When should governments increase the supply of psychiatric beds?

Low numbers of hospital-based psychiatric beds create problems for people with severe mental illness (SMI), when they face extended emergency department (ED) waits, higher thresholds for admission to an acute bed, and short revolving-door stays with high rates of rehospitalisation. Limited access to inpatient treatment has been associated with higher suicide risk, premature mortality, homelessness, violent crime and incarceration. Ultimately, people with SMI can be transinstitutionalised to the criminal justice system. In the USA, for example, prisons have replaced mental hospitals as the largest institutions housing people with SMI. There is no international consensus on the safe minimum numbers of acute, forensic and rehabilitation beds needed to reduce these risks. As a consequence, Organisation for Economic Cooperation and Development (OECD) countries have wide variations in the mix of hospital beds with an average of 71 beds per 100 000 population. Policymakers face difficult choices with few studies to guide decisions on supplying beds. The UK Royal College of Psychiatrists offered a policy framework, which was adapted for Australia. The government of the State of South Australia increased the supplies of crisis, acute and forensic beds to meet a mandatory target to safely reduce mental health boarding in the EDs.

Efficacy of psychotherapy. Asking the right questions.

Economic pressures and "value" judgments both compel and contaminate the current debate on the efficacy of psychotherapy. Too often, complex clinical trial outcome studies ignore the clinical or treatment process, as well as personality or contextual variables. Thus, they fail to build the foundations of a clinical science that makes possible the development of individually tailored treatment approaches and outcome predictions for specific patients with unique personalities, symptoms, and life circumstances. The real challenge, therefore, is for each psychotherapeutic approach to delineate its "process steps" and relate these steps to different outcomes. The "process" is the "final common pathway" for a number of patient, therapist, technique, and contextual variables. The capacity to predict the relationship between process and outcome at each stage in a therapeutic procedure is the relevant clinical test of "efficacy."

Will community mental health survive in the 1980s?

There are now 675 funded community mental health centers (CMHCs), covering almost half the country. Many of these programs were funded in the social optimism of the 1960s and now face a crisis of purpose and funding. Additional requirements imposed by the 1975 amendments to the CMHC act are not matched by additional fiscal resources. Programs are graduating from the federal grant to find that other sources of funds, especially third-party insurance funds, are not replacing the lost federal dollars. There is evidence that CMHCs are changing from clinical/medical programs to social programs; the numbers of persons seeking care who have diagnosable mental illness and of psychiatrists and nurses relative to other staff are decreasing. The issue is whether CMHCs as a national program are headed for extinction or whether there will be new vitality for this program into the 1980s.

Third-party payers: to pay or not to pay.

Insurance companies have traditionally been wary of providing coverage for mental illness for two reasons: 1) they fear that people would bring a mental illness on themselves or would use treatment for self-actualization, and 2) they fear the risk of providing never-ending treatment for "incurable" illness. The author states that the insurers' fears are groundless but suggests that psychiatrists research the utilization and costs of their treatments in insurance plans collaboratively with the actuaries who determine policy and premiums. Retrospective and prospective criteria for outcome and effectiveness of psychiatric treatment must be developed and applied.

Community mental health centers: returning to basics.

Community mental health centers (CMHCs) have made a significant contribution to making mental health services available to many Americans; in 1977 they served almost two million people. External fiscal constraints and internal service and accountability requirements now test the viability of CMHCs, but the most recent extension of the law allows increased flexibility on implementation, and the President's Commission on Mental Health has reinforced the original purpose of CMHCs by calling for an initiative to give special attention to the needs of children and youth, the elderly, minorities, the chronically mentally ill, and other underserved populations and areas.

Medicaid cutbacks and block grants: crisis or opportunity for community mental health?

The fourfold growth in the mental health service system since 1955 has been largely financed by federal monies and by federal and state funding through Medicaid. This growth represents expansion of both institutional and outpatient settings, even though there has been a total reversal of the proportion of inpatient to outpatient care over the last 22 years. Current proposals to cap Medicaid costs and to issue block grants challenge the delivery system to attempt alternatives, such as financing similar to what is done in a health maintenance organization (HMO). The author describes a model of a "mental health HMO" that would be appropriate from professional consumer, and economic perspectives.

