Can We Learn From History Mental Health in Health Care Reform

Economic Grand Rounds



Can We Learn From History? Mental

Health in Health Care Reform, Revisited

Chris Koyanagi







Health reform is again on the na- health care, the plan proposed a limit- Actions since 1993

tional agenda. Serious debate ed benefit for immediate implemen- In the years since the Clinton plan

about how mental health might fit tation, which shifted to parity in 2001. there have been many developments

into national health policy has not In its final gasp, the legislation includ- in both the health arena and mental

occurred since 1993. The focus of ed a provision for immediate adoption health policy. For example, some in-

the Clinton reformers was on ben- of parity coverage of mental health surance reforms debated in 1993 were

efits, integration with the general care with medical-surgical care. The later enacted in the Health Insurance

health system, and a new role for provision emerged late in the process Portability and Accountability Act.

the public sector. A number of is- in a bipartisan Senate compromise bill Major reviews of mental health

sues remain relevant today, such as and represented the first time federal treatment and policy occurred at the

uncoordinated public and private legislation dealt with parity. federal level during these years. In

services, cost-shifting, and poor As we face another debate on re- 1999 the first-ever report on mental

quality care for people with serious form, it is instructive to consider the health by the Surgeon General was is-

mental illness. This column consid- current relevance of mental health sued, detailing scientific evidence

ers the barriers to full inclusion of policy issues that confronted the Clin- showing that mental illnesses can be

mental health in health care re- ton reformers. Are those issues the accurately diagnosed and effectively

form and proposed solutions that same today, and are the solutions pro- treated (2). The report helped to dis-

were identified in 1993 and de- posed in 1993 at all relevant? What pel myths that mental health services

scribes how they can inform policy has changed, and how should we ap- are not valuable and summarized re-

decisions in 2009. (Psychiatric Ser- proach the new debate? How can we search showing that mental health

vices 60:17–20, 2009) ensure that reforms to the overall treatments had an evidence base as

health system include mental health solid as those of many medical-surgical



T he nation appears poised, once

again, to have a serious discussion

about reforming the health care sys-

and advance the field?



Problems identified in 1993

services.

Also in 1999 a White House Confer-

ence on Mental Health was convened

tem. Driving this debate is the plight of Clinton reformers identified several to develop federal policies, one of

46 million uninsured Americans and problems in the system that were crit- which clarified Medicaid coverage of

continued unsustainable cost increas- ical to address in order to improve certain evidence-based practices. This

es. Questions about the quality of mental health service delivery (1). policy encouraged states to continue

health care, and therefore the value of The system was a confusing mix of funding community mental health

health spending, are also at issue. uncoordinated public and private services under Medicaid—today the

The last serious national debate on services that resulted in cost-shifting largest source of funding for public-

health reform was in 1993 when the and private-sector abdication of re- sector community mental health

Clinton Administration proposed a sponsibility for people with severe spending and the single largest payer

national health plan. It sought access mental illness. Privately insured indi- for behavioral health care (3,4). Such

for all low-income families, attempted viduals had inadequate protection policies have the result of integrating

to contain costs, encouraged coordi- against catastrophic costs, and not- mental health funding, if not services,

nated care, and proposed reforms to withstanding some excess capacity, with general health care.

the insurance market. For mental many faced access problems. The In 2003 the President’s New Free-

two-class system (public and private) dom Commission Report on Mental

did not serve people with severe Health was released (5). It focused pri-

Ms. Koyanagi is policy director at the

mental illness well, and there was an marily on reforms to make the public

Judge David L. Bazelon Center for Men-

overemphasis on institutional care. mental health system more effective,

tal Health Law, 1101 15th St., N.W., Suite

1212, Washington, DC 20005 (e-mail: Services were financed through a responsive to consumers, and geared

thompson@bazelon.org). Steven S. Sharf- complex mix of federal, state, local, to recovery. The first recommendation

stein, M.D., Haiden A. Huskamp, Ph.D., and private funding. of the commission resurrected a basic

and Alison Evans Cuellar, Ph.D., are edi- Most, if not all, of these issues are principle of Clinton’s reforms, to inte-

tors of this column. relevant today. grate mental health and health care,

PSYCHIATRIC SERVICES ' ps.psychiatryonline.org ' January 2009 Vol. 60 No. 1 17

viewing mental health as essential to new context, recognizing gains made tion actuaries and the Congressional

overall health. in the past 15 years and addressing Budget Office were reluctant to as-

Comparing recommendations from new challenges. sume that managed care could, in fact,

the President’s Commission with pro- control costs. There was also concern

posals of the Clinton reformers em- Parity benefits that the field was not ready to imple-

phasizes both how much and how little The first issue in reform for mental ment managed care effectively and

has changed. Although there has been health advocates is the benefit pack- that health plans would manage men-

significant progress in some areas, im- age. Arbitrary limits on mental health tal health benefits by simply denying

portant unresolved issues remain. On services have been typical. As a result, needed care (2). Considerable experi-

the positive side is enactment of a fed- policy advocates have been consumed ence with behavioral health managed

eral parity law, significant research to with this issue. Although parity is one care since 1993 has shown that it can

identify evidence-based practices, re- area where there has been significant be relatively successful in holding

orientation of the public system to- progress since 1993, benefit issues down costs while providing appropri-

ward a recovery model, and major re- may still need some attention. ate care for acute mental illness. On

ductions in institutional services. In In 1996 a limited law requiring par- the other hand, studies show that peo-

addition, improved data systems have ity in parts of the mental health bene- ple with serious mental disorders do

shown the cost-effectiveness of mental fit was enacted. In 2001 health plans in not do well in health maintenance or-

health care. the Federal Employees Health Bene- ganizations and similar plans (7). As a

