Disability management, employee health and fringe benefits, and long-term-disability claims for mental disorders: an empirical exploration

Mental disorders account for a large share of claims and benefit costs in both private and public long-term-disability (LTD) insurance programs. This is the first empirical study to explore factors that may explain variations in private-sector LTD claims incidence and cost across groups of employees. Employee fringe-benefit arrangements, including patterns of coverage for mental health treatment, are found to be important predictors of incidence rates. Award rates for public disability insurance coverage (SSDI) are also strongly related to claims incidence, suggesting that private LTD is an important pathway to SSDI benefits. Some employee disability-management strategies, such as front-line manager involvement and provision of alternative jobs for employees returning from disability leave, are predictive of lower claims rates and/or costs.

Mental health benefit limits and cost sharing under managed care: a national survey of employers

Mental health services experts suggest that managed care diminishes the need for arbitrary benefit limits and consumer cost-sharing. Data from 577 health plans were used to test the hypotheses that health maintenance organizations (HMOs) and carve-out plans are less likely to use benefit limits or service exclusions, have more generous limits, and have lower cost-sharing requirements than non-HMOs and non-carve-out plans. The results show that HMOs were more likely to use service exclusions and did not make less use of benefit limits. Carve-outs were less likely to use some coverage exclusions. Comparisons of the stringency of limits and cost-sharing provisions did not show consistent differences.

Parental use of alcohol and children's behavioural health: a household production analysis

This study uses the 1988 National Health Interview Survey (NHIS) data to examine the effects of both heavy and problem drinking as well as moderate or light parental alcohol use on children's behaviour problems. The analysis is formulated within Becker's household production function framework. The production of child behavioural health is estimated using items from the Behavior Problems Index, a battery of 32 questions about behaviour problems which is derived from the Child Behavior Checklist (CBCL), a widely-used parent report instrument. Measures of parents' alcohol consumption are constructed from the NHIS Alcohol Supplement that was administered to one randomly selected adult in each household in 1988. Ordinary least squares (OLS) and two-stage least squares (TSLS) results are presented. The results provide consistent evidence that parental alcohol use is an input with negative marginal product in the production of child behavioural health, regardless of which parent drinks. The magnitude of the effect is generally larger in the TSLS specification. There is also strong evidence of relationships between some family structure variables and child behavioural health and between parental physical health and child behavioural health.

Benefit flexibility, cost shifting and mandated mental health coverage

This paper presents a policy analysis of options for making a state's mandated mental health benefit more flexible while maintaining insurance premiums at a constant level. The analysis illustrates the difficult choices facing legislatures that attempt to balance improved coverage for mental health care with concerns about rising health care costs. A sophisticated simulation model is used to assess the costs of four alternative insurance benefit design options.

Evaluation of Hawaii's Healthy Start Program

Hawaii's Healthy Start Program (HSP) is designed to prevent child abuse and neglect and to promote child health and development in newborns of families at risk for poor child outcomes. The program operates statewide in Hawaii and has inspired national and international adaptations, including Healthy Families America. This article describes HSP, its ongoing evaluation study, and evaluation findings at the end of two of a planned three years of family program participation and follow-up. After two years of service provision to families, HSP was successful in linking families with pediatric medical care, improving maternal parenting efficacy, decreasing maternal parenting stress, promoting the use of nonviolent discipline, and decreasing injuries resulting from partner violence in the home. No overall positive program impact emerged after two years of service in terms of the adequacy of well-child health care; maternal life skills, mental health, social support, or substance use; child development; the child's home learning environment or parent-child interaction; pediatric health care use for illness or injury; or child maltreatment (according to maternal reports and child protective services reports). However, there were agency-specific positive program effects on several outcomes, including parent-child interaction, child development, maternal confidence in adult relationships, and partner violence. Significant differences were found in program implementation between the three administering agencies included in the evaluation. These differences had implications for family participation and involvement levels and, possibly, for outcomes achieved. The authors conclude that home visiting programs and evaluations should monitor program implementation for faithfulness to the program model, and should employ comparison groups to determine program impact.

