PROVIDING MENTAL HEALTH SERVICES IN A HEALTH MAINTENANCE ORGANIZATION

by I~[ARY RICHARDSON, MHA CHARLFS V. KEERAN, M.S.\V.

Currently some 8 million people receive their health care through Health Maintenance Organizations (HMOs) (Department of Health, Education and Welfare, 1980). Between 1970 and 1978, the number of HMOs increased by 450~'o. Membership in HMO plans increased 18~o between 1977 and 1978 alone (HMO Report, 1978). Continuing interest and support for an HMO model of care will have increasing impact on the organization and delivery of mental health services. A recent survey of HMOs in operations for one or more years reported that 90~o of the 68~o responding offered mental health services through basic or supplemental coverage plans (Levin and Glasser, 1980). Increasingly mental health planners, administrators, and providers are looking to insurance plans as a source of support to replace declining public funding.

Provision of mental health services vary within HMOs. Differing types of HMOs, benefit packages, staffing patterns, and complex interactions with medical care utilization affect the delivery of services. This paper will describe the development of Health Maintenance Organizations and the experience with mental health service delivery.

DEVELOPMENT OF HMOs

Health Maintenance Organizations grew from a concept of prepaid care, on a contractual basis, with a predetermined group of providers. The first prepaid group practice was the Farmers Union Cooperative Health Association, established in Elk City, Oklahoma in 1929 (Report to Congress, 1980). Shortly thereafter the Ross-Loos Medical Group of Los Angeles was established. In 1933, Dr. Sidney Garfield began to operate a prepaid group practice for Kaiser employees in Washington State. The Kaiser program was extend- ed to California and Oregon in 1942, and opened to the public in 1945. In 1947, Group Health Cooperative of Puget Sound, a consumers movement, was estab- lished. Health Insurance Program of Greater New York followed soon after.

The move toward prepaid care encountered con- siderable resistance from organized medicine; and laws were enacted in many states to prevent the corporate practice 9f medicine; prevent advertising of medical services; require medical society approval of prepaid practices; and require governing bodies of such practices to be constituted with total membership, or, at least,

a controlling membership of physicians. In 1943, a suit filed by the U.S. Department of Justice found the American Medical Association and the Medical Society of Washington, D.C. guilty of restraint of trade, opening the door a little more for the further develop- ment of prepaid health care.

Organized.medicine began to grudgingly accept prepaid health care and focus its support on the development of Independent Practice Associations (IPA). An Independent Practice Association, although a prepaid model, contracts with physicians on an individual basis to provide care to group subscribers in their own offices. They may continue to see patients in their own private practices as well. The first IPA was the San Joaquin Foundation for Medical Care in California, organized in 1954 under sponsorship of the County Medical Society. IPAs continue to be supported more strongly by organized medicine than are other forms of prepaid health care because of the fee-for-service and the solo-practitioner aspects (Report to Congress, 1980).

In 1973, Congress passed the Federal HMO Act (PL 93-222) defining an HMO as an organized system for financing and delivering comprehensive health care services to voluntarily enrolled members for a fixed, prepaid fee. Three different models were described and include: 1) the staff model, which delivers services at one or more sites through its own physicians who are employees of the HMO; 2) the group practice model, which contracts with an organized group of physicians to provide care in one or more locations; and 3) the IPA, previously described.

The HMO 'Act provided financing and overrode state laws restricting HMO development provided they met federal qualifications. By mid-1978 there were 203 plans in 37 states, serving some 7.5 million people. Of the 203 plans, 69 qualified under the standards set by HMO legislation, and 51 were developed with federal grant assistance. Plans are located in 37 states and Guam, with the largest concentration of subscribers (62.9~'o) in the Western states. California has 47.5~'o of all HMO enrollments. Amendments to the HMO Act in 1976 and 1978 relaxed some service require- ments, increased staffing and organizational options, provided for waivers and delays of open enrollment and increased funding limits and loan assistance. Dual- choice laws in many states make marketing HMO services easier than fee-for-service schemes. Prepaid

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care in Southern California, for instance, represents 25 to 30~'o of the insurance market.

INCLUSION OF MENTAL HEALTH SERVICES

Mental health services began to be included in HMO type plans through such pioneering efforts as the psychiatric insurance project jointly undertaken by Group Health Insurance, Inc. of New York City, the National Association for Mental Health, and the

American Psychiatric Association in 1962 (Spoerl, 1974), and the United Auto \Vorkers psychiatric benefit program in 1966 (Glasser, 1969). Since that time, many other systems of prepaid care have under- taken at least limited coverage of psychiatric benefits. The Federal HMO Act of 1973 requires qualified HMOs to provide short-term, outpatient, mental health evaluation and treatment to all members although most plans often limit their coverages to conditions which are amenable to improvement through the use of short-term therapies. Returning an individual to a functional state is often the primary objective. At least one plan, however, has reported experience for cover- age of chronic illness (Bennett 1979).

