Substance abuse service utilization under managed care: HMOs versus carve-out plans

Abstract

Managed behavioral health care organizations are increasingly managing Americans' substance abuse by using carve-outs, but little information is available about how this has affected service utilization and costs when compared to HMOs. One employer's claims for substance abuse services delivered under a carve-out arrangement are compared to prior HMO claims information. Under the carve-out arrangement, inpatient and outpatient service utilization are found to decrease, but intermediate service utilization dramatically increases. Costs per unit service decrease for all services. The pattern of changes is different from that seen for mental health services, suggesting that different factors may be applicable to substance abuse services.

A Comparison of Acute Psychiatric Care Under Medicaid Carve-Outs, HMOs, and Fee-for-Service

“…The researchers conclude that although the program was still relatively new, the carve-out led to increased access to and utilization of services as well as lower costs. Examining a specific service provided under a carve-out system, Stein et al (1999) looked at costs and service utilization for substance abuse treatment under a carveout plan that was implemented by a Midwestern employer, comparing it to the previously administered HMO plan. The researchers looked at rates of service utilization and costs for inpatient, intermediate, and outpatient substance abuse care.…”

Managed Behavioral Health Care Carve-Outs: Past Performance and Future Prospects

“…3 Cost savings are demonstrated across contracts with different payers (private firms and state employers), different MBHOs, and different models of general health insurance (fee-for-service and PPO). Studies that examine a subset of expenditures, such as costs for individuals with a particular diagnosis [e.g., depression care in Merrick (49)] or for a particular type of service [e.g., substance abuse in Stein et al (58)] also conclude that the carve-out led to significant spending reductions. Whereas many evaluations examine one-time spending decreases, Sturm (60) notes that several studies also show continued savings over time.…”

“…Many of the studies showing cost savings also find lower costs per service or per user (see (58) Private firm (substance abuse) Table 1), and several analyses note that lower payment rates for services were a factor in reducing these costs (13,33,42,49,54,61). 6 Others note lower costs per episode or service category (34,37), which may be linked to lower payment rates or, alternatively, could be due to less intense service mix within that spending category.…”

A conceptual schema for government purchasing arrangements for Australian alcohol and other drug treatment

“…outpatient vs inpatient); to the treatment processes (e.g. retention in treatment); to the quantity and quality of treatment; and to treatment outcomes (Fuller, Rieckmann, McCarty, et al, 2005;Ghose, 2008;Heinrich & Fournier, 2005;Knudsen & Roman, 2012;Mason, Sutton, Whittaker, et al, 2015;McLellan, Kemp, Brooks, et al, 2008;Stein, Reardon, & Sturm, 1999;Soman, Brindis, & Dunn-Malhotra, 1996;Sosin, 2005). Thus purchasing arrangements can have important impacts on service delivery and health outcomes.…”