The impact of managed care on psychiatry

It is estimated that 50% of all practicing psychiatrists have at least one contract with a managed care organization (AMA, 1994). As the field of psychiatry increasingly adopts the tools of managed care, it is important for researchers to clarify the extent to which managed care affects the practice of psychiatry, and how the changing practice climate in turn affects patients seeking mental health care. A diverse array of managed care techniques have been introduced into the profession of psychiatry in an effort to alter treatment patterns. One commonly used tool, utilization review, can alter treatment patterns by restricting access to treatment alternatives and providing incentives to practitioners to meet managed care goals. Other managed care tools are the determination of "medical necessity" and the use of triage and treatment guidelines among insured enrollees requesting services. These guidelines serve as selection criteria to help determine not only which members of the insured population receive treatment for mental health care, but also to determine the allocation of enrollees to staff members and to prescribe the starting point for the types of services received. Managed care psychiatrists may find changes not only in their client populations and treatment alternatives, but in many other aspects of their practice. Some psychiatrists working in managed care have become increasingly involved in treatment teams. Other psychiatrists contracting with MCOs are reserved for medication management, consultation, or administration in carved-out mental health departments or agencies. Little is known about the extent to which managed care restrictions affect psychiatrists' patient care roles, collaborative relationships with other mental health professionals, and the degree to which psychiatrists are involved in administration of managed mental health care benefits. The era of managed care has constrained the clinical decision making of psychiatrists whose magnitude and impact on job satisfaction and labor market responses are unknown. Surveys of general physicians in MCOs have provided a framework for understanding some of the difficulties and opportunities faced by managed care psychiatrists, but have failed to shed much light on many aspects of medical practice specific to the provision of mental health care within the boundaries of managed care. Future research in this area would help fill this gap, and assist in shaping the roles of psychiatrists in managed mental health care organizations.

Schooling, employment, and idleness in young adults with serious physical health conditions: effects of age, disability status, and parental education

PURPOSE

Education, employment, and "idleness" in young adults with ongoing physical health conditions were examined in relation to parents' education and respondent's age and co-existing disabilities.

METHODS

Telephone interviews were conducted with 421 individuals aged 20-24 years randomly drawn from public health programs in two midwestern states. In addition to a chronic health condition, 18% of the sample also had mental retardation, 21% also had a physical disability (but no retardation), and 11% also had a learning disability (but no mental retardation or physical disability). Youth were considered "idle" if they were not in school, not employed, not married, and had no children.

RESULTS

Thirty-seven percent of the sample were enrolled in an educational program, and 48% were employed either part-time or full-time. Seventeen percent were both in school and employed, 50% were in school or employed, and 33% were neither in school nor working. Overall, 23% of the sample were idle. Youth with mental retardation were two to three times more likely to be in school compared to youth with a chronic physical condition alone. Youth with mental retardation and physical disabilities were less likely to be employed and more likely to be idle compared to youth with only a chronic condition. Parental education affected rates of schooling and employment. Compared to a general population sample of youth in the same states, youth with ongoing health problems were at higher risk for idleness.

CONCLUSIONS

Youth with chronic health conditions and either mental retardation or physical disabilities are at higher risk for idleness compared to youth with a chronic condition alone or to youth in general.

Updated estimates of earnings benefits from reduced exposure of children to environmental lead

The recent and important study by Schwartz found that almost three-fourths of the benefits of reduced lead exposure in children are in the form of earnings gains (earnings losses avoided). New data on recent trends in returns to education and cognitive skills in the labor market suggest a need to revise this estimate upward. Based on an analysis of data from the National Longitudinal Survey of Youth, the present study estimates that an upward revision of at least 50% (or $2.5 billion per annual birth cohort) is indicated. The study also finds evidence that percentage earnings gains are considerably larger for females than for males.

Nonprofit organizations in the health sector

Government appears to both promote and mistrust nonprofit organizations in the health sector. Tax exemptions, subsidies, and preferential treatment in contracts support these organizations. Legislation that links the supply of charity care to tax exemptions demonstrates mistrust. In this paper, the authors argue that information asymmetries lie at the heart of the current discomfort with tax policy toward nonprofit health-care providers. The authors examine current policy in terms of the rationale for the exemption of nonprofit health-care organizations from taxes as well as the ability of government to monitor performance of these organizations.

The supply of charity services by nonprofit hospitals: motives and market structure

This article studies provision of charity care by private, nonprofit hospitals. We demonstrate that in the absence of large positive income effects on charity care supply, convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals. Extending our model to include impure altruism (rivalry) provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant. Empirical analysis of data for hospitals in Maryland provides evidence of rivalry on the supply of charity care.

