|Medicaid Managed Care Plans Place More Burden On Patients And Families
Managed care health plans for Medicaid patients with
schizophrenia and other severe mental illnesses may result in lower
costs to the Medicaid system, but lead to greater personal expenditures
and higher caregiver burden for patients and their families, new
The cost pattern was revealed in an analysis of total societal costs for 628 patients in the Tampa Bay area.
The study, "Medicaid Managed Care and the Distribution
of Societal Costs for Persons With Severe Mental Illness," by David L.
Shern, president and CEO of Mental Health America, and colleagues at
the Louis de la Parte Florida Mental Health Institute at the University
of South Florida in Tampa.
The comparison was based on a natural experiment in
1997-1999 that resulted from the state of Florida’s inaugural
attempts to manage community mental healthcare through a Medicaid
waiver for the Tampa Bay area, researchers said.
Two types of managed care plans were introduced: a
health maintenance organization (HMO) and a plan with a behavioral
health "carve-out," which provided mental healthcare and general
healthcare through separate systems, researchers said.
The patients enrolled in the HMO and those in the
carve-out actually received services from the samecommunity mental
health center providers. Therefore, Shern and his colleagues said, any
differences between the managed care plans reflect the plans
themselves, not the care providers.
The analysis compared costs for patients in the two
managed care plans and those who remained in the standard
fee-for-service Medicaid plan.
Total societal costs were calculated by adding separate
estimates for Medicaid, other government programs, and private sources.
The other government programs included non-Medicaid healthcare,
criminal justice, public housing, supplemental security income and food
stamps, researchers said.
The private sources were earned government transfer
income (such as veterans’ benefits), private income, and money
and time contributed by family and friends. The financial value of this
time was based on the minimum wage, and this informal care accounted
for the majority of the private costs reported.
The managed care strategies employed by plans led to
savings within the Medicaid budget, but these savings were offset by
personal expenditures and the contributions of family and friends of
the enrollees in the managed care plans.
Managed care was not associated with increased overall costs to non-Medicaid government programs, researchers said.
Despite the Medicaid-specific savings, society’s
total costs were not reduced by managed care. This wider public health
perspective is especially important when considering patients with
long-term disabling illnesses, who have multiple needs that cross
different types of services and payers.
Although an earlier report by the same authors indicated
similar clinical outcomes for the patients in the three plans studied,
the outcomes may have depended in part on substantial contributions
from families and friends. Cost substitution may further impoverish
already destitute individuals and result in inefficient treatment,
The study will be published in The American Journal of Psychiatry.
Address: Louid de la Parta Florida Mental Health
Institute, University of South Florida, 3301 Bruce B. Downes Blvd.,
Tampa, FL 33612; (813) 974-4602, www.home.fmhi.usf.edu.