Cost and Quality Trends Under Managed Care

Is There a Learning Curve in Behavioral Health Carve-Out Plans?

Published in: Journal of Health Economics, v. 18, no. 5, 1999, p. 593-604

Posted on RAND.org on December 31, 1998

by Roland Sturm

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This paper studies the performance of network plans over time using data from 52 managed behavioral health plans. Costs exhibit a learning curve with additional cost declines of 10-15% with every doubling of experience, which are independent from time trends and scale economies. Process-of-care measures show increased appropriateness of follow-up care and reduced 30-day rehospitalization, but the relationship to experience or time is not statistically significant. Possible causes of organizational learning could be faster referrals to network clinicians, increased acceptance of network providers by patients, selection of more efficient providers, improved care management procedures, or better monitoring techniques.

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