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Does managed care affect the diffusion of psychotropic medications?

Marisa E Domino¹

¹The University of North Carolina at Chapel Hill, Chapel Hill, NC 27599-7411, USA. domino@unc.edu

Health Economics

|March 9, 2011

Summary

Managed care significantly impacts the adoption of new mental health medications in state Medicaid programs. Capitated managed care shows the strongest positive association with faster diffusion of newer psychotropic drugs.

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Area of Science:

Health Services Research
Pharmaceutical Policy
Mental Health Services

Background:

Newer treatments for mental illnesses exhibit varied adoption rates across states.
Understanding factors influencing the diffusion of psychotropic medications is crucial for healthcare policy.

Purpose of the Study:

To examine the association between managed care penetration and the diffusion of newer psychotropic medications in state Medicaid programs.
To compare the effects of different managed care models (capitated, any managed care, behavioral health carve-outs) on medication diffusion.

Main Methods:

Analysis of state-level diffusion of antidepressant and antipsychotic medications in fee-for-service Medicaid programs (1991-2005).
Utilized a fourth-order polynomial fixed effect regression model.
Controlled for time-varying state characteristics.

Main Results:

Significant differences in diffusion paths were observed based on the level of managed care use.
Capitated managed care demonstrated the largest positive effect, leading to greater initial shares of newer psychotropic medications.
Behavioral health carve-outs and overall managed care had a modest influence on diffusion.

Conclusions:

Managed care, particularly capitated models, plays a role in the diffusion of innovative psychotropic medications within Medicaid.
Policy implications suggest that managed care structures may accelerate access to newer mental health treatments.