Managed Behavioral Health Care

The term "behavioral health" refers to mental health and substance abuse services provided by behavioral health specialists. Managed behavioral health benefits are subject tothe general forces of managed care while also facing unique issues and challenges of their own. In recent years there has been a heightened focus on behavioral health benefitsbecause they are a key contributor to increased employee productivity and lower medical costs. Of an estimated 250 million Americans with health insurance, 66 percent are enrolled in some type of specialty managed behavioral health program.

Mental Illnesses and Other Behavioral Disorders

The most severe mental illnesses such as schizophrenia, bipolar disorder and major depressive disorder are generally considered biologically based disorders that affect thebrain, profoundly disrupting a person's thinking, feeling, mood, ability to relate to others and capacity for coping with the demands of life. They cannot be overcome through "will power" and are not related to a person's character or intelligence. Nonbiologically based mental disorders can also severely impact an individual's functioning. Early identification and treatment is of vital importance; according to Dr Thomas Insel, Director of the National Institute of Mental Health, between 70 and 80 percent of individuals suffering from depression experience significant reduction of symptoms and improved quality of life through psychotherapy and/or medication.

Mental disorders can loosely be categorized into the following categories:

1. Adjustment disorders (e.g., situational stress).
2. Anxiety disorders (e.g., panic disorder).
3. Childhood disorders (e.g., autism).
4. Eating disorders (e.g., anorexia).
5. Mood disorders (e.g., major depressive disorder).
6. Cognitive disorders (e.g., dementia).
7. Personality disorders (e.g., antisocial personality disorder).
8. Psychotic disorders (e.g., schizophrenia).
9. Substance-related disorders (e.g., alcohol/drug dependence).

The most serious and disabling conditions such as major depression, schizophrenia, bipolar disorder, panic disorders and obsessive compulsive disorders affect five to 10 million adults (2.6 to 5.4 percent) and three to five million children ages five to 17 (5 to 9 percent) in the United States.

The Need for Behavioral Benefits

Behavioral disorders can have a devastating impact on affected individuals, their families and society. Mental illness is the number one cause of disability in the United States, Canada and Western Europe, according to a 2001 study by the World Health Organization. It has now surpassed heart disease, which was the leading cause of disability as recently as 1996. Alcohol consumption accounts for up to 40 percent of industrial fatalities and 47 percent of industrial injuries. A study published in the American Journal ofHealth Promotion found that workers experiencing high stress are more than two times more likely to be absent more than five times per year. Given these alarming statistics, it stands to reason that health care benefit purchasers gain from providing their workforces with relatively inexpensive mental health, chemical dependency and employee assistance programs that cover the full spectrum of behavioral needs. Unfortunately, behavioral benefits are the least understood and most poorly compensated of all thepossible components of a health benefits package.

Common Misperceptions

Most people are unaware of the possible inadequacy of behavioral health benefits found in insurance plans, since it is falsely assumed that mental health and chemical dependency treatment needs are fully covered under medical plans, and in addition, that employee assistance programs fill in the gaps. Unfortunately, these are common misconceptions. The mandated behavioral benefits in a medical plan are limited to emergency assessment and crisis coverage. Mental health "parity" riders—legislatively mandated add-ons to medical benefit plans—are limited in the scope of disorders they cover. Employee assistance programs focus on workplace productivity, and offer only a limited number of visits for emotional counseling. To fully understand behavioral health benefits and the multitude of ways they are structured, it helps to take a brief look at thegrowth of the managed behavioral health care industry.

COST CONTAINMENT AND MANAGED CARE

Between 1970 and the early 1990s, the average annual increases in the cost of medical care were approximately twice the average annual increases in the consumer price index. No single factor accounts for these increases. Rather, it was a combination of the following reasons:

Technological advances. In the last few years, many exciting technological advances have taken place. Numerous lives are now being saved by such techniques as CAT scans, MRIs, fetal monitoring, and organ transplants. As miraculous as many of these techniques are, they are also very expensive. Technological advances can also prolong the life of the terminally ill and increase associated medical expenses.

Increasing malpractice suits. The providers of care are much more likely to be sued than in the past, and malpractice awards have outpaced the general rate of inflation. This development has resulted in higher malpractice insurance premiums, a cost that is ultimately passed on to consumers. The increase in malpractice suits has also led to an increase in defensive medicine, with routine tests likely to be performed more often.

Increases in third-party payments. A growing portion of the country's health care expenditures is now paid by private health insurers or the government. Patients and providers of health care often have no financial incentives to economize on the use of health care service.

Underutilization of medical facilities. Currently, the United States has an overabundance of hospital beds, and a surplus of physicians is also beginning to develop. Empty hospital beds are expensive to maintain, and an oversupply of physicians tends to drive up the average costs of medical procedures so that physicians' average income does not drop.

Design of medical expense plans. Many medical expense plans now provide first-dollar coverage for many health care costs. There is often little incentive for patients to avoid the most expensive forms of treatment.

AIDS. The continuing increase in the number of AIDS cases over the past 10 years has resulted in increasing costs to employers. Costs in excess of $100,000 for an employee with AIDS are not unusual.

An aging population. The incidence of illness increases with age. Current demographics indicate that this trend will be a source of cost increases for several years to come.

During the period from 1994 to 1996, several factors caused the cost of medical expense coverage to remain uncharacteristically stable, particularly for managed care plans. Many providers of medical services and medical expense plans were reluctant to raise costs while the Clinton health care proposal was being debated. In addition, managed care plans were holding down premiums while actively increasing enrollments.

However, the late 1990s started to see significant increases in health care costs, particularly because of skyrocketing costs for prescription drugs. There is a feeling among benefit consultants that expanding managed care plans have saturated the market to the point that savings resulting from additional employees moving to managed care plans will be modest. There is also an interesting trend occurring among medical providers. The large number of mergers of hospitals and other providers of medical services in many parts of the country may in fact shift the balance of bargaining power to these providers from managed care plans and other buyers of medical services. In addition, costs will increase somewhat because of federal and state legislation that continues to mandate benefits.

Increasing health care costs have become the concern of almost everyone—government, labor, employers, and consumers. In this introduction to cost containment, many of the measures employers use are enumerated.