Mental Health Care Utilization in Prepaid and Fee-For-Service Plans Among Depressed Patients in the Medical Outcomes Study

by Roland Sturm, Catherine A. Jackson, Lisa S. Meredith, Winnie C. Yip, Willard G. Manning, William H. Rogers, Kenneth B. Wells

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The authors analyzed outpatient mental health care utilization in prepaid and fee-for-service plans for a panel of depressed outpatients in the longitudinal part of the Medical Outcomes Study. The average number of mental health visits over the course of the study was 35% lower in the prepaid sector, which is similar to previous findings regarding outpatient mental health care in enrolled populations. This reduced level of service use by depressed prepaid patients is not explained by observed differences in patient characteristics, including health status, between prepaid plans and fee-for-service patients. Most of the utilization differences between fee-for-service and prepaid plans were concentrated among patients of psychiatrists and to a smaller extent among patients of other mental health specialists. There were only minor differences among patients of general medical providers. Analyzing the effect of switches that patients make between payment systems over time, the authors found some evidence of adverse selection into fee-for-service plans based upon baseline utilization, but not based upon utilization at the end of the study. In particular, after adjusting for observed patient characteristics and health status, patients switching out of prepaid had higher baseline use than predicted, whereas patients switching out of fee-for-service had lower use than predicted. Patients of mental health specialists were more likely to switch out of prepaid than out of fee-for-service plans, whereas patients of general medical providers were more likely to switch out of fee-for-service than out of prepaid plans. Switching itself appears to be related to an immediate decline in utilization and was not followed by an increase or "catch-up" effect.

Originally published in: Health Sciences Research, v. 30, no. 2, June 1995, pp. 319-340.

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