ESTIMATING the COST of PREVENTIVE SERVICES
in Mental Health and Substance Abuse Under Managed Care
Model Three: Targeted Short-Term Mental Health Therapy
This cost model was designed on the basis of interventions described in research by Finney, Riley, and Cataldo (1991) and Goldberg, Allen, Kessler, Carey, Locke, and Cook (1981) and reviewed by Dorfman (2000) in references respectively numbered 15 and 41. This model was designed, as were the others, to estimate PMPM costs for a managed care plan with 100,000 members that implements a brief psychotherapy benefit (6 to 16 visits) for its child and adolescent members (birth to age 17) and for its adult members (ages 18-65).
Finney et al. (1991) focused on children ages 1 to 15 treated with brief therapy in a pediatric clinic of a staff-based HMO. Goldberg et al. (1981) did their research based on the claims paid for psychotherapy provided to adult members of the Federal Employees Health Benefit Plan. This cost model was designed to accommodate both children and adults, and the cost results of each subgroup were combined, assuming that an MCO would use this intervention with all age groups. Both age categories had a similar cost structure but different input assumptions (i.e., values assigned to various stochastic distributions).
Results
PMPM Cost
The median PMPM cost for the Least Expensive Scenario was $1.00. The median PMPM cost for the Most Expensive Scenario was $1.96, resulting in a midpoint value of $1.48.
Design and Input Values Used in the Model
Membership and Treated Prevalence
This model assumed an MCO membership of 100,000. On the basis of 1990 census data, the model assumed that 32 percent of the population would be from birth to age 18, and 68 percent would be ages 19 to 65.
The model assumed that any MCO would use "medical necessity" criteria when evaluating the need for brief psychotherapy, as was used in the study by Goldberg et al. (1981). Therefore, the model assumed that indicators of treated prevalence would best estimate the number of persons who would receive brief therapy.
For the child subgroup, the model assumed a prevalence rate of 9 to 12 percent based on median estimates from a meta-analysis of the epidemiological research reported by Friedman, Katz-Leavy, Manderscheid, and Sondheimer (1996). A study on treated prevalence of mental health problems among children and adolescents indicated that 23 percent of privately insured children with any mental health disorder (serious emotional disturbance [SED] or non-SED) received some outpatient therapy (Burns, 1991).
For the adult subgroup, the model assumed outpatient treated prevalence rates of 14, 14.5, and 15 percent based on epidemiological research reported by Bourdon, Rae, Narrow, Manderscheid, and Regier (1994) on an average treated prevalence rate for adults. That rate of treated prevalence is further reduced by 44 percent, a rate reported by Goldberg et al. (1981) of index patients with psychiatric diagnoses who received zero visits.
Volume of Service, Type of Provider, and Copayments
For the child subgroup, the model assumed an average of 2.75 visits per child. Finney et al. (1991) reported a range of 1 to 6 visits and an average of 2.4 visits, but no measure of variability around this mean. The model assumed that each therapy session per child participant lasted 60 minutes, which includes the 50-minute sessions reported by Finney et al. (1991) and Goldberg et al. (1981) and 10 minutes for clinical record keeping. Based on the data reported by Goldberg et al. (1981), the model assumed eight visits per adult participant, each one requiring 50 minutes of therapist time and 10 minutes for record keeping.
The model assumed that the therapy was provided by a licensed mental health professional (psychologist or psychiatric social worker) with an annual salary of $50,000, a fringe-benefit cost of 29 percent of salary, and a productivity rate of 70 percent, yielding an "effective cost per hour" of $44.30.
Because most insurance plans, including HMOs and behavioral health care carve-outs, have a mental health copayment requirement, the model assumed a copayment of $20, $15, $10, and $5, respectively, for the four scenarios from Least Expensive to Most Expensive. In other words, the copayment effectively reduces the "effective cost per hour" by $20 to $24.30 for the Least Expensive Scenario and by $5 to $39.30 for the Most Expensive Scenario. The model assumed that 100 percent of all copayments were collected.
Other Expenses
Finney et al. (1991) reported that "behavioral treatment guidelines" (e.g., how to respond to bed wetting, the use of "timeouts") were given to the parents of the children in treatment. The model assumed a cost of $2 to $5 in $1 increments for the cost of reproduction and distribution of these guidelines.
Finney et al. (1991) also reported that "most families also received a number of planned telephone contacts after therapy was begun to ensure adequate implementation of recommended therapeutic techniques and to troubleshoot problems" (p. 452). Therefore, the model assumed that 100 percent of the families would each receive two phone calls. The model assumed that the phone calls took 5 minutes and were made by the therapist.
The model assumed no supply or phone call expenses for the adults.
The total cost was also increased by applying a G&A overhead plus profit rate of 10, 11, 12, and 13 percent to the direct services cost in each of the four respective scenarios from Least Expensive to Most Expensive.
Discussion
Unlike interventions that use traditionally trained medical staff, this intervention generally requires professionals trained in brief psychotherapy-primarily psychologists, but also some psychiatrists and psychiatric social workers. Therefore, some staff-model HMOs or independent practice associations (IPAs) would have to review their staffing patterns to determine whether such personnel were available and trained in brief psychotherapy, especially with children and adolescents. An alternative to hiring such personnel would be to subcontract with a qualified professional to carry out the intervention on a fee-for-service or case-rate basis.
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