Illustration by
Malcolm Garris/PhotoDisc

By Anne Federwisch, OTR
December 11, 1997

Everyone agrees the move to managed mental health care has decreased costs, decreased inpatient care, and increased standardization for most patients. But the whether those changes have improved or detracted from treatment continues to be debated by behavioral health professionals.

"In a word, devastating," said Karen Shore, PhD, describing the effect of managed care on mental health care. She is president of the National Coalition of Mental Health Professionals and Consumers. "What we’re seeing is a move away from any kind of talk therapy, any kind of intensive treatment, whether it’s for the seriously mentally ill or those with emotional problems." Under managed care, treatment focuses on crisis intervention, stabilization, and getting back to pre-crisis states, "regardless of whether that was good or not," she said.

Representatives of managed care organizations disagree. "It’s a myth that everything was fine before managed care came along," said Mike Brase, MD, medical director of Vista Behavioral Health Plans in San Diego, Calif. He cited the scandals of the late ’80s and early ’90s when people were unnecessarily hospitalized—often against their will—in psychiatric facilities while their insurance footed the bill.

Brase said that managed care makes mental health benefits more available to a larger number of people than indemnity plans did. Patients receive appropriate care, he said, whether their needs are chronic or acute. "Where the denials come into play is where people are talking about growth-oriented treatment, therapy for interpersonal growth," he said. "It’s just that we as a society with limited resources have to think how are we going to spend our money." The Woody Allen scenario of years of soul-searching therapy is not covered by managed care, but needed treatment for schizophrenia or other serious mental illness is, Brase said.

Limiting care

One way managed care companies decrease costs is by strictly limiting inpatient care. Hospitalization should be reserved for those who are a danger to themselves or others, according to Alan Savitz, MD, president and CEO of PacifiCare Behavioral Health Inc. in Laguna Hills, California. He argues that hospitalization can make patients dependent and that it tends to "exacerbate the problems of people who are the sickest, increasing their sense of institutionalization."

But fewer therapy sessions, even on an outpatient basis, lead to a greater dependency on medication and a trend toward symptom relief rather than an attack on the root cause, Shore said. "It’s kind of like giving a house that’s falling apart inside a paint job on the outside," she said. "That house looks pretty, but inside, it’s really as run down as it was before."

Brase countered that drugs are only prescribed when medically necessary. Utilization review—common in managed care—may mean that more patients are referred for medication consults, he said. But "managed care companies don’t force patients to take medicines."

Restricting access to drugs

Shore also charges that managed behavioral health organizations cut costs by restricting access to newer, more costly medications. But Brase said that although that may have been true in the past, most managed care organizations embrace new psychotropic medications once they have a track record as both useful and cost-effective.

Savitz said that his organization may still require special authorization for use of new pharmaceuticals if physicians are unfamiliar with prescribing them, because of potentially serious side effects.

Caring for the
seriously ill

Critics also charge that managed care reduces costs by restricting benefits for patients with serious mental illnesses. In September, the National Alliance for the Mentally Ill (NAMI) issued a failing report card to the managed care industry for its care of the seriously mentally ill. Stand and Deliver: Action Call to a Failing Industry analyzed nine managed behavioral health care companies against nine criteria such as access to the latest drugs, housing, and rehabilitation.

But NAMI’s report card may be premature, at least in the case of PacifiCare, which was not serving the public sector at the time of the evaluation, according to Savitz. He said that PacifiCare’s treatment population at the time included very few patients with serious mental illnesses, probably because they are less common in the employed population that it served. For that population, issues such as access to housing are less relevant.

Savitz said that people with serious mental illnesses receive appropriate care in his organization. Denying treatment makes no sense, he said. "For people with both bipolar disorder and schizophrenia, if you don’t treat them along the way, they’re going to end up acute and hospitalized, and then you’re paying more."

Elizabeth Edgar, a co-author of the NAMI report, admitted that the report was less of a condemnation and more of a warning to the industry. NAMI wanted to highlight the fact that serving the chronically mentally ill in the public sector is more challenging than providing behavioral health care to the employed population, she said.

Increasing standardization

Like their medical counterparts, managed behavioral health organizations are turning to practice guidelines to standardize treatment and increase accountability. But the utilization review inherent to verifying compliance with standards makes some clinicians bristle. "I couldn’t tolerate the invasion of privacy. I felt like I was betraying my patients every time I had to go through a utilization review procedure," Shore said.

Brase defended the use of practice guidelines, saying they are based on evidence of what works. "I think it’s brought some accountability. Mental health has always happened somewhat in a ‘black box’ in that it goes on in the office between the provider and the patient," he said. But not all cases get reviewed at Vista. "For instance, we approve six sessions for anyone who asks. Period. With no review," he said.

Looking ahead

Shore sees no future for managed care in mental health. "The only light at the end of the tunnel is if enough people come to realize that managed care has to be replaced by a more pro-patient and pro-quality system," she said.

But the debate over the efficacy of managed mental health care is likely to continue. Starting in 1999, any managed care organization accredited by the National Committee for Quality Assurance must either meet its standards for managed behavioral health organizations or delegate such care to one that does.

"Managed care is by no means perfect," but it offers a way to ensure accountability and see whether money is spent in a way that does the most good, Brase said. "I’m not so naive to think that that’s how everybody’s doing it, but that’s how it should be. A lot of companies are trying for that."

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