Does the sunset of mental health parity really matter?

The 1996 Mental Health Parity Act (MHPA), which became effective in January 1998, is scheduled to expire in September 2001. This article provides an overview of what the MHPA intended to do and what it actually has accomplished. We summarize state legislature actions through the end of 2000 and report on their effects on employer-sponsored mental health coverage using a national survey fielded in 1999-2000. We then discuss possible amendments to the MHPA and reforms beyond full parity that might be considered.

Toward full mental health parity and beyond.

The 1996 Mental Health Parity Act (MHPA), which became effective in January 1998, is scheduled to expire in September 2001. This paper examines what the MHPA accomplished and steps toward more comprehensive parity. We explain the strategic and self-reinforcing link of parity with managed behavioral health care and conclude that the current path will be difficult to reverse. The paper ends with a discussion of what might be behind the claims that full parity in mental health benefits is insufficient to achieve true equity and whether additional steps beyond full parity appear realistic or even desirable.

The impact of risk shifting and contracting on mental health service costs in California.

This paper identifies the impact of "program realignment," a 1991 California state policy that significantly enhanced local governments' financial risk and programmatic authority for public mental health services, on treatment costs per user, and on the mix of inpatient and outpatient service costs. The study employs a natural pre-realignment and post-realignment design using the 59 California local mental health authorities (LMHAs) as the unit of analysis over a seven-year period spanning policy implementation. Total treatment and inpatient cost per user decreases and outpatient cost per user increases after program realignment. Higher levels of contracting with private providers tend to enhance this trend, while risk for institutional services reduces user costs uniformly. Financial and programmatic decentralization can enhance cost efficiency in treatment, while promoting substitution of outpatient services for inpatient services. Local conditions such as risk and contracting determine the extent of the policy response.

Managed care and fee discounts in psychiatry: new evidence.

This article describes the extent of managed care and fee discounting in psychiatric practice using data on 970 randomly sampled American Psychiatric Association members from the 1996 National Survey of Psychiatric Practice. Seventy percent of psychiatrists were found to have some patients in managed behavioral health care programs. The survey data illustrate that psychiatrists' involvement in managed care spans primary practice settings and is fairly evenly distributed across regions of the United States. Nationally, psychiatrists discount fees for 35% of their patients, with significant variation by practice type and extent of involvement in managed behavioral health care. The average level of discount is 25% with little variation by practice type or extent of involvement in managed behavioral health care. There is little evidence that psychiatrists with patients in managed care have higher fee levels than psychiatrists with no patients in managed care.

An update on Spain's health care system: is it time for managed competition?

Using national data and the most recent OECD figures, we provide an updated assessment of the Spanish health care system and its reforms. We compare figures from Spain with other major industrialized nations and find that the Spanish system appears macro-economically efficient and equitable. However, like many other countries in Europe and elsewhere, the Spanish health care system confronts continued pressures to provide high-quality universal care in the face of ever increasing costs and competing uses for financial resources. These pressures have prompted the enactment of several reforms, which are reviewed. We draw from the American experience with managed care and managed competition to illustrate possible paths for further reform.

Changing supply and earning patterns of the mental health workforce.

The authors examine recent trends in the supply and earnings of various mental health providers from 1989 to 1995. The makeup of the mental health workforce is fundamentally different now than a decade ago. The number and earnings of psychiatrists have been relatively flat. The number of psychologists increased by 24%, with their earnings rising rapidly in the 1980s, and remaining level since 1990. The number of clinically trained social workers increased by 87% over the same period, and the number of advanced practice nurses certified in mental health specialties almost doubled, with the earnings of these master's-level providers increasing steadily over the period described. These trends are discussed in the context of major changes in the financing and delivery of mental health care.

The productivity of physician assistants and nurse practitioners and health work force policy in the era of managed health care.

Managed care is spreading rapidly in the United States and creating incentives for physician practices to find the most efficient combination of health professionals to deliver care to an enrolled population. Given these trends, it is appropriate to reexamine the roles of physician assistants (PAs) and nurse practitioners (NPs) in the health care workforce. This paper briefly reviews the literature on PA and NP productivity, managed care plans' use of PAs and NPs, and the potential impact of PAs and NPs on the size and composition of the future physician workforce. In general, the literature supports the idea that PAs and NPs could have a major impact on the future health care workforce. Studies show significant opportunities for increased physician substitution and even conservative assumptions about physician task delegation imply a large increase in the number of PAs and NPs that can be effectively deployed. However, the current literature has certain limitations that make it difficult to quantify the future impact of PAs and NPs. Among these limitations is the fact that virtually all formal productivity studies were conducted in fee-for-service settings during the 1970s, rather than managed care settings. In addition, the vast majority of PA and NP productivity studies have viewed PAs and NPs as physician substitutes rather than as members of interdisciplinary health care teams, which may become the dominant health care delivery model over the next 10-20 years.

Folic acid fortification of grain: an economic analysis.

OBJECTIVES: The purpose of this study was to compare the economic costs and benefits of fortifying grain with folic acid to prevent neural tube defects. METHODS: A cost-benefit analysis based on the US population, using the human capital approach to estimate the costs associated with preventable neural tube defects, was conducted. RESULTS: Under a range of assumptions about discount rates, baseline folate intake, the effectiveness of folate in preventing neural tube defects, the threshold dose that minimizes risk, and the cost of surveillance, fortification would likely yield a net economic benefit. The best estimate of this benefit is $94 million with low-level (140 micrograms [mcg] per 100 g grain) fortification and $252 million with high-level (350 mcg/100 g) fortification. The benefit-to-cost ratio is estimated at 4.3:1 for low-level and 6.1:1 for high-level fortification. CONCLUSIONS: By averting costly birth defects, folic acid fortification of grain in the United States may yield a substantial economic benefit. We may have underestimated net benefits because of unmeasured costs of neural tube defects and unmeasured benefits of higher folate intake. We may have overestimated net benefits if the cost of neurologic sequelae related to delayed diagnosis of vitamin B12 deficiency exceeds our projection.