Many insurers are still struggling with the issue of insurability of mental health services. Utilization data is sketchy and tends to be unreliable. Definitions of mental illness are hazy and many early studies of mental health service utilization referred to "psychiatric dis- order" or other, equally broad terms rather than specific diagnosis. Because of the limitations of insurance coverage, diagnoses often are selected in response to available coverage rather than because they accurately reflected the problem being treated. Consequently, even studies using more appropriate diagnostic classifications may have large biases introduced. A review of utili- zation studies for enrolled populations report a range to over 200 visits annually per 1000 population, although most reported considerably lower rates (Williams, Richardson, 1979). Utilization is reported greatest in the 25-to-44 age group, with children and older people under-represented among users. Health plan data compiled by Reed (Reed et al., 1972), indicated utilization rates for females that ranged from 30 to 50% higher than those for males.

The survey of mental health services in HMOs, by Levin et al., indicated that 29~'o of those reporting provide mental health services exclusively through an internal component of the organization (Levin, 1979). A variety of contractual arrangements exists for the others. Thirty-six percent of HMOs provided service through external contractual arrangements with com- munity mental health practitioners and facilities and often with more than one facility or provider. Thirty- five percent provided services through a combination of HMO staff and contractual providers. Sixty-three percent permitted self referral while the remainder required referrals from primary care physicians only.

Arguments favoring the inclusion of mental health benefits in an HMO setting point out the potential for better integration of services with primary medical care, increased professional accountability, the emphasis on prevention, and the potential for cost containment. Additionally, the use of mental health services has been hypothesized to be associated with a reduction in the use of somatic health services. Many arguments for the inclusion of mental health services in prepaid plans are often prefaced on the notion that costs of mental health service coverage will be offset by reduced medical care utilization. However, the research in this area is equivocal (Anderson, et al., 1977; Avent, 1962; Diehr et al., 1980; Folette & Cummings, 1967; Goldberg, Krantz, & Lock, 1970; Goldensohn & Fink, 1979; Kogan, Thompson, Brown & Newman, 1975; McHugh, '1977).

Integrating mental health services into primary care is felt by many to be an important step in improving the access, availability and comprehensive delivery of care. HMOs, because of their dual role as insurer and provider are seen as an excellent model for integrating these services. The way in which staff and services are organized affect who is served, who provides the service, and what services are provided. Several programmatic arrangements have been cited as ways in which c~llaborative efforts between mental health and medical care providers can operate successfully. The mental health provider may carry out direct or indirect consultation only or provide consultation and a variety of direct treatment services. In some settings, a referral by a primary care provider may be required to receive mental health services; while in others, patients may be largely self referred.

The Community Health Center Plan of Greater New Haven (CHCP), a federally qualified HMO, reports a "team collaborative model which emphasizes the role of primary care providers in caring for the mental health needs of subscribers" (Patrick et al., 1978). Internists, pediatricians, physician assistants, and nurse practitioners carry major responsibility for all health care. They are supported by mental health clinicians who provide consultation to staff as well as evaluation and brief psychotherapy to patients referred by primary care providers. Under this arrangement primary care providers at CHCP began assuming a larger responsibility for treatment of emotional and mental difficulties. A similar model is reported by the Harvard Community Health Plan in Boston, Massa- chusetts (Budman, 1979).

Group Health Cooperative of Puget Sound operates a centralized mental health service staffed by psychia- trists, psychologists, social workers, and supporting staff. More than half of the patients requesting services are self referred. Patients first talk with nurses, who screen for emergent cases or schedule an intake appointment (Spoerl, 1974).

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The organizational type of HMO will largely determine the degree to which staff can collaborate. The staff or prepaid group models are "closed" systems in which most services are provided within the HMO setting. Providers are located together and opportunities to interact are considerably greater.

The Independent Practice Assodation, an open model, is more loosely organized. Providers are located at their individual practice sites and may or may not interact with one another. Little opportunity for consultation from mental health providers may exist and identification of psychiatric or emotional problems of patients is contingent upon the expertise of the primary care provider. Other benefits such as increased professional accountability, the emphasis on prevention and potential for cost containment vary depending on organizational structure.

