected. This unexpected number of admissions was in part due to the lack of a hospital-based evaluation unit for triage, expectations by patients and their families that their HMO benefits guaranteed 30 days of hospital care, and the inability of the hospital to exert control over referrals from the community-based therapists. These factors contributed to a breakdown in communications between the hospital and HMO. The article describes the authors’ understanding of the pitfalls of capitation arrangements for psychiatric hospitals and for beneficiaries with severe mental illness.
Keywords: capitation, HMOs, serious mental illness

160. Goldman, W. (1988). Mental health and substance abuse services in HMOs. Administration in Mental Health, 15, 189-200.

This article collates and presents current information about how mental health and substance abuse care is being designed and provided in HMOs. The author provides an overview of HMOs including type of benefits generally offered, locus of care, staff and staff mix, treatment type, patterns of utilization, and cost. The chapter concludes that HMOs have the potential for providing high-quality and comprehensive mental health and substance abuse services that are also cost-effective.
Keywords: HMOs, overviews, substance abuse

161. Hodgkin, D., Horgan, C. M., & Garnick, D. W. (1997). Make or buy: HMOs’ contracting arrangements for mental health care. Administration and Policy in Mental Health, 24(4), 359-376.

This article explores HMO contracts with external vendors for mental health care versus an internal mental health care department. The first part of the article covers the content of external contracts and the current reasons for external contracting of mental health services. Then the authors develop factors that will influence the HMO’s decisions about internal or external mental health care. The factors, which are based on economic theory, include operating costs, administration costs, monitoring costs, the shift of risk onto vendors, how contracting choices affect value to purchaser, and competitive pressure from emerging man-aged behavioral health firms. Lastly, factors are used to create a new hypothesis and evidence to explain HMO contracting choices and their implications in cost and quality of care.
Keywords: carve-outs, contracting, HMOs, integration

162. Hornbrook, M. C. (1988). Mental health services in HMOs: An oxymoron? Administration in Mental Health, 15, 236-245.

The author describes the significant difference in the level of HMO coverage of alcoholism, drug abuse, and mental illness (ADM) and medical care. He argues that the "medical-mental schism" may prevent development of integrated biopsychosocial treatments; thus HMOs may be more like fee-for-service arrangements. The author identifies four approaches to rationing ADM services including omitting coverage of mental illness; pricing copayments so as to discourage use; using queues to encourage drop-outs; and using professional criteria ration services on the basis of expected therapeutic benefit. He concludes that HMOs should work toward the goal of parity in coverage of mental and medical conditions, and argues that the costs of this relative expansion can be met through the offset effect and increases in charges for medical services. Keyword: HMOs

163. Hyde, P. (1996). Creating incentives for the delivery of services. New Directions for Mental Health Services, 27, 25-33.

This article discusses four measures that are being explored to provide incentives to HMOs to take responsibility for providing care to populations with the most difficult and costly disorders: adults with serious and persistent mental illness, children and adolescents who are seriously emotionally disturbed, and addicted individuals. These measures are eligibility standards, structural approaches to system organization, financial incentives, and advocacy. The authors discuss a number of techniques for implementing eligibility standards and several different approaches to system organization that provide positive incentives to care for these high-need individuals. The authors go on to provide examples of eight financial arrangements which, when used in combination with eligibility standards and structural approaches, can encourage providers to provide services to those most in need. Lastly, mechanisms must be in place that allow consumers and their families to advocate for appropriate and adequate services, such as representation on governing boards and advisory groups, education, and grievance and appeal processes.
Keywords: economics, HMOs, serious mental illness

164. Johnson, R. E., & McFarland, B. H. (1994). Treated prevalence rates of severe mental illness among HMO members. Hospital and Community Psychiatry, 45(9), 919-924.

