Academic journal article The Israel Journal of Psychiatry and Related Sciences

Some Early Lessons from the Rise of Managed Behavioral Health Care in the United States / Commentary

Academic journal article The Israel Journal of Psychiatry and Related Sciences

Some Early Lessons from the Rise of Managed Behavioral Health Care in the United States / Commentary

Article excerpt

John E. Schowalter, MD

Yale Child Study Center, New Haven, Conn., USA

Address for correspondence: John E. Schowalter, MD, Yale Child Study Center, POB 207900, New Haven, Connecticut 06520-7900, USA

Abstract: In the 1990s the United States has, because of an unacceptable surge in health care costs, made a revolutionary shift of the reimbursement process from fee-for-service to managed care's restricted, discounted and capitated payment approaches. Mental health care has for 150 years largely been subsidized by tax supported hospitals and clinics. Federal and state governments have recently instead begun to direct much of their monies to for-profit national managed mental health care companies. While efficiency has improved and the steep rise in costs has been eased, the major drawback of this change is a too enthusiastic focus on corporate profits. Since on the whole managed care organizations do not reinvest profits into medical education or research and may pull out of the health care business once the business is no longer so profitable, clinicians and academicians must become more successful in urging politicians and the citizenry to better manage managed care.

There is a saying that if you have seen one managed health plan, you have seen one managed health plan! Rather than begin with a lengthy list of specific caveats, I suggest instead the serious consideration of that first sentence. In the US, managed care is a work in progress. It is growing piecemeal and chaotically. Therefore, there will be exceptions, somewhere at some time, to probably all that is written here. The trends noted, however, are the majority trends and are those that seem to have most momentum at present.

A Brief Historical Background

Until two generations ago, almost all health care in the US was either paid for through currency, barter, local charity or by government support. The latter was particularly true for mental health services. During the Great Depression of the 1930s, payments from patients became unavailable to physicians and hospitals. To avoid recurrence of this in the future, the medical community supported the creation of health insurance schemes. Such insurance paid physicians a fee-forservice, and actuarial savvy allowed many relatively small individual premiums to assure that health care providers got paid and patients did not become bankrupt if they developed an expensive or chronic condition. In addition to this mainstream insurance pay-the-doctor's-fee approach, in the 1930s some prepaid group health plans also were established. Two notable examples of this approach are the Kaiser-Permanente Health Care Plan in California and the Health Insurance Plan (HIP) of Greater New York. These plans consisted of an exclusive panel of staff clinicians, and members' insurance premiums were pooled to pay the staff's annual salaries, rather than for individual fees-for-service. The pioneer leaders of these groups tended to be idealistic, decided how the group would practice (therefore "managed") and had a greater-than-usual focus on preventive medicine. Doctors in these prepaid plans were rebuked by mainstream medical practitioners and organizations as practicing "leftist" or "socialized medicine." In fact, they were what are now called closed staff model health maintenance organizations (HMOs). In the mid-1960s, the US Congress realized that many of the nation's elderly, children and disabled were not personally able to afford health insurance. Government entitlement programs, called Medicare and Medicaid, were developed to insure the uninsurable. At first the medical community also saw these plans as repugnant examples of socialized medicine. However, hospitals and physicians quickly realized that they were now paid for what was previously charity work. Soon, more physicians chose to see these poor patients, more hospitals were built and more medical schools were opened. Since insurance fee schedules paid specialists more than they did generalists for the same service, the majority of medical school graduates soon chose to become specialists. …

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