The state of mental healthcare

May 1, 2013

Payers, providers must design compliant policies and ensure access

Between 2007 and 2011, spending on inpatient admissions for mental health and substance use treatment grew faster than spending on medical and surgical admissions, according to a recent report by the Health Care Cost Institute (HCCI). The escalation was driven by the Mental Health Parity and Addiction Equity Act of 2008.


In one of the first analyses of the law’s impact, HCCI found that substance use admissions grew by 19.5% and mental health admissions grew 5.9% in 2011 for people younger than 65 and covered by employer-sponsored health insurance.

At first glance, this is an extraordinary increase in costs. However, the numbers do not reflect the savings that are seen when a person with a mental health or substance use issues seeks treatment, according to Wayne W. Lindstrom, PhD, president and CEO of Mental Health America, an advocacy organization that is working to enable access to quality care for those with a mental illness or substance use disorder.


There is a significant multiplier effect of total medical costs for untreated behavioral health problems, which encompass mental and substance use problems, adds William Wood, MD, PhD, chief medical officer of behavioral health for Amerigroup Tennessee, a public-program health plan. Many people with mental health conditions also suffer medical comorbidities, such as chronic pain, headaches, obesity and other physical ailments, increasing their costs of care. Many of those with mental health disorders also self-medicate and develop co-addiction disorders. These factors add costs and also have a negative impact on the person’s quality of life. Patients can even have a shorter lifespan.

Added societal impact
According to the Substance Abuse and Mental Health Services Administration (SAMHSA), which is part of the National Institutes of Health, treating behavioral disorders results in savings in medical healthcare costsas well as gains in the criminal justice system and the workplace.


“SAMHSA cited evidence that when you treat these disorders with evidence-based practices, the yield is anywhere from $2 to $10 in savings for every dollar spent,” Lindstrom says.


“We do believe that treatment results in a cost savings,” agrees Christina Severin, president of Network Health in Massachusetts, a  Medicaid plan. “When we look at data for individuals engaged in treatment for issues around mental health or substance use, we see that their physical health costs are much lower.”


Network Health’s focus is on cost-reduction through prevention and engagement with treatment. For example, if someone is using drugs or alcohol and had an accident, they might arrive in an emergency department where the issue could be identified.


“If that emergency visit can translate into meaningful engagement with the healthcare system, we have the opportunity to learn about other medical issues the member might be facing, and to engage the member to address the full scope of their medical and behavioral health needs,” Severin says. “If we can effectively help address all those needs in a holistic manner and help people meaningfully engage in their recovery, we might drive up costs in the short term, yet ultimately, costs will decrease over time.”

“In healthcare, there has been a paradox of excess and deprivation regarding the financing of the system." -Christina Severin


The HCCI report, which also found that medical and surgical admissions declined by 2.3% for the mental healthcare population, reflects the potential savings of holistic care.
Likewise, as more people seek treatment, society could see significant savings in two unrelated areas: the criminal justice system and the workplace.


More people with mental illness are in jail than are in hospitals today, according to Dr. Wood. A national study in 2004 found that more than half of prisoners in state facilities suffered from a mental illness.


“It is not uncommon today for the criminal justice system to be referred to as the defacto mental health system in this country, and it costs more to incarcerate someone for a year than it would to send that person for the full ride to Harvard or Yale,” Lindstrom says. “Between 60% and 85% of people who are incarcerated have an addiction and/or mental illness.”


Another benefit of behavioral health treatment is the patient’s improvement in the workplace. Workers with behavioral health issues that are left untreated are less productive and miss more work days than their peers, causing plan sponsors additional indirect costs. Many are not able to work at all and move to public assistance. According to a 2008 review in the American Journal of Psychiatry, major mental disorders cost $193 billion a year in lost earnings alone.

High risk of poverty
The recent downturn in the economy has been a significant contributor to the prevalence of mental health conditions, says Dr. Wood.


“People are coming in with depression and anxiety disorders and other problems as a result of losing their homes and losing their jobs,” he says.


There is a correlation between mental health and poverty.


