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Related Experiment Videos

Academic psychiatry and managed care: a case study

S Wetzler1, B J Schwartz, W Sanderson

  • 1Division of Psychology, Albert Einstein College of Medicine, Monteflore Medical Center, Bronx, NY 10467, USA.

Psychiatric Services (Washington, D.C.)
|August 1, 1997
PubMed
Summary

Academic psychiatry departments can gain autonomy and manage costs by shifting to direct, full-risk capitation contracts with health insurers, bypassing intermediaries.

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Area of Science:

  • Healthcare Management
  • Psychiatric Services
  • Health Economics

Background:

  • Traditional fee-for-service models in academic psychiatry face economic challenges due to managed care cost constraints.
  • Managed care intermediaries often create barriers between healthcare providers and insurers.
  • Academic departments need strategies to maintain financial stability and clinical autonomy.

Purpose of the Study:

  • To describe a model for academic psychiatry departments to engage in direct, full-risk capitation contracts.
  • To evaluate the initial operational and financial outcomes of this transformation.
  • To highlight the differences between managed care and fee-for-service treatment models.

Main Methods:

  • A psychiatry department transitioned from fee-for-service to full-risk capitation by contracting directly with health maintenance organizations.

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  • Established two legal entities: a behavioral management services organization and a behavioral integrated provider association.
  • Analyzed data from the first year of operation, including enrollee numbers, capitation rates, and service utilization.

    • Main Results:

    • The department successfully eliminated the need for behavioral managed care intermediaries.
    • Data on enrollees, capitation rates, and service utilization were collected for the first three contracts.
    • Fundamental differences in treatment models under managed care versus fee-for-service were identified.

    Conclusions:

    • Direct contracting on a full-risk capitation basis empowers psychiatry departments to address economic threats from managed care.
    • This model allows departments to maintain or regain autonomy in care management and preserve high-quality patient care.
    • Academic psychiatry departments can enhance their financial resilience and operational independence through strategic contracting.