The Relationship between Type of Insurance, Time Period and Length of Stay in Psychiatric Hospitals: The Israeli Case

Article excerpt


Background: According to the current standard of practice in modern medicine, medical decision-making is often forced to comply with stipulations of the insurance provider. In the field of psychiatry, there has been a trend of shortened psychiatric hospitalizations which some have suggested may be due to pressures related to insurance coverage. In Israel, soldiers have comprehensive medical coverage provided by the military, and this coverage includes full payment for psychiatric hospitalizations. Incontrast, Israeli civilians are insured by the government according to a global payment system. In this study, we aimed to examine differences between these two groups in terms of length of stay (LOS) in psychiatric hospitals.

Methods: Data on psychiatric admissions of soldiers (aged 18-21) spanning the past 30 years was obtained from the military database (N=2,106). Corresponding data was collected on first psychiatric hospitalizations of a cohort of matched civilians (N=6556). The mean LOS of the two groups was compared.

Results: Civilians had a significantly longer LOS than soldiers. Moreover, LOS decreased between the seventies and the nineties for both groups, and the decrease was observed for all diagnoses regardless of disease severity.

Discussion: We conclude that in the managed care era, economic considerations may at times take precedence over psychiatric ones, irrespective of the degree of severity of illness. The parallel process is manifested in a general trend towards deinstitutionalization in the United States, Canada and Europe.


The term "managed care" is often used in the medical literature to describe how cost-effectiveness considerations influence all levels of decision-making processes in medical settings (1-4), including assignment of resources (e.g., drugs, medical procedures) and medical services (e.g., counseling, waiting lists), as well as conditions of the hospitalization per se (patients per room, LOS) (5). It is argued that financial factors may create a conflict of interests in the service-provider-patient relationship (6). Over the last two decades, two new factors have been introduced into the service-providerpatient relationship in Western countries: the organization (the government or the employer) and the insurer (4-9). This has led to a situation in which the service provider, who in the past was committed only to the patient, is now also committed to the insurer, who pays for the treatment. When the patient's interest (optimal medical treatment) is incongruent with the interest of the insurer (maximum profit and minimum cost), the service provider is forced to find a compromise position (6, 10, 1 1). Thus in the current environment of financial stress, hospitalizations may in some cases tend to be shorter irrespective of the patient's best interest.

This delicate situation, plaguing medicine in general, becomes more complex in the field of psychiatry, which suffers from problems of subjective diagnostic criteria and high rates of comorbid mental illness (12-15). Service providers (e.g., hospitals) may be interested in diminishing costs and remaining profitable, whereas insurers (e.g., governments) may wish to cut their expenses. This may be one of the reasons for the significant decline in mean LOS and quality of psychiatric admissions across the United States (1, 16-18). Psychiatrists are under constant pressure from hospitals that refuse to hospitalize chronic psychiatric patients who usually have poor quality medical insurance (19, 20). The hospitals, in turn, are under pressure from insurance companies which are interested in decreasing the LOS. In cases where the insurer paid hospitals a fixed global fee in advance for a given period, hospitals preferred patients who were likely to be hospitalized for shorter periods over patients who required a prolonged period of hospitalization (9). When a fee-for-service system (payment given per days of hospitalization) was compared to a global payment strategies (fixed fee paid in advance), hospitals tended to establish stricter criteria for discharge and to extend the LOS (2, 5, 7, 8). …