The debate concerning the ability of HMOs to adequately provide for mental health services for individuals with severe and chronic mental illness exists throughout the health care system. Are HMOs skimming off healthy individuals for membership and excluding those with chronic conditions like serious mental illness (SMI)? In this study, the researchers examine the treated prevalence rates of two serious mental illnessesÑschizophrenia and bipolar disorderÑamong members of a large, group practice HMO and compare these rates with national rates from the Epidemiologic Catchment Area (ECA) survey. Results indicate that there is a significantly lower treated prevalence rate of schizophrenia among HMO members than in the ECA survey. The treated prevalence rate of bipolar disorder is also lower among HMO members, but the difference is not significant. The researchers conclude that the differences in treatment preva-lence rates result from both different study methodologies and different factors influencing HMO membership. They argue for additional research of the course of SMI among HMO members.
Keywords: HMOs, serious mental illness

165. Langman-Dorwart, N., & Peebles, T. (1988). A comprehensive approach to managed care for mental health. Administration in Mental Health, 15, 226-235.

This paper discusses the key components of a comprehensive mental health management approach. The authors argue that maintaining quality of care while containing costs is a challenge; however, it is one that can be met with a comprehensive approach that includes these three components: prescreening of admissions; maintaining a network of preferred provider contracts; and concurrent utilization review and individual case management. The article uses a case study approach to describe the ways in which one group network model HMO improved access for clients, maintained consistent criteria of care, reduced costs, and improved treatment outcomes. The HMO created a separate mental health and substance abuse department, which established a preferred provider network and offered case management to patients in contracted facilities. They report that savings to the plan for the first year of operation was approximately $300,000 in saved admissions alone.
Keywords: case management, HMOs, PPOs, utilization management

166. Lazarus, A. (1994). Disputes over payment for hospitalization under mental health "carve-out" programs. Hospital and Community Psychiatry, 45, 115-116.

Five cases are employed to demonstrate the potential problems with the carve-out approach to mental health care. In three of these cases, a patient was admitted to a general hospital for medical problems. Psychiatric problems either were present at hospitalization or developed subsequently while the patient was still in the hospital. In each of these cases, the HMO felt that the managed mental health care company was responsible for some or all of the cost of treatment, arguing that the patient’s condition did not warrant acute medical attention. The author concludes that these vignettes demonstrate the downside of carve-outs, that HMOs and their managed care vendors must strive to overcome the barriers to integration, and that more empiric research is needed to determine the nature and frequency of such problems and mechanisms for resolving these disputes.
Keywords: carve-outs, HMOs, managed behavioral health care organizations

167. Levin, B. L., & Glasser, J. H. (1992). Comparing mental health benefits, utilization patterns, and costs. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 29-52). Washington, DC: American Psychiatric Press.

The authors report recent findings from a national study that examined the organizational structure, benefits coverage, costs, and utilization of mental health services within HMOs. This study examined levels of participation by HMOs in providing mental health benefits, reviewed the kinds of organizational models used by HMOs that provide mental health services, and identified factors associated with the level of coverage, costs, and utilization of these services. Out of 424, 324 HMO administrators responded to a 36-question mail questionnaire that asked about HMO characteristics, mental health service coverage and benefits, organizational structure, costs, and utilization of services. The authors found that while most HMOs provide a minimum level of mental health coverage, the fiscal, organi-zational, and service delivery arrangements for providing coverage reflect a great deal of diversity among organizations.
Keywords: costs, HMOs, utilization

168. Marshall, P. E. (1992). The mental health HMO: Capitation funding for the chronically mentally ill. Why an HMO? Community Mental Health

Journal, 28, 111-120. This article describes an HMO capitation project for chronically mentally ill persons currently being tested in Monroe and Livingston Counties in New York State. The author reports that the project can remain financially solvent because the projected expenses are based on known costs of services needed by seriously mentally ill patients, with the capitation rate based on a "sickest person" scenario rather than insurance industry actuarial data. This approach uses both case management in addition to a financial system with funding that follows patients into the community. The project has shown to improve patient functioning and reduce the cost of community care for chronically mentally ill persons.
Keywords: capitation, HMOs, New York, public sector, serious mental illness

169. McFarland, B. H. (1994). Health maintenance organizations and persons with severe mental illness. Community Mental Health Journal, 30(3), 221-242.