Hospital ownership and the care of uninsured and Medicaid patients: findings from the National Hospital Discharge Survey 1979-1984

From 1980 to 1984 Americans with no health insurance increased from 13.9% to 17.1% of the non-elderly population. Non-elderly persons covered by Medicaid declined from 6.2% to 5.6%. Previous studies of the share of the burden of uncompensated care borne by various provider groups present opposing findings. The National Hospital Discharge survey data presented here demonstrate that for-profit hospitals serve significantly lower percentages of uninsured discharges than secular or church-affiliated non-profit hospitals and public hospitals. The same pattern of differentials is observed with respect to Medicaid. On the whole the results of the survey tend to support the argument that private non-profit hospitals do indeed render greater public services in treating indigent patients than do for-profit hospitals. It must also be emphasized, however, that the results show all private hospitals falling somewhat short of the standard set by public hospitals in treating indigents. Thus, the continued shrinkage of the public hospital sector has serious policy implications.

Utilization and case-mix impacts of per case payment in Maryland

Maryland has simultaneously operated per case and per service hospital payment systems since 1976 with varying levels of stringency in setting per case rates. Regression analyses of this experience are used to compare the impacts of these systems on admissions, length of stay, and case-mix costliness from July 1, 1976 to June 30, 1981. Our results indicate a positive effect on admissions and negative effects on case mix and length of stay for the per case payment approach relative to the per service approach. More stringent levels of per case payment are associated with stronger utilization responses.

Economic rents derived from hospital privileges in the market for podiatric services

This study examines the relative impacts of human capital and market conditions on the economic rents associated with hospital privileges in the market for footcare. An empirical model of hospital privileges for podiatrists is formulated based on the Pauly-Redisch model of hospital behavior. The privilege model is then incorporated into a model of podiatrists' earnings via a selection adjustment as proposed by Heckman and Lee. The results indicate the persistance of economic rents even after controlling for unobserved 'quality' factors.

Cost-effectiveness of educational interventions to improve patient outcomes in blood pressure control

To examine the relative cost-effectiveness of single versus multiple patient education strategies to reduce hypertension, we assigned patients to seven intervention groups and to a usual-care control group using a randomized factorial design. We compared cost-effectiveness measures for single, double, and triple combinations of (a) a clinic exit interview with patients to clarify their medical regimens, (b) an educational meeting with a member of the patient's family to aid in management at home, and (c) a series of small group sessions to help patients overcome personal barriers to management. We observed consistent results for six different effectiveness measures under a variety of decision-making rules. Our results suggest that in the absence of targeting of multiple interventions to systematically selected high-risk patients, multiple intervention combinations are not more cost-effective than single interventions.

Hospital payment effects on acute inpatient care for mental disorders

We examined the extent to which inpatient care for patients with mental disorders in general, acute care hospitals responds differently to two types of prospective hospital payment. In Maryland, hospitals have been regulated since 1976 under two forms of payment based on per-service and per-case definitions of hospital output. The study utilizes a 20% sample of 58,000 mental-disorder discharges from 21 per-case- and 24 per-service-reimbursed hospitals in Maryland between fiscal years 1977 and 1980. The effects of payment method on length of stay are examined through the application of multivariate regression models. The empirical results are generally consistent with the notion that the per-case payment method provides some incentives for hospitals to reduce the length of stay. The regulatory effects, however, vary with patient characteristics, particularly by diagnosis.

Cost implications of hospital unionization: a behavioral analysis

The growth of unionization among hospital workers was sharply accelerated by the 1974 amendments to the National Labor Relations Act covering voluntary hospital workers. With continuing inflationary pressures in the hospital sector, the cost implications of the recent and projected growth of hospital unions is of some concern to policymakers. This article presents estimates of union cost impacts based on data from hospitals in Maryland, Massachusetts, New York, and Pennsylvania. Cross-sectional regressions with data for 1975 yield positive union impacts of 3.3 percent on total costs, 4.1-5.9 percent on cost per case, and 6.1 percent on cost per day. Reestimation of the model with data on changes over the 1971-1975 period yields similar results. We also find that the cost impact of unionization varies with the pattern of coverage (being lower for service employees and RNs) and with the extent of cost-based reimbursement. This suggests that future cost impacts of union growth may be moderated as prospective payment systems for hospitals become more widespread.

The effect of hospital payment methods on the pattern and cost of mental health care

The authors report on a study of the impact of a prospective payment method on hospital charges and mix of services provided to a group of Medicare patients treated for mental disorders in general acute care hospitals in Maryland. The study focused on per case reimbursement, under which hospitals are guaranteed a level of total revenue based on the number and case mix of discharges, and examined its effect on hospital charges during an index admission and on hospital and non-hospital charges over a three-month period following the index admission. The results suggest that per case reimbursement provides incentives to reduce the cost of one hospital stay, but this cost reduction is possibly offset by a higher readmission rate or by higher readmission charges. The authors conclude that the impact of the per case payment method on the total cost of mental health care over a specific period of time is insignificant, but that the payment method may influence the pattern of care.