The hospital response to Medicare's Prospective Payment System: an econometric model of Blue Cross and Blue Shield plans.

This paper presents an empirical analysis of the impact that resulted from phase-in of Medicare's Prospective Payment System (PPS) on hospital utilization and payments for the Blue Cross and Blue Shield (BCBS) plans. A pooled cross-sectional time series econometric model was specified and estimated using quarterly hospital utilization and payments of the BCBS plans over the period 1980 to 1987. The results indicate that the implementation of PPS was significantly associated with a lower rate of hospital admissions, days and deflated inpatient payments for the BCBS plan members under age 65. A 1% increase in the proportion of hospital days reimbursed under PPS resulted in a .032% decrease in BCBS plan admissions per 1,000 members, a 0.017% decline in days per 1,000 members and a 0.016% decline in deflated inpatient payment per 1,000 members. The reductions in hospital utilization resulted in lower payments by BCBS plans to participating hospitals suggesting a positive spill-over effect of PPS for private insurers. This research underscores the importance of interaction between federal health policy and the private health insurance market.

Estimates of the economic costs of birth defects.

Birth defects now are the leading cause of infant mortality and a major contributor to heightened morbidity in the United States. Considerable medical and nonmedical resources are devoted to treating persons with birth defects. Yet, little is known about birth defects' economic burden to society and the profile of component direct and indirect costs over the lifespan of those born with specific birth defects. Using an incidence approach, we made the most comprehensive estimates to date of the cost of 18 of the most clinically significant birth defects in the United States. Our analysis provides the basis for assessing competing strategies for research and prevention.

The financial stages of cancer in the elderly.

Beyond the loneliness and fear that cancer can bring, the worry of paying medical expenses weighs heavily on the elderly patient's mind. This review describes how Medicaid, Medicare, self-insurance, and other similar programs pay for the treatment of cancer in the elderly and points out some of the current problems with these programs. In addition, the cost of cancer over the course of the disease is broken down and analyzed in sections, including the healthy (prediagnostic) stage, the acute (active) treatment stage, the chronic (rehabilitative) stage, and the terminal stage. Both the services provided during each stage and the relevant costs to the elderly patient are described. The limitations arising from incomplete medical coverage for cancer patients also is detailed.

Prevention: the cost-effectiveness of the California Diabetes and Pregnancy Program.

BACKGROUND: The California Diabetes and Pregnancy Program is a new preventive approach to improving pregnancy outcomes through intensive diabetes management preconception and early in pregnancy. METHODS: Hospital charges and length of stay data were collected on 102 program enrollees and 218 control cases. Ninety program enrollees and 90 control cases were matched on mother's age. White's classification, and race. Regression models controlled for these variables in addition to MediCal status, birth weight, and enrollment in the program. RESULTS: Hospital charges were about 30% less for program participants and days in the hospital were roughly 25% less. The program effects were larger for women that enrolled before 8 weeks gestation. More serious diabetics were also found to have larger reductions in charges and days. CONCLUSION: After adjusting for inflation and differences in charges across hospitals, $5.19 is saved for every dollar spent on the program.

Culture versus competition: the reforms of the British National Health Service.

This paper first examines the usefulness of the internal markets being proposed in NHS reforms. The impact of those reforms on hospitals and general practitioners (GPs) is then assessed. Finally, the long-term implications of replacing medical culture with competition are discussed.

HMO and PPO growth and hospital utilization and payment: a recursive model.

A recursive model of growth of Blue Cross and Blue Shield Plan Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) membership share is used to analyze total hospital utilization and payments per thousand insured members over an eight year study period, 1980 through 1987. Results indicate a strong, significant relationship between previous year Plan payments and current year growth in HMO membership share. Additional results suggest that Blue Cross and Blue Shield Plans experienced significant reductions in utilization and payments rates resulting from PPO membership share gains and not from HMO membership share gains.

The impact of Blue Cross and Blue Shield Plan utilization management programs, 1980-1988.

This study evaluates the aggregate and temporal impact seven Blue Cross and Blue Shield Plan utilization management (UM) programs have on hospital utilization and payments over a nine-year period, 1980 through 1988. The impact of these programs is determined using a statistical model that controls for variations in organizational characteristics of 56 Blue Cross and Blue Shield Plans, the health care market of the individual Plan, and several state and federal health care regulations. The statistical results indicate that over the entire period 1980 to 1988, preadmission certification, concurrent review, and denial of payment (as a part of the retrospective review program) programs were associated with lower hospital admissions, and fewer inpatient days and payments per 1,000 members. Mandatory second surgical opinion did not have a statistical impact on hospital utilization and payments. The aggregate reduction in hospital payments for all Blue Cross and Blue Shield Plans with both a preadmission certification and concurrent review program was estimated at $2.55 billion in 1988 dollars. For those Plans conducting preadmission certification, concurrent review, denial of payment, and case management programs in 1988, the total per enrollee reduction of inpatient payments was $52.94.