Quality standards and incentives in managed care organizations' specialty contracts for behavioral health.
BACKGROUND
In the US, most privately insured individuals are enrolled with managed care organizations (MCOs), and a majority of these organizations have subcontracted responsibility for behavioral health care to specialized vendors. Based on economic theory, we anticipate that MCOs should be more likely to require quality standards in contracts that transfer all financial risk to the vendor.


OBJECTIVE
To test whether use of quality standards in behavioral health subcontracts differs between MCOs that transfer full financial risk and other MCOs. Similarly, to test for differences between for-profit and nonprofit MCOs.


METHODS
Bivariate tests and logistic regression analysis of the use of five quality-related standards, and the use of any standard, in a nationally representative sample of commercial MCO products in 60 US market areas. Statistical controls include MCO size, chain affiliation, region and market size.


RESULTS
All five standards we examined were widely used in behavioral health subcontracts (varying from 47% to 70% of products). However, contrary to our hypothesis, the standards are not more commonly used by MCO products with unlimited capitated contracts for behavioral health. In most cases the opposite is true. In addition, for-profit plans were more rather than less likely to use several of the standards.


CONCLUSIONS
MCOs that transfer full risk may be using mechanisms other than quality standards (e.g. periodic rebidding) to prevent skimping; may be less concerned about quality anyway; or may be more skeptical about the value of existing standards. The fact that for-profit plans are equally or more likely to use these standards may reveal that their objectives are not different from those of nonprofits, or that competition is constraining them to adopt standards anyway. Limitations of this study include the lack of more detailed data on the nature of financial risk-sharing, and on the types of financial penalties associated with each standard.


CONCLUSIONS
Pressure for accreditation appears to be an effective vehicle for encouraging the spread of standards. It would be useful to know how far use of these quality standards in contracts is linked to better quality of care.


CONCLUSIONS
Further studies should examine the relationship between quality standards and quality of care
Hodgkin
Dominic
D
Heller School, MS 035, Brandeis University, Waltham, MA 02454-9110, USA. hodgkin@brandeis.edu
Horgan
Constance M
CM
Garnick
Deborah W
DW
Merrick
Elizabeth L
EL
D001521:Behavior Therapy / Q000191:economics / Q000592:standards*; D002204:Capitation Fee / Q000592:standards; D003132:Commerce / Q000191:economics / Q000592:standards; D003284:Contract Services / Q000191:economics / Q000592:standards*; D017047:Cost Sharing / Q000592:standards; D004465:Economic Competition / Q000191:economics; D006801:Humans; D008329:Managed Care Programs / Q000191:economics / Q000592:standards*; D008605:Mental Health Services / Q000191:economics / Q000592:standards*; D018803:Models, Economic; D011787:Quality of Health Care / Q000191:economics / Q000592:standards*; D012052:Reimbursement, Incentive / Q000191:economics / Q000592:standards; D014481:United States