Alcoholism Treatment in Managed Private Sector Plans How Are Carve-Out Arrangements Affecting Costs and Utilization?

Published in: Recent Developments in Alcoholism, v. 15: Services Research in the Era of Managed Care / Edited by Galanter (New York: Kluwer Academic/Plenum Publishers, 2001), Chapter 12, p. 271-284

Posted on RAND.org on December 31, 2000

by Roland Sturm, Bradley D. Stein, Weiying Zhang, Peter Stan

Many U.S. employers and health plans have carved out their mental health and substance abuse benefits from a comprehensive health care plan. Organizations that administer these plans (managed behavioral health organizations) were virtually nonexistent 15 years ago. Today they are responsible for managing the behavioral health care benefits of the majority of Americans. Managed care has dramatically changed the delivery of substance abuse care, but virtually all debates about legislative mandates requiring substance abuse treatment to be covered at the same nominal level as medical care (parity) are based on data from before the advent of managed care. New information is needed not only on cost estimates but on utilization patterns, including continuity of care and disenrollment rates. This chapter focuses on alcohol treatment in 77 carved-out employer-sponsored managed care plans. It provides a profile of carve-out cost and utilization of alcohol-related services in recent years and also measures how various components of the total costs of alcohol abuse treatment services have changed over the past decade. Four major findings emerged from this study: (1) alcohol treatment is relatively rare among those with private insurance, but patients receiving this treatment have the highest per user behavioral health costs; (2) total alcohol-related costs and costs for intermediate alcohol-abuse treatment have remained constant; (3) alcohol-abuse treatment patients have not shown a greater tendency to disenroll than other members; and (4) alcohol detoxification follow-up figures are substantially better than those seen in nonprivate plans.

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