Online ISSN: 1099-176X Print
Copyright © 2002 ICMPE.
Managed Care and the Quality of Substance Abuse Treatment
Donald S. Shepard,1 Marilyn Daley,2* Grant A. Ritter,3 Dominic Hodgkin4 and Richard H. Beinecke5
Schneider Institute for Health Policy, Heller School for Social Policy
and Management, Brandeis University,Waltham, MA 02454-9110, USA
*Correspondence to: Marilyn Daley, Senior Research Associate, Schneider
Institute for Health Policy, Brandeis University, Mail Stop 035, P.O. Box 9110,
415 South Street, Waltham, MA 02454-9110, USA.
Source of Funding: National Institute for Alcohol Abuse and Alcoholism Grant #R01-AA-10880 to Brandeis University.
Background: In the US, the spiraling costs of substance abuse and mental health treatment caused many state Medicaid agencies to adopt managed behavioral health care (MBHC) plans during the 1990s. Although research suggests that these plans have successfully reduced public sector spending, their impact on the quality of substance abuse treatment has not been established.
Aims of the Study: The Massachusetts Medicaid program started a risk-sharing contract with MHMA, a private, for-profit specialty managed behavioral health care (MBHC) carve-out vendor on July 1, 1992. This paper evaluates the carve-out’s impact on spending per inpatient episode and three proxy measures of quality: (i) access to inpatient treatment (ii) 30-day re-admissions and (iii) continuity of care.
Methods: Medicaid claims for inpatient treatment were collapsed into episodes. Clients were tracked across the five-year period and an interrupted time series design was used to compare the three quality outcomes and spending in the year prior to (FY1992) and the four years during MHMA (FY1993-FY1996). Logistic and linear regression models were used to control for race, disability status, age, gender and primary diagnosis.
Results: Despite a 99% reduction in the use of hospital-based settings, access to 24-hour services overall increased by 38%, largely due to an expansion in the use of freestanding detoxification and acute residential services. Continuity improved by 73%. Nevertheless, rates of 7-day (58%) and 30-day (24%) readmission increased significantly, even after controlling for increases in disability status. Per episode spending decreased by 76% ($2,773), characterized by a dramatic spending reduction in FY1993 that was maintained but not augmented in subsequent years.
Discussion: The carve-out had mixed effects on the quality of substance abuse treatment. While one of the three measures (readmission rates) deteriorated, two improved (access and continuity).
Implications for Health Care Provision and Use: Rapid re-admissions were strongly associated with shorter lengths of stay, suggesting that strengthening discharge planning may preserve the benefits of MBHC while avoiding its risks.
Implications for Health Policies: Since reductions in Medicaid spending were impressive but finite, MBHC may not be the permanent solution to inflation in behavioral health care. MBHC firms should implement quality-monitoring programs to ensure that aggressive utilization management strategies do not compromise quality of care.
Implications for Further Research: The impact of managed behavioral health care should ideally be evaluated in randomized controlled studies. In addition, research is needed to establish that the quality measures employed in this evaluation - improved access, enhanced continuity and fewer rapid re-admissions – actually correspond to reductions in drug or alcohol use and other favorable outcomes obtained through client self-report or urinalysis.
Received 26 September 2002; accepted 6 March 2003
Copyright © 2002 ICMPE