In an era of health care reform, one of the only apparent certainties is the continuation of the rapid growth of HMOs. Although HMOs currently focus on treatment for physical health services, the mental health industry is facing the same rapid increase in costs. This paper examines the impact that HMOs could have on the mental health industry and, in particular, how HMO penetration could affect treatment for the seriously mentally ill (SMI) population. The author reviews the basic components of an HMO, the current structure for provision of mental health services, and the results of studies concerning the impact of capi-tated rates on mental health care for SMI. He concludes that while integrating mental health services for persons with serious and persistent mental disorders can be challenging to an HMO, it is possible if the public and private components are well coordinated and adequately funded. He argues for further research concerning the level of consumption of care by the SMI when enrolled in HMOs, the likelihood of HMOs "dumping" the SMI population into the public stream, and the method for developing capitated rates for such treatment.
Keywords: capitation, HMOs, serious mental illness

170. McFarland, B. H., Johnson, R. E., & Hornbrook, M. C. (1996). Enrollment duration, service use, and costs of care for severely mentally ill members of a health maintenance organization. Archives of General Psychiatry, 53, 938-944.

This study attempts to address increasing concerns about the adequacy of capitated health plans in providing services to the seriously mentally ill (SMI). The researchers compare HMO enrollment duration, private and public service utilization, and HMO costs of care for a target group of 250 adults enrolled in Kaiser Permanente in 1986 or 1987 with control HMO members with and without diabetes mellitus over a 4-year follow-up period. The results suggest that SMI individuals within an HMO have longer enrollment duration than controls without diabetes mellitus and only slightly shorter duration than members with diabetes mellitus. Additionally, those SMI individuals with longer enrollment durations utilize community mental health service at a greater level without leading to higher HMO costs of care. The researchers find no evidence of early termination of HMO members because of chronic and severe mental illness.
Keywords: capitation, costs, HMOs, serious mental illness

171. Norquist, G. S., & Wells, K. B. (1991). How do HMOs reduce outpatient mental health care costs? American Journal of Psychiatry, 148, 96-101.

Previous studies have demonstrated that HMOs reduce expenditures for mental health services. It has been hypothesized that HMOs may achieve these savings by excluding individuals with psychiatric disorders. To test this hypothesis, this study examines differences in the prevalence of psychiatric disorders and the use of outpatient mental health services for adults enrolled in HMOs and fee-for-service plans. The data used are from the National Institute of Mental Health Epidemiological Catchment Area survey (or study). The study found that there are no significant differences between the HMO clients and those in private groups in prevalence or use of services and that the most likely explanation for lower mental health costs in HMOs is a less intensive style of care for a comparable population.
Keywords: HMOs, utilization

172. Rosenberg, S. (1996). Health maintenance organization penetration and general hospital psychiatric services: Expenditure and utilization trends. Professional Psychology, 27(4), 345-348.

This study examines the relationship between mental health and substance abuse treatment utilization and HMO penetration on a State-by-State level, as well as the relationship between expenditures for inpatient and outpatient psychiatric services provided through general hospi-tals. Findings suggest considerable variability in HMO penetration across the United States between 1983 and 1990, with high levels of HMO penetration associated with lower rates of expenditure growth. Outpatient use for general hospitals increased substantially for States with high HMO penetration but decreased for States with low HMO penetration. Such find-ings imply that HMOs encourage outpatient alternatives to inpatient treatment while at the same time restraining the growth of general hospital expenditures.
Keywords: costs, HMOs, substance abuse, trends, utilization

173. Scheffler, R., Grogan, C., Cuffel, B., & Penner, S. (1993). A specialized mental health plan for persons with severe mental illness under managed competition. Hospital and Community Psychiatry, 44, 937-942.