Proponents of HMOs point to the cost containment incentives inherent in providing services for a pre- determined fee and the incentives for emphasizing pre:centive care and early intervention. Reduced costs in an HMO setting stem primarily from lower inpatient utilization rates than those found in other organization- al settings. Inpatient utilization from HMOs in 1978 averaged 408 days per 1000 members per year, com- pared to 729 days per 1000 Blue Cross enrollees per year. \Vithin differing HMO models, inpatient utili- zation rates were highest for IPAs (481 per 1000) as compared to 449 days per 1000 in group practice models and 405 days per 1000 in staff models (HMO report, 1978). However, Levin et al. found hospital days and admissions for all conditions lower for prepaid group practice and staff plans than IPAs while mental health conditions were higher for prepaid group models than IPAs. This may be an indication of higher utilization of mental health services in general in PGPs than in IPAs.

Prevention efforts, considered an important charac- teristic of HMOs, may depend largely on type of HMO as well. A prepaid system of care has built in incentives to keep people healthy and reduce utilization, hence costs, of services. Mental health prevention and early intervention efforts will be reinforced in an HMO setting where mental health and medical care providers work closely, such as the prepaid group practice or staff models. The IPA model, wherein the provider operates more independently, will be de- pendent upon the sophistication of provider to recognize and appropriately treat or refer patients with psychiatric or emotional disorders.

TRENDS

It does not appear that the growth of HMOs is slowing. The unique coalescence of financing and service delivery in an HMO setting provides strong incentives for greater attention to health promotion as

well as cost containment. The Federal government continues to support the HMO concept and member- ship in HMO type plans continues to grow. Because of expected continuing growth of HMOs, it is likely that mental health services will continue to be included more often and in different ways. Questions remain as to the manner in which mental health services will be included, how they will be organized, and who will provide them. \Ve currently have an extensive network of community based services, many of whom are find- ing their funding bases shrinking. Although many HMOs express concern as to costs of contracting out- side of the HMO for services, it may be only a matter of time before the community based mental health system will begin experimenting with HMO structures to provide mental health service and consultation.

For those HMOs that elect to provide mental health services "in house" it will be interesting to see who is designated t6 provide what types of services. \ r e have already seen HMO settings in which mental health- services were gradually shifted to primary care pro- viders with support and consultation from mental health specialists. In other settings, mental health providers hold tightly to their therapeutic territory and work on a referral basis with other primary care providers, or with people who refer themselves into mental health services for whatever reason. Given the economic incentives to substitute less expensive care and the fuzzy role definitions among many mental health providers, it would not be too surprising to see the therapeutic territory of the high-priced psychiatrist restricted to problems with a somatic component and the use of less expensive social workers and nurses expanded for other types of therapeutic intervention.

Depending on the type of organizational model of HMO which develops, services will be organized in differing ways. Currently the IPA is the model most rapidly increasing in numbers. Yet it is characterized by the individualistic practice pattern of those who participate. Under a staff or prepaid practice model, staffs are employed or on contract to the HMO and practice interdependently. Efforts at prevention, health promotion, and early intervention in psychiatric or emotional disorder ma), vary significantly depending on whether the organizational model is an IPA, staff, or PGP model.

Many of the problems already existing in the mental health services sector are unlikely to be resolved through the integration of services into an HMO structure. Mental health service providers struggle with meeting the needs of the poor, generally over-represent- ed by racial and ethnic minorities. Even with the public support of mental health services in community settings, barriers still remain for these groups in the form of language barriers, cultural ignorance on the part of the provider, and lack of social sensitivity. Yet publicly funded community mental health services

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address these issues better than many. If mental health services experience a shift from being primarily publicly funded in communities to funding through HMO structures, we may be taking a step backwards in our efforts to serve certain people. The HMO marketplace is typically the middle class, employed individuals and their families. Minorities and other ethnic groups tend to be under-represented in this population.

Chronic disease remains the number one health problem in this country and HMOs are not leaders in addressing chronic disease problems, nor are they notable in their services to the elderly, at greater risk for illness in general and chronic disease specifically. Increasingly HMOs are under pressure to incorporate services designed to address chronic disease problems. The inclusion of mental health services m HMO settings will necessitate looking at chronic mental illness as well. So far, very few have done so.

HMOs have been touted as both the savior as well as the usurper in health care service delivery. No one expects the HMO model to fall clearly at either end of this continuum. Because of the incentive structure, many of us hope the HMO concept will provide a stimulus to increase our health promotion activities and meet health maintenance needs for less cost. Where HMOs will ultimately end up on the continuum remains to be seen. How this will affect or incorporate the delivery of mental health services is a question of considerable interest to all of us. We are just now beginning to hear reports of the fit between mental health and medical care services in an HMO setting. ~owever, as HMOs continue to increase in number, and depending on the organizational type to gain most prominence, all we can do is speculate until the dust settles a little more.

