PROLOGUE: Evidence continues to accumulate that mental health/substance abuse (MH/SA) care can be covered at much lower rates under managed care than under indemnity insurance. One way to achieve these savings is by use of carve-outs, whereby MH/SA services are provided by a specialty provider. Use of such providers has grown over the past decade, so that more than 100 million Americans received services through them in 1996, by one estimate. As state Medicaid programs switch to managed care, several of them, including Tennessee through its TennCare program, have added a managed behavioral health carve-out for their constituents. TennCare's carve-out has drawn recent criticism for quality lapses on the part of its two behavioral health care contractors. By one recent estimate, legislation mandating parity, or comparable coverage for mental and physical health, had been passed at the federal level and introduced in more than thirty states as of mid-1997. As more states attempt to craft benefits for their employees and the beneficiaries of their public programs, data and models will be useful in guiding them through the complexities and suggesting pitfalls to avoid. In this paper Ching-to Albert Ma and Tom McGuire present the results of their study of the Commonwealth of Massachusetts, as it added a behavioral health carve-out for state employees. Ma is an associate professor of economics at Boston University. He received a doctoral degree in economics from the London School of Economics. McGuire is a professor of economics at Boston University. He holds a doctorate in economics from Yale. ABSTRACT: A carve-out of mental health and substance abuse services initiated in 1993 by the Group Insurance Commission (GIC) of the Commonwealth of Massachusetts resulted in changes in the costs of those services. Those changes were related to incentives in the contract between the GIC and its managed behavioral health vendor. Total and plan costs were reduced by 30–40 percent after adjusting for trends. Incentives to produce savings of this magnitude not only were a consequence of the payer/vendor contract but, we speculate, derive from the growth potential facing companies in the managed behavioral health care market.
Stored only when both papers are in the corpus — 170 citations exist upstream.
Imported from OpenAlex (CC0) — nothing here is generated.