1970s and 1980s in the United States. Managed
care is a concept designed to purposely control the
balance between the quality of care provided and
the cost of that care. In a managed care system, people
receive care based on need rather than on request.
Those who work for the organization providing the
care assess the need for care. Managed care began in
the early 1970s in the form of health maintenance
organizations (HMOs), which were successful in some
areas with healthier populations of people.
In the 1990s, a new form of managed care called
utilization review firms or managed care organizations
were developed to control the expenditure
of insurance funds by requiring providers to seek approval
before the delivery of care. Case management,
or management of care on a case-by-case basis, represented
an effort to provide necessary services while
containing cost. The client is assigned to a case manager,
the person who coordinates all types of care
needed by the client. In theory, this approach is designed
to decrease fragmented care from a variety of
sources, eliminate unneeded overlap of services, provide
care in the least restrictive environment, and decrease
costs for the insurers. In reality, expenditures
are often reduced by withholding services deemed unnecessary
or substituting less expensive treatment
alternatives for more expensive care such as hospital
admission.
Psychiatric care is costly because of the long-term
nature of the disorders. A single hospital stay can
cost $20,000 to $30,000. Also, there are fewer objective
measures of health or illness. For example, when
a person is suicidal, the clinician must rely on the
person’s report of suicidality; no laboratory tests or
other diagnostic studies can identify suicidal ideas.
Mental health care is separated from physical health
care in terms of insurance coverage: there are often
specific dollar limits or permitted numbers of hospital
days in a calendar year. When private insurance
limits are met, public funds through the state are
used to provide care. Legislation has been proposed in
some states to provide parity between mental and
physical health coverage, meaning that mental health
care would get equal amounts of insurance coverage as physical illnesses, which often have no monetary
caps. However, this has not yet happened.
Mental health care is managed through privately
owned behavioral health care firms that often provide
the services as well as manage their cost. Persons
without private insurance must rely on their county
of residence to provide funding through tax dollars.
These services and the money to fund them often lag
far behind the need that exists. In addition, many persons
with mental illness do not seek care and in fact
avoid treatment. These persons are often homeless or
in jail. Two of the greatest challenges for the future
are to provide effective treatment to all who need it
and to find the resources to pay for this care.
The Health Care Finance Administration (HCFA)
administers two insurance programs: Medicare and
Medicaid. Medicare covers people 65 years and older,
with permanent kidney failure, or with certain disabilities.
Medicaid is jointly funded by the federal
and state governments and covers low-income individuals
and families. Medicaid varies depending on
the state, because each state determines eligibility requirements,
scope of services, and rate of payment for
services. Medicaid covers people receiving either Supplemental
Security Income (SSI) or Social Security
Disability Insurance (SSDI) until they reach 65 years
of age, although people receiving SSDI are not eligible
for 24 months. SSI recipients, however, are eligible
immediately. At 65 years of age, Medicare provides
the insurance. Unfortunately not all people who are
disabled apply for disability benefits, and not all people
who apply are approved. Thus, many people with
severe and persistent mental illness have no benefits
at all.
Another funding issue in mental health involves
spending caps by insurers for mental illness and substance
abuse treatment. Some policies place an annual
dollar limitation for treatment, while others
limit the number of days that will be covered annually
or in the insured person’s lifetime (of the policy).
There has been some support for parity (or equality)
of coverage for mental health and substance abuse
treatment. This means that insurers would provide
coverage for mental illness equal to coverage they
provide for medical illness or surgery. As yet, not all
states have passed and enacted legislation to provide
parity of coverage.
