Costs and Utilization of Substance Abuse Care in a Privately Insured Population Under Managed Care

Published in: Psychiatric Services, v. 49, no. 12, Dec. 1998, p. 1573-1578

Posted on on January 01, 1998

by Michael Schoenbaum, Weiying Zhang, Roland Sturm

Cost and utilization patterns of substance abuse and mental health treatment under private, employer-sponsored, managed behavioral health care plans were examined. Data were from claims made in 1995 in 93 behavioral health care plans covering 617,133 members. Rates of use of mental health and substance abuse care were determined, as were payments by insurers and patients for the two types of care. Means were calculated per plan member and per user of either of these service types. Approximately .3 percent of plan members used any substance abuse services; 5.2 percent used mental health services. However, among substance abuse patients, average costs were more than twice as high as average costs for mental health patients. For substance abuse treatment, the annual cost per user was $2,188, compared with $979 for users of mental health care. Annual per-member costs were $6.51 for substance abuse treatment and $50.08 for mental health care. Higher costs for substance abuse treatment reflected greater rates of use of both inpatient and intensive outpatient treatment. Overall, substance abuse costs represented 13 percent of insurance payments for behavioral health care and perhaps .4 percent of the cost of health insurance overall. The report concludes that substance abuse coverage accounts for a small fraction of insurance payments for behavioral health coverage and a very small fraction of insurance payments for both physical and behavioral health care.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.