Managed Care and Vulnerable Populations

Managed Care and Vulnerable Populations:

Adults with Serious Mental Illness

Core Paper 1: Sample Survey Component

A Grant Funded Program Sponsored by:

CSAT CSAP CMHS

SAMHSA

Adults with Serious Mental Illness Study: Core Paper 1

CONTRIBUTORS
OREGON
Department of Psychiatry
Oregon Health & Science University
Portland, OR / Bentson H. McFarland, M.D. Ph.D.
Principal Investigator
Jacqueline Bianconi, MS
Lori Danker, RN
Jo Mahler, MS
FLORIDA
Florida Mental Health Institute
University of South Florida
Tampa, FL / David L. Shern, Ph.D.
Principal Investigator
Roger Boothroyd, Ph.D.
Julienne Giard,M.S.W.
Mary Murrin, M.A.
Susan Ridgely
Patricia Robinson
Kristen Snyder
Paul Stiles, J.D., Ph.D.
HAWAII
Department of Psychology
University of Hawaii at Manoa
Honolulu, HI / A. Michael Wylie, Ph.D.
Principal Investigator
Jeffery H. Nathan, Ph.D.
PENNSYLVANIA
University of Pennsylvania
Center for Mental Health Policy and Services Research
Philadelphia, PA / Aileen Rothbard, Sc.D.
Principal Investigator
Jeffrey Draine, PhD.
VIRGINIA
Cecil G. Sheps Center for Health Services Research
University of North Carolina at Chapel Hill
Chapel Hill, North Carolina
and
Southeastern Rural Mental Health Research Center
University of Virginia
Charlottesville, Virginia / Joseph P. Morrissey, Ph.D.
Principal Investigator
Scott Stroup, M.D., MPH
Elizabeth Merwin, Ph.D.
Yasar Ozcan, Ph.D.
COORDINATING CENTER
Human Services Research Institute
Cambridge, MA / H. Stephen Leff, Ph.D.
Study Leader
Mathew Hoover
Barbara Raab
Dow Wieman, Ph.D.

Adults with Serious Mental Illness Study: Core Paper 1

TABLE OF CONTENTS

I. INTRODUCTION 1

II. BACKGROUND 2

Managed Behavioral Health in the Public Sector 2

Hypothesized Effects of Managed Care 4

III. LITERATURE REVIEW 5

Evaluations of Public Sector Managed Behavioral Health Care 5

IV. METHODS 9

Testing the Managed Care Hypotheses 9

Equivalence Analysis 11

Statistical Difference and Equivalence 12

Conceptualization of Managed Care 13

Conceptualization of Time 14

Sites and Programs 14

Subjects 17

Subject Selection Procedures 17

Subject Characteristics 19

Attrition 22

The Managed Care Interview 22

Background Variables 24

Impact Variables 25

V. STATISTICAL METHODS 29

Adjustment for Covariates 29

Difference Analysis. 29

Equivalence Analysis 31

Possible Differences Attributable to Models of Managed Care 32

Possible Differences Attributable to Time 32

Homogeneity 32

VI. RESULTS AND DISCUSSION 33

Difference-Equivalence Findings by Domain 36

Homogeneity 39

Summary Of Difference-Equivalence Relationships 39

Selective Enrollment and Retention 41

Subgroup Analyses 42

Changes Over Time 43

VII. SUMMARY 44

Study overview 44

Summary of support for managed care hypotheses 45

Further Research 48

VIII. REFERENCES 50

APPENDIX A: THE MANAGED CARE INTERVIEW

APPENDIX B: COMMON SERVICE CATEGORIES

APPENDIX C: MEASURE PROFILES

APPENDIX D: COVARIATE CORRELATIONS WITH STUDY DOMAINS

APPENDIX E: SUB-GROUP DIFFERENCE-EQUIVALENCE ANALYSES

Adults with Serious Mental Illness Study: Core Paper1

I.  INTRODUCTION

Managed care refers to a set of strategies for controlling service utilization. The most notable of these is capitation, a system of financing whereby providers receive a fixed payment to provide care as needed for an enrolled population. The alternative to capitation is fee for service financing, whereby providers are reimbursed for delivering service on the basis of how much they provide. This paper describes a multi-site study that compares managed and fee for service programs for delivering public sector behavioral health care to adult persons with serious mental illness at five locations throughout the United States.

The study, known as the Adults with Severe Mental Illness (SMI) Study, is part of a larger study, entitled the Managed Care and Vulnerable Populations Evaluation Project. The large study encompasses a total of 21 sites in 10 states includes and includes, in addition to adults with SMI, three additional target populations: adults with chemical dependency, adolescents with substance abuse disorders, and children and adolescents with severe emotional disorders, (Coordinating Center for Managed Care and Vulnerable Populations Evaluation Project 1998).

