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Shifting to Outpatient Care? Mental Health Care Use and Cost Under Private Insurance Douglas L. Leslie, Ph.D., and Robert Rosenheck, M.D. Objective: Concern over rising health care costs has put pressure on providers to reduce costs, purportedly by reducing inpatient care and increasing outpatient care. Method: Inpa- tient and outpatient claims were analyzed for adult users of mental health services (180,000/ year on average) from a national study group of 3.9 milion privately insured individuals per ‘year from 1993 to 1995. Costs and treatment days per patient were compared across diag- nostic groups and stratified by whether patients were hospitalized. Results: Ingatient men- {al health costs fell $2,507 (30.4%) over the period, driven primarily by decreases in hospital days per patient per year (19.9%), with smaller changes in the proportion of enrollees who received inpatient care (increase of 0.8%) and a decrease in per diem costs (9.1%). Outpa- tient mental health costs also dectined over the period, falling 13.6% for patients also using inpatient services and 14.6% for patients receiving only outpatient care. Patients whose pri- "mary diagnosis was mild to moderate depression saw the largest decrease in inpatient cost ‘per patient 42.8%); those diagnosed with schizophrenia experienced the smallest decrease (23.5%). For patients using outpatient services only, those diagnosed with substance abuse experienced the largest decrease in costs (23.5%); those diagnosed with schizophrenia ex- perienced the smallest decrease (8.6%). Conclusions: Substantial cost reductions for ‘mental health services are primarily a result of reductions in inpatient and outpatient treat- ‘ment days. Declines in inpatient service use were not accompanied by increases in outpa- tient service use, even for severely ill patients requiring hospitalization. Managed care has not caused a shift in the pattern of care but an overall reduction of care. (Am J Psychiatry 1999; 156:1250-1257) Conc one rp insesing health ear costs hav led to the development of various cost-contain. ment mechanisms, such as utilization review, case ‘management, exclusive contracting arrangements with selected providers, and risk sharing (1-3), These mech- anisms are often described as components of managed care, but chey are not limited to what are teaditionally considered managed cate plans (e.g., health mainte- hance organizations, preferred provider organiza- tions). A principle goal ofthese mechanisms is to re- Bed days Teor 04d v2a2 049199 0.0008 ‘Schizophrenia 2490 O75 ost 078-172 0.0001 Major depression 720049 1333 (050-228 0.0001 ‘Substance abuse 1848055, 320055 13 0.008 Mild to moderate depression 1073 oe Tei 073 20, 0.003, (Other mental health isorder 7063 082 322082 eer 0.001 Dollars per day 47516 124¢ 4318926181 001 ‘Schizophrenia dores = 101847498 Jat 4 040 Major depression 57344 12.48 50472. 1270-1200 0.0001 ‘Substance abuse 44383 «1418 = 045242988 0.03 Mid to moderate depression 41095 «1853370811880 08 0.13 (Other mental health csorder 4as73 1342403041342 84 0.03 Dollars per patient 3248284 5799 268-904 0.0001 ‘Schizophrenia 12428406 950s 412-285 0.0001 Major depression 10,186 255 877 = 270334 0.0001 ‘Substance abuse 7388 301 5560 303-284 0.0001 ‘Mil ta moderate depression 5a73 393 3133308 a8 2.0001 ‘Other mental health disorder 5588285 37m 285 335 0.0001, Days per enrollee 00825 00173640015 tk 0.0001, ‘Senzophrenia 0.0085 0.0000 0.0051 0.0008 21.7 0.0001 Major depression 0.0371 0.0032 «0.0278 0.0031 -255 0.0001 ‘Substance abuse 0.0223 0.0016 0.0196. oooTs 140 0.0001 Mid to moderate depression 0.0030 0.0004 0.0020» 0.0003 332 0.0001 ‘Other mental health disorder 001s 00013 0.0080 ons 212 0.0001, Dollars per enrcllee 4247 11.05, zor Bt 317 0.0001, Scnizophvenia 325 025 235 019-278 0.0001 Major depression 2188 2.10, 4050159357 0.0001 Substance abuse 04s 106 7e1 = 0s2 272 0.0001 Mid to moderate depression 158 O24 oes 07 aaa 0.0001, Other mental health disorder 601 oat 408 072-322 0.0001, Adjusted for age, gender, number of afferent dlagnoses, and whathor te patient had a dual diagnosis. Attest was used fo analyze inpallont bed daye, dllars per day, and dollars per patient az test was used to analyze days per enrollee and doliars per enrollee.