Health care coverage for the poor
In recent study, mental health patients fared well on managed care

By Sarah Yang, Public Affairs

24 April 2002 | Two years after Colorado's Medicaid program switched to a managed care system for its mental health patients, costs for providing care were significantly reduced without negatively affecting patient outcomes, according to a new study led by campus researchers.

The results were published April 23 in the journal Health Services Research. Patients studied were both poor and severely mentally ill, which many feared would leave them vulnerable to lower quality care in cost-reduction settings.

"Conventional wisdom says these patients are the ones who fall through the cracks," said Joan Bloom, professor of health and policy management at the School of Public Health.... "Our findings show that it doesn't have to be that way."

"The study results indicate that managed care can work well under certain circumstances," she said.

Colorado passed legislation in 1992 to switch its Medicaid mental health services from the traditional fee-for-service system to one under managed care, also known as capitation. At least 32 states — including New York, Utah, Massachusetts, Minnesota and California — are in the process of moving their Medicaid mental health patients into managed care programs.

Researchers studied adult patients who were diagnosed with schizophrenia or bipolar disorder, or who had at least one 24-hour psychiatric hospital stay in the prior year.

They found that non-profit managed care areas saw a 19 percent drop in costs per person, while for-profit managed care areas saw cost reductions of 70 percent per person.

The study also found changes in access patterns in managed care plans. Patients in non-profit capitation programs reported an increased incidence of services being refused, discontinued or reduced. Those in for-profit managed care plans reported significantly longer waiting times.

But the reports of reduced access did not translate into measurably poorer outcomes for the patients, the researchers said.

No significant differences were found in the severity of patients' psychiatric symptoms, ability to function or quality of life.