The Adult SMI study comprises three major components: 1) a sample survey study of service use, quality, outcomes, and satisfaction for samples of individuals enrolled in managed care and fee for service groups, based on data from two consumer interviews six months apart data; 2) a population data study focusing on service use and costs as determined from claims and encounter data for all Medicaid recipients in the target service areas prior to, and after the introduction of managed care; and 3) a study to develop a taxonomy of managed care organizations, focusing on the managed care strategies and organization arrangements in each of the study sites.

This paper presents findings from the sample survey component of the Adult SMI study. Findings include the numbers of persons receiving services, the types and amounts of mental health, psychosocial, alcohol and other drug (AOD) and health services received, the types of medication received, service quality, and consumer outcomes and satisfaction. A subsequent paper will present findings from administrative and claims data from the prospective study.

II.  BACKGROUND

Managed Behavioral Health in the Public Sector

The transition from fee for service to managed care in the public sector occurred relatively recently, largely since the mid-1990's after it was nearly complete in private insurance. The process began with states seeking to control Medicaid costs, which had been rising rapidly in the 1980's, by making use of the Health Care Financing Administration (HCFA) "waiver" regulations to implement managed care programs for general health care. Within a few years nearly every state operated some form of Medicaid managed care program (Lewin Group 1998). Between 1991 and 1998, the number of Medicaid recipients enrolled in managed care programs increased six-fold, from 2.7 to 16.6 million (Kaiser Commission on Medicaid and the Uninsured 1999).

Initially, states implementing Medicaid managed care programs tended to retain mental health benefits under fee for service arrangements, especially for beneficiaries whose eligibility was based on disability (i.e. recipients of Social Security Disability Insurance) (Callahan, Shepard et al. 1995). As the states gained experience managing general health care for the Aid to Families with Dependent Children/Temporary Assistance to Needy Families (AFDC/TANF), however, they began to manage mental health benefits and to enroll disabled in managed care programs. Typically these were structured as carve-out programs, i.e. specialty programs established to manage mental health and substance abuse benefits separately from general health care (Frank, Huskamp et al. 1996).

These programs may be operated by private for-profit managed care organizations (MCO's), by public agencies at the state, county or even city level, or by some combination of private for-profit and public non-profit organization. In the study described here, two of the five sites represent for-profit MCO's, two represent non-profit managed care programs, and one is a mixed model, with a non-profit organization sub-contracting with a for-profit MCO.

In other respects managed care programs are heterogeneous, with much variation in characteristics such as relationship to general health care benefits (e.g. integrated versus carve-out), techniques of utilization management, manner and extent of risk sharing, specifics of benefits packages, and provisions of the contracts between public agencies and private MCO's, and between MCO's and providers (Gold and Hurley 1997; Lewin Group 1998; Rosenbaum, Shin et al. 1998; Rosenthal 1999). This heterogeneity characterizes the managed care programs included in the present study as well (Mulkern 1999)

The states have implemented these programs in advance of much empirical evidence concerning their effects (Mechanic, Schlesinger and McAlpine, 1995). HCFA requires, as a condition of receiving a waiver, that states obtain an independent evaluation, and the health services research community, including federal funding agencies and private foundations has demonstrated considerable interest in these policy initiatives. The pace of implementation, however, combined with the considerable challenges for research design has resulted in findings beyond the level of case studies being relatively sparse to date, as indicated below (Leff and Woocher 1998). The multi-site study described in this paper will provide the most comprehensive data on public sector managed care to date.

Hypothesized Effects of Managed Care

Managed care developed as a response to rising health care costs. Proponents of managed care assert that it contains cost while improving service access, quality, and outcomes. Detractors assert that the financial incentives in capitated managed care lead to poorer quality of care. These assertions may be construed as hypotheses. Thus, we refer to the assertion that managed care controls costs while improving care as the panacea hypothesis. The countervailing view that it results in poorer care across the board is the perverse incentive hypothesis. Other hypotheses are possible, as well. One is that managed care has no effect on quality and outcomes due to the distance between changes in organization and financing and provider practices (the no difference hypothesis). Another is that managed care effects vary for different impact areas or subgroups (the mixed effect hypothesis) due to the complex patterns of financial and clinical risk associated with different subpopulations. One version of the mixed effects hypothesis, tested here, is that the panacea hypothesis applies to persons who are more severely disordered, while the perverse incentive or no difference hypotheses might apply to less-disordered individuals (Leff, Lieberman et al. 1996). The rationale for this prediction is that the needs of the most severely ill are so evident and so pressing that even a minimally adequate system will be compelled to respond appropriately, whereas the less apparent needs of less severely ill consumers may be neglected in a substandard system of care.

