Cost shifting to jails after a change to managed mental health care.
OBJECTIVE
To determine whether managed mental health care for Medicaid enrollees in King County, Washington, has led to indirect cost-shifting to substitute treatments, such as jails and state mental hospitals that are free goods to providers.


METHODS
Complete service records for 47,300 adults who used at least one of the following systems from 1993 to 1998: King County jail system, Medicaid, or the King County mental health system. Data were also obtained from the Washington State Hospital System.


METHODS
A quasi-experimental analysis that compares the difference in outcomes between the pre- and post-managed care periods for Medicaid enrollees compared to non-Medicaid enrollees. The outcomes-jail costs, state hospital costs, and county outpatient mental health costs-were estimated with two-part difference-in-differences models. The regressions control for person-level fixed effects on up to 66 months of data per person.


METHODS
Administrative data were collected from the jail, Medicaid, and mental health systems, then merged and cleaned. Additional data on costs were obtained in interviews.


RESULTS
There is a striking increase in the probability of jail use for persons on Medicaid following the introduction of managed care. There was a significant decrease in expenditures in the county mental health system for outpatient care.


CONCLUSIONS
Managed care led to indirect cost-shifting, probably through poor access to services, which may have led to an increased probability of jail detention.
Domino
Marisa Elena
ME
Department of Health Policy and Administration, CB #7411, McGavran-Greenberg Building, University of North Carolina at Chapel Hill, Chapel Hill, NC 27599-7411, USA.
Norton
Edward C
EC
Morrissey
Joseph P
JP
Thakur
Neil
N
D000328:Adult; D003361:Cost Allocation; D005260:Female; D005102:Health Expenditures; D006291:Health Policy; D006778:Hospitals, Psychiatric / Q000191:economics / Q000706:statistics & numerical data; D006783:Hospitals, State / Q000191:economics / Q000706:statistics & numerical data; D006801:Humans; D016014:Linear Models; D008297:Male; D008329:Managed Care Programs; D008484:Medicaid; D008605:Mental Health Services / Q000191:economics* / Q000706:statistics & numerical data; D008875:Middle Aged; D017059:Models, Econometric; D011330:Prisons / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States; D014861:Washington