Why psychiatry is a low-paid medical specialty.

The authors examine the effect of economic forces on the income of psychiatrists and compare the economic position of psychiatry with that of the rest of medicine. Since 1970 the income of psychiatrists has been losing ground compared with that of other medical specialists, although recent data suggest a possible improvement in the economic position of psychiatry. The authors believe that psychiatrists' incomes are important as a sign of the value of psychiatric care and as one measure of the economics of practice, that is, the incentives related to the distribution of scarce technology and labor in the service delivery system.

The income of psychiatrists: adaptation during difficult economic times.

The earnings of psychiatrists are substantially lower than the earnings of physicians in procedurally oriented and surgical specialties of medicine. The authors offer evidence, however, that when it is compared to other cognitive medical specialties, such as pediatrics and internal medicine, psychiatry is the highest paid specialty on an hourly basis. In recent years, psychiatrists' income has improved, largely because of enhanced productivity and efficiency, diversification of treatments, work in multiple settings, the expansion of group practice, and subspecialization. The authors provide an optimistic perspective on the future of psychiatry as a medical specialty.

Utilization and cost of mental illness coverage in the Federal Employees Health Benefits Program, 1973.

The authors examine the utilization of mental illness benefits under the Blue Cross/Blue Shield and Aetna plans for federal employees; the latter plan sharply cut back its mental illness benefits in 1975. In 1973 mental illness benefits represented 7.4% of all payments under the Blues plan and 12% under the Aetna plan. The benefit for mental illness treatment under the Blues averaged $12.52 per person covered and was 7.3% of the total benefits for all conditions. Younger enrollees and their spouses tended to receive mental illness benefits primarily for outpatient treatment and children and older adults for hospitalization. These data raise key questions for claims review and peer review activities.

Fraud and abuse in psychiatric practice.

A consensus has not yet been reached on definitions of fraud and abuse, particularly the latter. Further, the terms tend to be linked routinely by federal agencies, although abuse is generally understood to relate to inappropriate and fraud to illegal practices. These definitional problems make it difficult to determine what constitutes fraudulent or abusive practice in psychiatry. The authors provide hypothetical examples relevant to psychiatry, noting that in many cases it is still impossible to determine at what point a practice becomes inappropriate or illegal. Criteria must be developed by claims review systems, ethics committees, and PSROs; all those in the mental health field should devote serious attention to these issues.

Reductions in insurance for mental disorders: adverse selection, moral hazard, and consumer demand.

Coverage for mental illness has been sharply reduced in the Federal Employees Health Benefits Program (FEHBP), especially in the largest of the participating plans, the Blue Cross and Blue Shield plan. The authors examine the role of adverse selection (accumulation of high-risk consumers within a given plan), moral hazard (demand for services for illness depending in part on the price of the services), and lack of overt consumer demand in the current trend. They point out the critical need for psychiatry to develop more effective approaches to public education on the nature of mental illness and its treatment. If the recent major cutbacks in the FEHBP prevail, this kind of restriction is likely to become the prevailing mode of mental illness coverage under private health insurance.

Insuring intensive psychotherapy.

Many private insurance programs that currently cover mental disorders eliminate intensive psychotherapies, including psychoanalysis, from the range of treatment options by placing restrictions on the number of visits covered. The authors examine the economics of intensive psychotherapy coverage and present data indicating that relatively few people in an insurance program with comprehensive mental health benefits use high cost forms of psychotherapy. They conclude that insurance coverage of intensive psychotherapy is feasible but suggest that further study of the goals of intensive treatment, potential demand for it, and the supply of qualified practitioners is needed.

How to survive in the private practice of psychiatry.

The private practice of psychiatry is being transformed by the new economics of medical care. Patients are paying more out-of-pocket for necessary care (demand-side cost sharing), and health care providers are being asked to assume part of the risk of treatment through prospective payment (supply-side cost sharing). Specific survival strategies for psychiatrists in private practice include development of a balanced practice, expansion of referral networks, participation in alternative delivery systems such as health maintenance organizations and preferred provider organizations, active involvement in utilization and claims review, participation in outcome studies, and expansion of patient care advocacy and community involvement.

