Effects of a mental health carve-out on use, costs, and payers: a four-year study

This study examines the effects of a mental health carve-out on a sample of continuously enrolled employees (N = 1,943) over a four-year time frame (1990-1994). The article presents a health care services utilization model of the effect of the carve-out on outpatient mental health use, cost, and source of payment in the three years post implementation relative to the year prior to the carve-out model. In the first three years of the carve-out, the likelihood of employees seeking mental health care increased in significant part because of the carve-out. For the outpatient mental health services user, the carve-out was not associated with the level of mental health services received. The carve-out was significantly associated over time with a reduction in the patient's and employer's mental health costs. This effect was more pronounced in the second and third years of the carve-out. The article explores the policy implications of these and other findings.