Examination of the effects of financial risk on the formal treatment costs for a Medicaid population with psychiatric disabilities.
OBJECTIVE
We examined the effects of differing financial risk arrangements for mental health, physical health, and pharmacy services on the overall costs of these services with particular attention to cost containment and cost shifting.


METHODS
Comprehensive service utilization information was obtained from a sample of 458 adults with severe mental illnesses during a 12-month period. Rate information was used to calculate costs for health, mental health and pharmacy. A 2-part model was employed to test for differences among financial risk conditions.


RESULTS
Total treatment costs, both those financed by Medicaid and those paid by other sources, were lower in plans that had a broader array of services for which they were at risk. Pharmacy costs were principally responsible for these differences.


CONCLUSIONS
Treatment costs for adults with severe mental illnesses can be contained by placing providers at financial risk. However, risk arrangements may also increase treatment costs borne by other payers including charity services and self-pay. Evaluating the impact of at-risk financing mechanisms from a public health perspective requires assessing cost shifting, particularly for pharmaceuticals.
Center for the Study of Issues in Public Mental Health, Nathan Kline Institute for Psychiatric Research, Orangeburg, New York 10962, USA. jones@nki.rfmh.org
Kristine
K
Jones
Huey Jen
HJ
Chen
Neil
N
Jordan
Roger A
RA
Boothroyd
Josefa
J
Ramoni-Perazzi
David L
DL
Shern
D000328:Adult; D000368:Aged; D003362:Cost-Benefit Analysis / Q000706:statistics & numerical data; D018588:Fee-for-Service Plans / Q000191:economics / Q000706:statistics & numerical data; D005260:Female; D017048:Health Care Costs / Q000706:statistics & numerical data*; D006801:Humans; D008297:Male; D008329:Managed Care Programs / Q000191:economics / Q000706:statistics & numerical data; D008484:Medicaid / Q000191:economics / Q000706:statistics & numerical data*; D001523:Mental Disorders / Q000188:drug therapy / Q000191:economics* / Q000453:epidemiology; D008605:Mental Health Services / Q000191:economics* / Q000706:statistics & numerical data; D008875:Middle Aged; D011619:Psychotropic Drugs / Q000191:economics / Q000627:therapeutic use; D020414:Risk Sharing, Financial / Q000706:statistics & numerical data*; D014481:United States / Q000453:epidemiology
D011619:Psychotropic Drugs