The authors summarize the major characteristics of managed competition proposals and rec-ommend the development of special mental health maintenance organizations (MHMOs) to serve only persons with severe mental illness. In this model, the MHMO would provide case management in the community and a fixed point of responsibility for clinical care of these patients. Two methods of reimbursement are proposed as are specific plan characteristics that should be part of MHMOs. The authors also discuss possible systematic reforms that would be necessary to facilitate the integration of MHMOs into a managed health care system.
Keywords: HMOs, serious mental illness

174. Schneider-Braus, K. (1992). Managing a mental health department in a staff model HMO. In J. Feldman & R. J. Fitzpatrick (Eds.), Managed mental health care: Administrative and clinical issues (1st ed., pp. 125-141). Washington, DC: American Psychiatric Press.

In this chapter, the author discusses the philosophical and practical issues relevant to the management of a staff model mental health department. In particular, she addresses impor-tance of purpose and mission, role of the director, designing a spectrum of services, staffing patterns, utilization and gatekeeping, centralization versus decentralization, medical records, and patient service. The author concludes that mental health professionals should educate themselves in these areas so they can have an impact on providing cost-effective, high-quality mental health services.
Keywords: HMOs, overviews

175. Shadle, M., & Christianson, J. B. (1988). The organization of mental health care delivery in HMOs. Administration in Mental Health, 15, 201-225.

This article presents an overview of the status of the HMO industry and focuses on how HMOs structure and deliver mental health care. The authors describe a nationwide study in which directors of 286 HMOs (representing staff, group, network, and Independent Physicians Association [IPA] models) were surveyed. The study found that mental health services were delivered internally by 70 percent of the HMOs. Over half of the HMOs had designated coordinators of mental health services other than the medical director, and the presence of a designated mental health coordinator was significantly related to the age, size, and model type. Older and larger not-for-profit HMOs were most likely to have designated directors. The study also reported on types of providers used, the percentage of time different types of providers spent in service delivery, and staffing ratios for various categories of providers. Finally, the study reports on use of external alcoholism, drug abuse, and mental illness providers by HMO type, referral patterns, and access to services. The article concludes with a comparison of IPAs with other types of HMO models.
Keywords: HMOs, overviews

176. Shadle, M., & Christianson, J. B. (1989). The impact of HMO development on mental health and chemical dependency services. Hospital and Community Psychiatry, 40, 1145-1151.

In this article the authors examine the ways in which the five major HMOs in the Minnesota- St. Paul area have reduced their members’ use of inpatient mental health and chemical dependency services. They are particularly interested in the impact of these HMOs on the way that other providers in the community organize and deliver services. Data were collected through structured interviews with 19 HMO representatives and individuals associated with government, community-based organizations, and provider groups. The authors also analyzed data provided by the HMOs to the State of Minnesota and hospital utilization data.
Keywords: HMOs, utilization

177. Simon, G. E., Grothaus, L., Durham, M. L., VonKorff, M., & Pabiniak, C. (1996). Impact of visit copayments on outpatient mental health utilization by members of a health maintenance organization. American Journal of Psychiatry, 153(3), 331-338.

With the need for mental health services exceeding available resources at a time when pressures for cost containment are high, many researchers are attempting to identify a way to decrease costs without preventing the most needy people from accessing care. Several mechanisms for limiting outpatient mental health services exist, including cost-sharing, restrictions on the num-ber of visits, restrictions by diagnosis, and restrictions by type of treatment. In this study, the authors examine the effect of two stepwise increases in visit copayments on outpatient mental health utilization within an HMO. From their results, they conclude that implementing copay-ments significantly reduces initial access to mental health services and has a smaller impact on treatment intensity. Cost-sharing restricts access to care regardless of the level of clinical need.
Keywords: economics, HMOs, utilization

178. Stelovich, S. (1996). Evolution of services for the chronically mentally ill in a managed care setting: A case study. Managed Care Quarterly, 4(3), 78-84.