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BIBLIOGRAPHY Bennett, M. J. and Wisneskl, M. J.: Continuous Psychotherapy

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Brown, P.: The Transfer of Care: U.S. Mental Health Policy Since World War II, INTERNATIONAL JOURNAL OF HEALTH SERVICES, Vol. 9, Ha. 4, 1979.

Budman, S. H., Feldman, J. and Bennett, M. J.: Adult Mental Health Services in a Health Maintenance, AMERICAN JOURNAL PSYCHIATRY, 136:4A, April, 1979.

Coleman, J. V. and Patrick, D. L.: Integrating Mental Health Services into Primary Medlcal Care, MEDICAL CARE, Vol. 14, No. 8, August, 1976.

Diehr, P.: Willlams, S. J.; Shortell, S. M.; Richardson, W. C. and Drucker, W. L.: The Relationship Between Utilization of Mental Health and Somatic Health Services Among Low Income Enrollees in Two Provider Plans, MEDICAL CARE, Vol. XVII, f la. 9, September, 1979.

Gibson, R. W.: Can Mental Health Be Included ;n the Health Maintenance Organlzalion? AM. JOURNAL PSYCHIATRY, 128:8, February, 1972.

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Glasser, M. A.: Prepayment for Psychiatrlc Illness, AMERICAN JOURNAL OF PSYCHIATRY, Vol. 121, 1965.

Goldensohn, S. S. and Fink, R.: Mental Health Services for Medicaid Enrollees in a Prepaid Group Practice Plan, AMERICAN JOURNAL PSYCHIATRY, Vol. 136, February, 1979.

Goldensohn, S. S. and Haar, E.: Transference and Counter- transference in a Third.Party Payment System (HMO), AMERICAN JOURNAL PSYCHIATRY, 131:3, March, 1974.

Kogan, W. S.; Thompson, D. J.; Brown, J. R. and Newman, H. F.: Impact of Integration of Mental Health Service and Comprehensive Medical Care, MEDICAL CARE, Vol. XIII, No. 11, November, 197S.

Levin, B. L. and Glasser, J. H.: A Survey of Mental Health Service Coverage Within Health Maintenance Organizations, AJPH, Vol. 69, No. 11, November, 1979.

Llpfzln, B.; Regler, D. A.; and Goldberg, I. D.: Utilization of Health and Mental Health Services in a Large Insured Population, AMERICAN JOURNAL PSYCHIATRY, 137:5, May, 1980.

Locke, B. Z.; Krant:, G.: Kramer, M.: Psychiatric Need and Demand in a Prepald Group Practice Program, AJPH, Vol. 56, Ha. 6, June, 1966.

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Nelson, S. H.: Standards Affecting Mental Health Care: A Revlew and Commentary, AMERICAN JOURN. PSYCHIATRY, 136:3, March, 1979.

Patrick, D. L.; Eagle, J. and Coleman, J. V.: Primary Care Treatment of Emotional Problems in an HMO, MEDICAL CARE, Vol. 16, No. I, January, 1978.

$poerl, O. H.: Treatment Patterns in Prepaid Psychiatric Care, AMERICAN JOURNAL PSYCHIATRY, Yah 131, Ha. I, January, 1974.

Venkatesan, M.; Morlarity, M. and Secher, C.: Health Main- tenance Organlzatlons: Product Life Cycle Approach, HEALTH CARE MANAGEMENT Review, Vol. SI2I , Spring, 1980, pp. 59-68.

Williams, S. J.; DIerhr, P.; Drucker, W. L. and Richardson, W C.: Mental Health Services: Utillzotlon by Low Income Enrollees in a Prepaid Group Practice Plan and in an Independent Practice Plan. MEDICAL CARE, 17:139-ISI, 1979.

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BIOGRAPHICAL SKETCHES

Richardson, Mary - - has an MHA Degree. She is currently Administrator ot the Clinical Training Unit o/ the Child Development and Mental Retardation Center and an Instructor in the Department o/ Health Services o/ the University o~ IVashington, Seattle, llZashington.

Keeran, Charles V., M.S.IV. - - has apt M.S.1P'. and an M.S. degree. He is the Associate Director /or Administration o/ the Neuropsychiatric Institute o/ the University o/ Call/., Los Angeles, Cali/.

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