Therapy in L.A.


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October 2000
Summarized by Alan Solomon, Ph.D.

A variety of studies have shown that providing psychotherapy as part of health care coverage actually reduces medical costs. A few examples include:

  • A three year study in Hawaii of Medicaid patients and federal employees showed that brief, focused mental health treatment added to medical treatment reduced total benefit costs by about one-third. Medical costs were measured by doctor visits, drug prescriptions, diagnostic procedures, emergency room visits, and days spent in the hospital.
  • Short-term mental health treatment reduced the use of medical services from 5.5 annual outpatient visits to 3.5 in a two-year study of veterans. These veterans had been identified as making "excessive use" of the health care system. A comparison group, who had no psychotherapy, continued to increase their use of the health care system.
  • When mental health services were introduced for 10,000 Aetna subscribers, medical costs dropped progressively over the next 36 months. Health costs went from $242 per person in the year before mental health benefits to $162 two years later.
  • McDonnell Douglas has used a mental health benefit with no constraints since 1989. In the first year, this benefit led to a 50% decrease in psychiatric inpatient admission costs, and a 34% decrease in per capita mental health cost.
Many more such instances are cited in the New York State Psychological Association Newsgram on Managed Care in June 2000. Psychological services, especially generous benefits for psychological care, reduce health care costs. There is no economic benefit from restricting access to psychological services, nor from closely managing the utilization of these services.

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