Impact of a Managed Behavioral Health Care Carve-Out: A Case Study of One HMO

Anne E. Brisson, Richard G. Frank, Elizabeth S. Notman and Julie A. Gazmararian

No 6242, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this study we examine a case study of a carve-out for mental health and substance abuse services between a local plan of a national HMO (N=120,213) and a local managed behavioral health care vendor (MBHC). This is one of the first studies which estimates the impact of an HMO carve-out on costs and patterns of MH/SA care. Three years of insurance claims data (1993-1995) were used for the analyses, with a new carve-out contract implemented in May 1994. The new carve-out arrangement included a new vendor, a change in the organizational structure of clinical services, and increased financial risk to the vendor for inpatient care. Descriptive and empirical analyses are reported on a continuously enrolled population (N=49,529). Results from the analyses showed the new carve-out arrangements had a significant impact on spending and utilization of services. Enrollees were 20% less likely to use MH/SA services after the implementation of the new carve-out, and inpatient MH/SA utilization dropped 50% under the new carve-out. Overall, MH/SA spending per enrollee dropped from approximately $4.90 per month to $2.20 per month. Outpatient MH/SA spending per user dropped 35% after the implementation of the new carve-out. Further research should be conducted to evaluate the impact on access and quality of care, given the substantial decrease in utilization and spending.

JEL-codes: I11 (search for similar items in EconPapers)
Date: 1997-10
Note: EH
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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