Managing Healthcare Costs: Mental Health

Today’s Managing Health Care Costs Indicator is 19,900

The NY Times on Friday had a deeply disturbing article on a murder that stunned the mental health community here in Massachusetts. A long-term schizophrenic man, off his medicine and spiraling into incoherence, killed a young female counselor who was the sole worker at a group home in a Boston suburb.

His mother, who works at a Boston teaching hospital, was frantic with worry as her adult son, who had been arrested for assault multiple times, was becoming more psychotic. It was hard for her to get anyone’s attention.

The counselor was the first in her family to get a college degree, and had just decided to go to nursing school. Now she’s dead – and her family had trouble scraping together the resources for a burial. The schizophrenic will be imprisoned for the rest of his life – which ironically could be the best chance for him to get appropriate medical care.

Both families are thrown in to turmoil – many lives have been inexorably altered. How did we get here?

The Massachusetts Department of Mental Health is responsible for 19,900 people with severe and persistent mental illness. Massachusetts has closed 20,000 inpatient mental health beds over the last decades, and the state is debating closing a quarter of the remaining 626 long-term mental health beds. Hospitals that offer inpatient mental health services are struggling to survive – and patients who need inpatient mental health admissions can languish in Emergency Departments while psychiatrists scurry to find scarce placements.

It’s just as bad on the outpatient side. Very few child psychiatrists, in short supply, take any kind of private insurance, and waiting lists are long. Adult mental health services have diminished, and psychiatrists have largely transitioned to medication management, leaving cognitive therapy to nonphysicians. Health plans have historically done aggressive utilization review on mental health services, so that patients are discharged from outpatient or inpatient therapy more quickly – and it’s hard to get back into the system with a relapse. With major psychiatric disease, relapses are common.

It’s much better in Massachusetts than elsewhere in the country, where the budget crisis has hit harder, and where few politicians will advocate for the mentally ill. After Jared Loughner killed 6 and wounded 13 including Congressman Gabrielle Giffords in January, there were a series of articles about mental health cuts in Arizona and elsewhere in the country. But that attention didn’t last.

When we underfund mental health care, we bear the costs outside of the medical budget.

Families bear the majority of these costs; parents leave their jobs to watch their deeply ill children even as they reach adulthood, and spouses struggle to be case managers for their loved ones.

We send many of those with severe mental illness to jail – at a very high cost. In Massachusetts, a quarter of the prison population now requires mental health services, up by 2/3 since 1998.

Employers bear some cost, as well, with lost productivity from those with mental illness, as well as from family members who are struggling to themselves compensate for the failings of our system.

Managed behavioral health care has been wildly successful, though. While the cost of most medical services has burgeoned, the cost of professional services for those with mental illness has been pretty much flat. The cost of hospitalization has shrunken dramatically, and we’re severely underfunding outpatient mental health services.

Those with mental health needs have dramatically higher overall medical expenses – and are more frequently readmitted to the hospital.

The only place we’re spending more money on mental health services is in pharmaceuticals, which rose from 7% of total mental health spending (1986) to 27% of spending (2005). Mental health drugs represent a third of total Medicaid drug spending in many states. More irony – many of the newer antipsychotics that replaced inexpensive generic medications appear to be no better!

I often argue for decreased spending in many areas of health care. I think there is opportunity to lower the cost of pharmacotherapy in mental health, too. But it feels like we’ve gone too far in trying to lower professional and inpatient behavioral health costs. We’ve transferred these costs from society (largely Medicaid) and risk pools (employers) to prisons and to the individuals and families haunted by mental illness.

There must be a better way.

Today’s Managing Health Care Costs Indicator is $2 billion

The quickest, easiest way to cut medical claims expenses is to insure fewer people or to eliminate benefits. This is often not the way to maximize social utility, and sometimes these types of cuts actually increase societal costs.

There have been dramatic cuts in the mental health safety net in light of the recession and the dramatic decrease in state revenue. Most mental health care is underwritten by private insurance and states; there is little mental health care delivered by the federal government outside of the Veteran’s Administration. There’s been more focus on this problem in light of the tragic shooting of Representative Gabrielle Giffords and 18 others in Tucson by a mentally ill 22 year old man.

Mental health care costs have not climbed in parallel to the costs of the rest of the health care system – mental health is often “carved out” from traditional insurance, and the mental health management companies have been very effective at shortening hospital stays and reducing the overall cost of care. States have closed their inpatient mental health facilities across the country – deinstitutionalizing all but the most dreadfully incapacitated with mental illness.

Care in the community has unfortunately not kept pace with needs. It’s virtually impossible to find an available child psychiatrist, for instance, and emergency departments dread the arrival of someone who needs a psychiatric hospitalization. Such patients will spend many hours awaiting the frantic work of psychiatrists and social workers to find an available bed.

But it gets worse. The LA Times reports that states have cut $2 billion from mental health programs since 2009, and closed 4000 inpatient mental health beds. The state of Arizona cut 50% from its Department of Health, and reduced services for 14,000 with mental illness.

The New York Times points out that the cuts are across the country, and they are being proposed by politicians across the political spectrum.

· Washington State: $19 million midyear cuts, and loss of 46 inpatient mental health beds

· Kansas: Proposed $15.2 million cuts

· Mississippi: Funding 13% less than that required for level services, and closure of 200 beds

In some instances, mental health cuts lead to increased costs elsewhere in the system. The Arizona shootings might be an extreme example (and it’s possible that a more vibrant mental health system would not have prevented this tragedy). Those emergency department and medicine hospital beds occupied by people awaiting a mental health bed aren’t available for other patients, and most of us clinically have seen people with unmet mental health needs requiring additional medical care. It’s expensive to institutionalize the mentally ill; it’s often even more expensive to incarcerate them.

The real tragedy of underfunding mental health systems has nothing to do with whether or not costs are saved – it’s the impact on those with mental illnesses and their families. Caring for a mentally ill loved one is overwhelming for many loving families, and these cuts make caring for a mentally ill child or relative all the more difficult.