The author uses the experience of Harvard Pilgrim Health Care, a Boston HMO, to illustrate key factors in the evolution of mental health and substance abuse care in HMOs and managed care environments. These factors include the development of a broad spectrum of services, the use of algorithms to guide patient treatment decisions, and the implementation of outcome measurement. The author also discusses other factors, less directly related to clinical practice, which have had a significant impact on program development: dollars allocated to mental health services, the influence of different service delivery models, and the use of diverse pay-ment models.
Keywords: HMOs, overviews, serious mental illness

179. Stoil, M. J., & Hill, G. A. (1998). Survey results on behavioral health promotion in managed primary health care. Journal of Public Health Management Practice, 4(1), 101-109.

This article reports on a 1995-1996 survey of HMOs that gathered information about the nature of their health promotion services related to lifestyle and behavioral health. Using the survey results, the authors describe eight distinct models for the delivery of preventive services. The distinguishing features of the models are based on how services are provided: for example, whether they are directly purchased by the buyer from the HMO, provided by in-network primary care providers versus through a subcontractor, provided by way of referral to an external source, provided through long-term community investment, or provided by way of philanthropic commitment of either the managed care provider or its contractors.
Keywords: HMOs, models, prevention

180. Unutzer, J., Simon, G., Pabiniak, C., Bond, K., & Katon, W. (1998). The treated prevalence of bipolar disorder in a large staff-model HMO. Psychiatric Services, 49(8), 1072-1078.

This article examines the treated prevalence of bipolar disorder in a large staff-model HMO in western Washington State. The HMO’s patient database was used to determine the number and identity of patients treated for bipolar disorder. The patient records showed a somewhat higher treatment prevalence for women, younger enrollees, and enrollees in the State’s Basic Health Plan program for low-income residents. Of the patients treated for bipolar disorder, only a small percentage received treatment with an antidepressant, antipsychotic, or a benzo-diazepine without having a mood stabilizer prescribed. Overall, this study finds the treated-prevalence rate found in this HMO population to be somewhat higher than previously report-ed rates for prepaid health plans.
Keywords: HMOs, serious mental illness

181. Wainstock, E. J. (1993). How HMOs can effectively manage mental health services in the 1990s. Administration and Policy in Mental Health, 21, 15-26.

This article describes the ways in which HMOs have responded to increased demand for cost-effective and quality mental health and chemical dependency (MH/CD) services. The author argues that HMOs should not contract or carve out mental health service to managed mental health care companies but should restructure internally to provide these services. In this way, HMOs can ensure comprehensive, integrated, and continuous services to their clients. The author suggests how and why HMOs should restructure. Some goals of restructuring include the establishment of a separate MH/CD department or unit, redesign of the benefit plan to allow for flexible benefits, the use of case management and improved access to services through decreased waiting times, 24-hour/7-day-a-week telephone service, and maintenance of a multidisciplinary staff.
Keywords: HMOs, integration

182. Wholey, D., Christianson, J., & Peterson, M. (1996). Organization of mental health care in HMOs. Administration and Policy in Mental Health, 23(4), 307-328.

The internal organization of an HMO can greatly affect the integration of service delivery. This article examines the relationship between the structure of an HMO’s delivery system and the way in which it provides for mental health services. On the basis of a survey of 405 HMOs in 1990, the authors conclude that certain variables internal to an HMO’s structure significantly impact that HMO’s level of integration of mental health services. In particular, group-based HMOs are more likely than Independent Physicians Associations to contract for mental health care provision, and both are more likely to contract as overall enrollment increases. Competition within a market area also influences the likelihood that an HMO will contract for mental health services, with HMOs in a more competitive market being more likely to contract than those in a less competitive market.
Keywords: carve-outs, HMOs

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