The economics of managed care in behavioral health. Basic concepts and incentives

Psychiatrists and other behavioral health clinicians must accept managed care philosophy because it is not going to disappear. A keen understanding of the specific issues that are pertinent to the managed care contracts that are signed is important if the clinician is to serve as an effective advocate for his or her patients on a case by case basis. Managed care in behavioral health services is now preparing to enter a new phase in development in which there will be reduced competition amongst the BHMCOs because the number of managed care organizations are decreasing with mergers and acquisitions. These adjustments in the market will leave the clinician and the provider organization potentially less able to make changes in their own delivery systems unless the discussions and strategies for change are structured in such a way that the incentives for all involved parties are aligned. Stakeholders in the process of managing care for behavioral health will need to come together to educate all parties about the value of necessary behavioral health treatment at the point of need. Appropriate access to all necessary behavioral health services could create additional short-term costs, but with reasonable management of the services, these costs could be kept in line.