Although these hypotheses have been tested by some outcomes research and evaluation (Mechanic, Schlesinger et al. 1995; Leff, Lieberman et al. 1996), policy makers have relied more upon qualitative guides based on summaries of state activities and case studies produced by government agencies and policy institutes (National Academy for State Health Policy 1997; Rosenbaum, Shin et al. 1998; Substance Abuse and Mental Health Services Administration 1998), as well as anecdotal evidence and the experience of the consulting firms that often serve functions such as readiness assessment, actuarial projections, program design, and contracting (Bailit and Burgess 1999).

III.  LITERATURE REVIEW

Evaluations of Public Sector Managed Behavioral Health Care

Leff, Wieman, and Woocher conducted a systematic literature search for reports on evaluations of public sector managed behavioral healthcare programs. From the results of this search, they included quantitative studies involving comparative analyses of public-sector behavioral health programs for adults with serious mental illness (Leff and Woocher 1998; Leff and Wieman 2000). The search produced 20 published and two unpublished articles that passed our inclusion and exclusion criteria. A recent search by Grazier and Eselius (1999) similar to this, but limited to carve-out programs and broadened to include private sector plans, produced similar results. The 22 reports were the products of 15 separate studies, involving eight different managed care plans. (Findings cited in multiple reports from a single research project are combined in the following summary.) The reported studies involved eight managed care plans in the following states: Arizona, California, Colorado, Massachusetts, Minnesota, New York, Wisconsin and Utah. These plans were implemented between 1987 (3 plans) to 1995 (1 plan). Thus, they represent a relatively early phase in the development of public sector managed care, demonstrating one of the obstacles to knowledge application: the lag time to publication.

Table 1 presents characteristics of the studies reviewed. One-third employed randomization, with the remaining ten relying on quasi-experimental or pre-experimental designs. The largest number employed claims data (n=9) or other administrative data (n=5). The predominance of this type of data is likely because it is the most accessible, and also because it lends itself to the cost estimates and projections that are a major interest of policy makers and managed care organizations. Likewise, of the domains assessed, utilization and cost predominate (eleven and nine studies respectively). All fifteen of the reports involved comparison between managed care and fee for service systems; none compared different types of managed care organization. Two-thirds reported having applied some form of risk adjustment in the data analysis.

Table 1. Characteristics of studies reviewed
Characteristics of Studies / Number
of Studies
(N=15)
Research Design
Experimental / 5
Cross-sectional/Cohort Study / 5
Nonequivalent Comparison Groups / 4
Single Group Pre-Post / 1
Source of Data
Claims/Encounter / 9
Other Administrative Records / 5
Consumer / 5
Clinician/Staff / 4
Medical Records / 2
Family / 2
Provider / 1
Impacts/Effects Measured
Service Utilization / 11
Costs / 9
Quality / 7
Access / 5
Consumer Functioning / 5
Consumer Symptoms / 4
Consumer Satisfaction / 2
Consumer Health Status / 2
Family Experiences / 2
Other / 2
Provider Satisfaction / 1
Risk/Case Mix Adjustment?
Yes / 10
No / 5

Table 2 summarizes findings from the fifteen studies reviewed here. This summary shows only whether the effect of managed care is statistically significant and if so, in which direction. It is evident that the most consistent finding is decreased utilization and cost of inpatient services, identified in eight of the 11 studies examining this variable. This finding reflects the primary goal of most managed care programs and the number of studies examining this variable reflects the primary interest of most policy makers. With respect to the four hypotheses cited above (panacea, perverse incentive, no difference and mixed effect), the findings of decreased hospital utilization are inconclusive since the studies report no data related to need for treatment or outcomes.

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Adults with Serious Mental Illness Study: Core Paper1

Table 2. Summary of findings from 15 studies of public sector managed behavioral health care programs
Effect of Managed Care (Number of Studies)
Domain / Increase / Decrease / Mixed / No Effect
Utilization
Inpatient / 2 / 8 / 1
Outpatient / 2 / 2 / 3
Costs/Expenditures
Inpatient / 1 / 3 / 1
Outpatient / 2 / 2 / 1
Total (e.g. medical, social) / 2 / 6 / 1
Access / 3 / 2
Quality / 1 / 4 / 2
Consumer Outcomes / 1 / 2 / 1

Fewer studies examined outpatient utilization and/or costs, and for those that did, these findings are more equivocal. The number of studies examining access, types and amounts of services, outcomes and satisfaction drops off considerably, and the results are even less conclusive. Many studies report mixed findings in these areas because they employ multiple measures (for example, number of rehospitalizations and time to outpatient follow-up visit as measures of quality) yielding diverse results that are difficult to interpret, except as they support the mixed effect hypothesis, i.e. variable impacts depending on domain and/or subpopulation.