Mental Health Care Costs Headache to Employers

By Porter, Sylvia | THE JOURNAL RECORD, May 31, 1990 | Go to article overview

Mental Health Care Costs Headache to Employers


Porter, Sylvia, THE JOURNAL RECORD


The growing cost of mental health care in the United States, paid out as employee benefits, is creating a massive headache for employers and their insurance companies. The result: Employees who seek help will be asked on an increasing scale to pay a larger share of the bill and will have less to say about the treatment.

About 20 percent of all Americans in their lifetime will suffer depression that will severely affect their job performance. Countless others will need therapy for disorders ranging from marital stress to substance abuse. By one estimate, the cost to business, including lost productivity, property damage and treatment, will be well over $300 billion in 1990.

Treatment of mental illness and substance abuse is, in most cases, much more intensive - and thus more expensive - than treatment of other illnesses, says the Employee Benefits Research Institute (EBRI). An EBRI study found that the average cost of an inpatient episode of mental health care was about three times greater than the average cost of other types of health care.

``The surge in mental health care costs, along with an even greater jump in the number of people seeking such care, has changed the way hundreds of U.S. corporations are helping employees solve emotional and chemical dependency problems,'' says Dr. John Tillotson, president of Managed Health Network. His company, headquartered in Los Angeles, has offices in 20 cities serving the two million employees of its 300 corporate and government clients.

Why do health care costs keep climbing? According to Dr. Tillotson:

- Left to their own devices, people under stress tend to select inappropriate and more costly providers. They may respond to listings in the Yellow Pages or to advertisements on television for hospitals and clinics.

- Treatment either in a hospital or as an outpatient in a provider's office frequently is unnecessarily long.

- Insurance companies tend to be traditional in their underwriting practices. They are willing to pay for hospitalization, but offer little or no reimbursement for less costly outpatient services with which they may be less familiar.

- There are no hard criteria for diagnosis and treatment. In too many cases a single provider diagnoses the problem, develops a treatment plan and carries it out. Many providers are locked into a specific treatment for all patients.

Reinforcing Dr. …

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