“If you are living in poverty, you are more likely to suffer from a mental health issue, such as depression,” Severin says. “Furthermore, if you originally came from a middle-class family, and you suffer from a major mental health illness, such as bipolar disorder or schizophrenia, you are more likely to end up living in poverty.”


Chronic, untreated mental illness might go unrecognized. The patient might resist treatment, continuing to decline in his or her ability to function.
Because of this, Medicaid ends up being the disproportionate payer of mental health services. According to Dr. Wood, the latest estimates from 2010 are that behavioral health treatment costs the United States about $135 billion, which is a large number, but a small portion of the total in this country.


“The cost of behavioral health is only about 5% of the total cost of healthcare,” Lindstrom says. “Public payers account for about 79% of substance use treatment and 58% of mental health treatment.”


The Mental Health Parity Act was an important step in recognizing the chronicity of many mental health disorders, as well as their societal costs. The act prevents lifetime caps and mandates behavioral health coverage be on par with benefits offered for medical and surgical care. However, the parity act only applies to large group employer funded state regulated plans and Medicaid managed care plans.


By making behavioral health an Essential Benefit, the Patient Protection and Affordable Care Act (PPACA) will reinforce care delivery and access.


“Under the Affordable Care Act, behavioral health is part of the Essential Health Benefits (EHBs). If an individual is going to purchase a plan-and not be subject to a tax penalty-the benefit plan that they are purchasing from a qualified carrier would include behavioral benefit,” Severin says.

In the wake of last month’s Boston Marathon tragedy, for example, Cigna and Aetna opened hotlines offering provider referrals and free counseling for members and non-members.


PPACA doesn’t necessarily parallel the parity act, according to Dr. Wood.


“Under healthcare reform, the Mental Health Parity Act's applicability is extended to smaller groups and individual market plans purchased through state health insurance exchanges and Medicaid non-managed care benchmark and benchmark equivalent plans,” Dr. Wood says. “But the smaller group coverage that is purchased outside an exchange will continue to be exempt from the Mental Health Parity Act.”

Correcting the paradox
Paying for care is only one aspect of parity, experts say. Before there can be true parity, the one in four Americans that suffer from a behavioral health issue must have access to treatment and a support system. And increasing access will be difficult because there are not enough mental health workers to handle the patient load.


“We cannot increase manpower overnight,” says Dr. Wood. “But we need to increase manpower to improve access. There is a shortage of psychiatrists overall and an even greater shortage of child psychiatrists.”


As mental and physical health are integrated, primary care physicians will become even more important in recognizing that a person is suffering from a behavioral health condition and making sure that person receives the proper assessment and care.


Accountable care organizations (ACOs) and patient-centered medical homes will help because they will treat the entire patient, ensuring both physical and emotional health.


“In healthcare, there has been a paradox of excess and deprivation regarding the financing of the system,” Severin says. “One of my hopes and aspirations for ACOs is that they take on the quality and the financial risk for the individuals who are members of that ACO. The ACO has an incentive to say, ‘Let’s not underfund this and overfund that, rather let’s fund everything the right way to get the optimum outcome at the end of the day.’ I hope that this ACO movement will be one of the forces that corrects this paradox of excess and deprivation.”

Additional solutions
Increasingly, technology will also come into play to improve access affordably. Patients and primary care physicians can benefit from online video interactions, according to Dr. Wood.
For example, physicians might have a telemedicine consult with a psychiatrist to help in the initial assessment of a patient and determine if a referral is needed. And patients, especially those in rural areas, can use telemedicine to access psychological and psychiatric services quickly.


Other ways to increase access as demand rises are to leverage open-access clinics that don’t require appointments for assessments; increasing group therapy models of care-instead of typical one-on-one psychotherapy sessions-and offering peer-to-peer support services, according to Lindstrom.


In the wake of last month’s Boston Marathon tragedy, for example, Cigna and Aetna opened hotlines offering provider referrals and free counseling for members and non-members.


Ultimately, reimbursements for mental health services must be more robust to increase telemedicine use and to encourage more clinicians to enter the specialty, experts say.


Millions of Americans, both adults and children, suffer from a behavioral health issue. Payers, providers and policymakers aim to improve care and access through innovation and reform.

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