Cost, utilization, and utilization review of mental health services in a prepaid group practice plan

The author describes the utilization review process, utilization patterns, and service cost of the Mental Health Service of the Health Insurance Plan of Greater New York (HIP). He finds that a mental health care delivery system within a health maintenance organization offers the advantages of sophisticated utilization review procedures, reduced cost per mental health incident, and a low utilization rate and low cost for psychiatric hospitalization. However, the HMO's return-to-function treatment goals may be too limited for the minority of patients who would benefit only from long-term intensive treatment. He recommends that cost accounting be based on cost per illness rather than cost per service.