Mental Health/Medical Care Cost Offsets: Opportunities For Managed Care

PROLOGUE: A question that sparks debate among payers, providers, and analysts of behavioral health care coverage is: Would increased access to mental health care cause a compensatory reduction in the use of medical care services? A diverse literature exists on the “mental health/medical care cost-offset effect.” Here authors Mark Olfson, Merrile Sing, and Herbert Schlesinger provide an introduction to the debate and argue that some managed care firms could capture medical care cost savings by making mental health care services more accessible to some patients. Not only could health plans save money; patients could benefit from improved mental health treatment. Following this paper, psychiatrists Mary Jane England (president, Washington Business Group on Health) and Howard Goldman (University of Maryland, Baltimore) weigh in with Perspectives highlighting the pros and cons of the cost-offset debate for making health policy. Olfson is an associate professor of clinical psychiatry at the College of Physicians and Surgeons, Columbia University, in New York City. His research focuses on patterns and access to mental health services as well as the effectiveness of mental health treatment in routine practice. Sing is a senior economist at Mathematica Policy Research in Washington, D.C., who conducts research on health care delivery and financing. Schlesinger is the Alfred J. and Monette C. Marrow Professor of Psychology, emeritus, at the New School for Social Research in New York City and a professor of clinical psychology (in psychiatry) at Columbia. He is a pioneer in research on the mental health/medical care cost-offset effect. ABSTRACT: Health services researchers have long observed that outpatient mental health treatment sometimes leads to a reduction in unnecessary or excessive general medical care expenditures. Such reductions, or cost offsets, have been found following mental health treatment of distressed elderly medical inpatients, some patients as they develop major medical illnesses, primary care outpatients with multiple unexplained somatic complaints, and nonelderly adults with alcoholism. In this paper we argue that managed care has an opportunity to capture these medical care cost savings by training utilization managers to make mental health services more accessible to patients whose excessive use of medical care is related to psychological factors. For financial reasons, such policies are most likely to develop within health care plans that integrate the financing and management of mental health and medical/surgical benefits.