Episode-based efficiency comparisons for physicians and nurse practitioners

Most previous studies comparing the efficiency of new health practitioners with that of physicians have used the visit as the basic unit of output. Several researchers have noted, though, that the episode is a conceptually superior output unit in several respects, although it is more complex to deal with methodologically. This study demonstrates the application of episode-based methods for comparing the efficiency of physicians with that of nurse practitioners. Data are drawn from the information system of the Columbia Medical Plan and from observations of provider time inputs. The analysis is confined to care episodes for otitis media and sore throat in the Department of Pediatrics. Results indicate that per episode costs with nurse practitioners as the initial provider are approximately 20 per cent below the costs of episodes in which physicians are the initial provider. Examination of a limited amount of data on patient-reported measures of effectiveness indicates that while nurse practitioners' care is less costly, it is not less effective. These findings are particularly interesting in light of recent doubts expressed about cost-savings from using new health practitioners, and particularly nurse practitioners, in group practice settings.

Changing patterns of graduate medical education

Postgraduate medical education underwent substantial change during the 1970s: medical-school classes grew, the internship year was eliminated, and the numbers of M.D.s entering primary-care specialties increased. The purpose of this study is to develop a planning model of graduate medical education that can project the impact of these and other changes on the numbers and specialty mix of physicians completing training. The model is applied to an analysis of trends in graduate medical education and to the probable consequences of policy recommendations made by the Graduate Medical Education National Advisory Committee (GMENAC). The results show that the trend toward increasing percentages of M.D.s entering primary-care specialties from 1970 to 1976 changes to no increase from 1976 to 1980. Thus, the GMENAC policy recommendation to increase primary care further is not likely to occur spontaneously in the near future.

Preventive and episodic health care of inner-city children

Children in low-income, inner-city households who used different sources of ambulatory care were analyzed with regard to their experiences in securing preventive and episodic illness care. This analysis is derived from a larger study that investigated the utilization of health care systems by groups within an inner-city community; it focused on the Outpatient Department of a large teaching hospital and on the impact of a new Health Maintenance Organization (HMO). Data were obtained through household interviews of three sample populations: enrollees in an HMO, residents of a public housing project, and persons from the general community. When preventive health care was examined, our findings showed that, while the majority of children of school age were immunized, only about half of the children under age 6 were. Among children aged 3 through 5, those attending day care centers were more likely to be immunized than those not in such programs. There were indications that children using the HMO were more frequently receiving preventive services, particularly general physical examinations. There was no relationship between the usual source of care, or day care participation, and whether a child received care for an episode of illness. There were differences by age and usual source of care in seeking care for earaches and in receiving regular care for asthma. The patterns of health care utilization found in this study promote interest in the influence of the source of ambulatory care for children in other socioeconomic groups.

Episodes of illness and access to care in the inner city: a comparison of HMO and non-HMO populations

Using data from a 1974 household survey, accessibility to ambulatory care is compared for residents of an inner-city area (East Baltimore) whose usual source of care is an HMO (the East Baltimore Medical Plan) and residents of the same area with other usual sources of care. Accessibility is measured by the probability of receiving care for an episode of illness. Results from multivariate linear and probit regressions indicate that children using the HMO are more likely to receive care than are children with other usual care sources, but no significant differences in the probability of receiving care are found among adults. Evidence of a substitution of telephone care for in-person care is also found among persons using the HMO. Data from a 1971 household survey of the same area suggest that selectivity is not an important confounding factor in the analysis.

Economic class and differential access to care: comparisons among health care systems

This paper presents a new technique for describing inequality of access to medical care. Access is described by the empirical relationship between need and the probability of entering the health care system for treatment. The need-entry probability relationship for one population group is compared with that for another population group to determine the extent of access differentials (differences in entry probabilities) at varying levels of need. As an illustrative application, the technique is employed to describe access differentials by economic class in six different geographic areas located in five different countries (Canada, England, Finland, Poland, United States) with differently structured health care systems. Although the findings for adults varied considerably from area to area, the access differentials among children were surprisingly consistent and unrelated to health care system structure. In particular, it appears that higher family income is associated with greater access to medical care among children at all levels of need. The paper concludes with suggestions for further applications of the proposed technique to problems of monitoring and evaluating the effectiveness of policies aimed at reducing the extent of access inequality.