Do physicians who diagnose more mental health disorders generate lower health care costs?

Underrecognition and undertreatment of mental health disorders in primary care have been associated with poor health outcomes and increased health care costs, but little is known about the impact of the diagnoses of mental health disorders on health care expenditures or outcomes. Our goal was to examine the relationships between the proportion of mental health diagnoses by primary care physicians and both health care expenditures and the risk of avoidable hospitalizations.

We used cross-sectional analyses of claims data from an independent practice association-style (IPA) managed care organization in Rochester, New York, in 1995. The sample was made up of the 457 primary care physicians in the IPA and the 243,000 adult patients assigned to their panels. We looked at total expenditures per panel member per year generated by each primary care physician and avoidable hospitalizations among their patients.

After adjustment for case mix, physicians who recorded a greater proportion of mental health diagnoses generated significantly lower per panel member expenditures. For physicians in the highest quartile of recording mental health diagnoses, expenditures were 9% lower than those of physicians in the lowest quartile (95% confidence interval, 5% - 13%). There was a trend (P = .051) for patients of physicians in the highest quartile of recording mental health diagnoses to be at lower risk for an avoidable hospitalization than those of physicians in the lowest quartile.

Primary care physicians with higher proportions of recorded mental health diagnoses generate significantly lower panel member costs, and their patients may be less likely to be admitted for avoidable hospitalization conditions.