Therapy in L.A.


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June 1999
The Corporatization of Mental Health Care
By Joyce Parker, Ph.D.

The NASW Newsletter, a publication of the National Association of Social Workers, published several articles in their April 1999 issue concerning the erosion of mental health services in the era of managed care. These services are now being delivered by managed mental health care companies that are contracted to provide the mental health component of health insurance. Due to the merges of numerous managed mental health care companies, 84 percent of the marketplace is concentrated in the top 12 programs, with 60 percent in the top three programs. These programs are run by MBA's who have very little sympathy for patients and practitioners. Their concerns are strictly financial and profit is the bottom line. Here are some of the most glaring reductions and abuses.

  1. The value of behavioral health benefits(mental health care) declined by 54 percent, from $154 in 1988 to $69 in 1997. Behavioral health as a percent of the total health care benefit for employed people plummeted 50 percent in 10 years, from 6.2 percent in 1988 to 3.1 percent in 1997.
  2. In 1988 92 percent of all plans were fee for service; in 1997 only 20 percent were. Thus restricting choice of practitioner and number of sessions that can be used.
  3. There have been decreases in inpatient and outpatient mental health and substance abuse care. For outpatient care, the number of psychiatric visits decreased from 313 per 1,000 people in 1991 to 285 in 1996, an 8.9 percent drop.
  4. A study by the American Managed Behavioral Health Association found that unmanaged plans spend $22.18 monthly per person for behavioral health care versus $5.33 for preferred provider plans and $3.42 for HMO plans. The differential was largely accounted for by inpatient costs; $18 per month for unmanaged plans versus $2.83 for PPOs and $1.42 for HMOs. Outpatient costs ranged from $4.06 per month for unmanaged plans to $2.50 for PPOs and $1.92 for HMOs. These rates reflect the severe cuts in services and benefits to covered families and individuals.
  5. Managed care has also created conflicts with practitioners code of ethics. There are problems with maintaining confidentiality. Practitioners have to write detailed treatment plans that are FAXed or mailed to the insurance company. The managed care companies intrude into decisions about matters such as terminating treatment which should be jointly made by therapist and patient and based on the needs of the patient. The companies also have in some instances required the use of medication as a condition for continuing treatment. Such decisions should be based on self-determination.
What we are seeing is the corporatization of health care. It has been turned into a commodity that is judged on a profit and loss basis. The best interests of the patients are often ignored. The experiences of the State of Montana's medicaid managed mental health care contract with Magellan Behavioral Health, now the largest provider of mental health services in the country, are illuminating. Magellan began to micro-manage private practitioners rather than try to provide community-based services that might head off expensive hospitalizations. They reduced rates to $36 for an hour of therapy, a cut of almost 50 percent. Magellan notified private providers that unless clients were severely disturbed they could be seen only every two weeks. Magellan was also late in sending payments to regional mental health centers necessitating the closure for two weeks of one of the four centers. At a raucous public hearing jammed by angry providers and consumers, Magellan offered inadequate excuses for late payment. The committee voted to terminate dealings with Magellan and explore ways to develop a new delivery system.

In New York, a survey on managed care distributed to 36,000 people uncovered 200 horror stories from the health and mental health fields. Problem areas included denial of emergency services, barriers and disruption if care, inadequate appeal processes and inappropriate health care decisions. One of the stories involved a nine year old boy who had attempted suicide. He suddenly found himself without treatment when his therapist for over a year was dropped from his managed care organization without explanation. The company refused to allow the therapist to continue treatment. These continuity of care problems are widespread. Managed mental health care companies have very little respect for the patient-therapist relationship.

What we need to see is a revolution driven by consumers and providers. We have put up with unchecked managed care for too long.

The author of this article, and founder of the website, Joyce Parker, passed away in 2011. To honor her we are keeping her articles posted at this website.

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