Financing the medical management of mental disorders.

In 1987 Medicare benefits for the mentally ill were expanded for the first time in 22 years. A major change was the removal of limits and copayments for the "medical management of psychopharmacologic agents." Payment for medical management recognizes the trend toward the remedicalization of psychiatry; however, medical management can be defined either broadly or narrowly. The authors suggest pricing strategies for both medical management of mental disorders and psychotherapy. Enlightened design of psychiatric benefits will cover all forms of treatment according to appropriate rules. Access to treatment for mental illness is at stake as these rules develop.

Mental health care providers: not the only cause or only cure for rising costs.

The providers of mental health care have been the focus of blame for the increases in the cost of financing this care. The authors point out that the role of these providers cannot be isolated from the types of services they provide, where they are provided, to whom, and how much care is made available. They recommend that professionals and third-party payers work together on these variables and determine how best to contain the cost of the most appropriate mental health care.

Less is more? Today's economics and its challenge to psychiatry.

Escalating costs of medical and psychiatric care have prompted a reevaluation of the health care delivery system and practice styles. There are several "procompetition" or market-based solutions that seek to make the consumer of care more price conscious and the provider of care more cost conscious. Diagnosis-related groups (DRGs), preferred provider organizations (PPOs), the growth of for-profit hospital systems, and the expansion of health maintenance organizations (HMOs) are reshaping the organization and financing of psychiatric care. Psychiatry's adaptation to the new medical economics must emphasize the quality of patient care.

Trends in private insurance coverage for mental illness.

The authors analyzed data from the U.S. Bureau of Labor Statistics Level of Benefits Surveys for the period 1979-1984 to examine coverage for psychiatric disorders in the private sector. While the overall number of employees with psychiatric benefits has increased, a greater percentage have more restrictions on those benefits. The extent of coverage is wide ranging, but there is little depth and the majority of psychiatric care expenses are not insured. Although the figures do not suggest a dramatic cutback in insurance coverage, the trends toward increased reductions in benefits for all health care threaten the more vulnerable psychiatric benefits.

Psychiatric care and health insurance reform.

Concerns about cost, access, and quality of health care in the United States have led to a variety of legislative proposals that would reform our health care system and its financing. Health insurance benefits for mental illness, including substance abuse, are treated differently from medical/surgical benefits, with stricter limits on outpatient visits and hospital days. Medicare, Medicaid, and most private health insurance plans contain this historic disparity of coverage for mental illness compared to general medical illness. Psychiatric services are also distinguishable because of the large public sector reimbursement for mental illness treatment and support. Principles for a more equitable design of mental health benefits include a non-discriminatory approach; payment on the basis of service rather than diagnosis; application of cost containment for care of mental illness on the same basis as care of general medical illness; retention of the public sector as a backup system for high-cost, long-term care; encouragement of lower-cost alternatives to the hospital through the development of a continuum of care; and a recognition of the distinction between psychotherapy and medical management. All current approaches to universal health care fall short of these principles. A research agenda is needed now more than ever in order to articulate the case for complete coverage of mental illness and substance abuse.

Problems in analyzing the comparative costs of private versus public psychiatric care.

The authors outline the difficulties in attempting to compare the costs of service in various mental health settings, especially private practice and community mental health centers. Contributing to the difficulties are the differences in the populations served, differences in treatment modalities employed, and the different economic incentives operating in each setting. The authors stress the need for research on cost effectiveness as the basis for valid comparisons of various care settings.

The Mental and Nervous Disorder Utilization and Cost Survey: an analysis of insurance for mental disorders.

The Mental and Nervous Disorder Utilization and Cost Survey in Washington, D.C., has yielded useful information about outpatient utilization within an insurance plan with broad mental health coverage, as well as evidence that a comprehensive benefit with a low deductible and copayment can be offered and reasonably utilized. From the results of this survey and a substudy of claims made during 1977, the authors conclude that psychiatric diagnostic information submitted on insurance claim forms may often be inaccurate, primarily because of providers' concerns about confidentiality; such information is of little use for peer review or claims review. The authors state that caution must be exercised in generalizing from the experience under this plan to speculate about outpatient utilization which might result from broad coverage on a national level.