Assessing cost and utilization in managed mental health care in the United States

Mental health cost containment in the United States has evolved from fragmented utilization review and discounted pricing programs in the 1980s to comprehensive mental health managed care programs in the 1990s, in which the network managing the care takes on financial risks associated with price and utilization for all mental health services provided to an enrolled population. While the earlier programs did not control costs to any significant degree, the newer forms of managed mental health are showing substantial reductions in cost, primarily through the reduction in use of in-patient services. Based on these encouraging but very preliminary results, state Medicaid programs have increasingly embraced managed care for both medical and mental health services for eligible low-income populations. However, little has been systematically evaluated with respect to the effects of aggressive mental health care management upon quality of care, functional outcomes or patient satisfaction. In addition, substantial new investment in merged clinical and financial information systems raises the entry cost significantly for managed care providers.