On the other hand, the current sys- fits Program (FEHBP) were required result, both employers and public-sec-

tem remains a confusing mix of public to offer parity coverage for mental tor agencies often rely on carve-outs or

and private services, with health plans health care. Data from FEHBP (and fee-for-service arrangements for this

avoiding many of the costs of caring for from large employer plans) have population.

people with more serious disorders. shown parity to be affordable and of Proposals announced by President-

This two-class system is not serving considerable benefit to individuals by Elect Obama and leaders in Congress

people with severe mental disorders reducing out-of-pocket costs. These would expand access to private insur-

any better than it did in 1993. During data helped propel Congress to pass a ance, retaining the employer-based

the 1990s federal and state spending law in 2008 for full parity for coverage system, and would create a new public

for mental health services fell in rela- of mental and substance use disorders program for those who remain unin-

tion to inflation and all spending on in large group health plans. sured. The 2008 parity law will mean

behavioral health fell relative to Although this law is a strong basis that these plans will have a parity ben-

spending on general health care. As a for coverage if health care access is ex- efit (unless a plan eliminates behav-

result, inadequate public systems have panded in 2009, it is by no means com- ioral health coverage entirely), al-

become less adequate and access plete. Plans and purchasers can avoid though individuals in small group

problems remain. Moreover, financing its requirements by having no cover- plans or with individual coverage will

is still “a complex, uncoordinated mix age for mental health or substance not. This is likely to continue (or even

of federal, state, local and private abuse services, and small group and in- increase) the tendency of health plans

funding” (1). dividual plans are not affected at all. to use managed care to control utiliza-

The question therefore arises, are tion and cost of mental health services.

Objectives for reform any of the barriers to parity that It may therefore be just as important

These continuing problems demon- plagued the Clinton reformers still rel- in 2009 as in 1993 to guard against ad-

strate that several major objectives evant today? Drafters of the Clinton verse selection and denial of necessary

outlined by Clinton reformers could plan were concerned with the cost of a care. In 1993 a proposed solution was

be relevant today. [A working paper parity benefit and they wanted to en- risk-adjusted premiums along with a

from the Clinton reform effort outlin- sure that there were policies to pre- mixed capitation approach. In addi-

ing concerns, goals, and recommenda- vent adverse selection (1). The first tion, it was felt there should be moni-

tions for reform is available as an on- problem was moral hazard—the ten- toring to constrain the propensity of

line supplement to this column at dency of people to use outpatient health plans to undertreat. With mixed

ps.psychiatryonline.org.] They include mental health services more when capitation, part of the premium (say

improving access by ensuring parity constraints in the benefit package or 60%) would be paid prospectively. The

coverage of mental health care and high cost-sharing requirements are re- remainder would be paid retrospec-

medical-surgical care, integrating de- moved (6). Health plans might try to tively on the basis of actual cost (1,2).

livery systems and emphasizing coor- gain advantage by “cherrypicking” or

dination and systems of organized other underwriting practices that seri- Comprehensive benefits

care, integrating financing of mental ously disadvantage individuals with The mental health benefit in Clinton’s

health care and medical-surgical care, mental illness. Expanding coverage to plan included a broad range of servic-

increasing the focus on early interven- millions of currently uninsured people es: screening, crisis services, a range of

tion, and minimizing the two-class, in 2009 may also have this result. community services, inpatient and res-

public-private system dysfunctions. To ensure affordability, Clinton re- idential placements, and case manage-

The 2009 debate will provide an op- formers looked to managed care to ment. There was also a focus on early

portunity to revisit these concerns in a control costs. But in 1993 administra- intervention and prevention. Benefits

18 PSYCHIATRIC SERVICES ' ps.psychiatryonline.org ' January 2009 Vol. 60 No. 1

were thus more expansive than in the Integration of care target populations and might be pro-

typical private health plan and gave According to the Clinton Administra- moted through health reform and

providers greater flexibility in meeting tion reformers (1), “reform of mental through expansions of the public

the needs of people with severe men- health and substance abuse coverage health system. Addressing the mental

tal illness. will remain incomplete until there is health needs of individuals with chron-

Expanding mental health coverage full integration of mental health and ic physical illnesses can improve out-

in private plans had a number of ad- substance abuse services within gener- comes and should be discussed as part

vantages and potentially addressed al medical care, giving all Americans, of the wellness agenda.

several system problems that had been regardless of the nature of their illness,

identified. Both acute care and reha- insurance coverage for appropriate Public-sector issues

bilitation services could be provided in services.” The Clinton reforms includ- Under Clinton’s plan for covering both

a coordinated way. There would be ed recommendations aimed specifical- acute and rehabilitative services, fund-

flexibility to match patients’ needs to ly at greater integration (1). Public- ing was problematic. Paying for this

treatment, thereby encouraging cost- sector providers were to be incorpo- expanded array of services would re-

effective use of alternatives to hospi- rated into the mainstream health care quire capturing public mental health

talization and providing catastrophic system and into mainstream funding. funds. However, although Clinton re-

protections to all. Thus, except for forensic patients and formers considered this essential to

Private-sector plans have made few those in custodial care, all patients fully integrate mental health services,

moves since 1993 toward covering the would receive mental health services they struggled with how to do it (1).

intensive community rehabilitative ser- through the same system as general Such a strategy is not likely to be on

vices that are still generally provided health care. It would be paid for the table in 2009. However, several

only through the public sector. Busi- through insurance and delivered important concepts from 1993 could

ness leaders have recognized the need, through a single delivery system. be relevant in 2009, including shared

but their recommendations are quite In 2009 it will be important for private-public responsibility for indi-

modest. The National Business Group mental health advocates to press even viduals with severe mental disorders

on Health recommends that employ- more vigorously for integration. To and federal funding to facilitate link-

ers purchase coverage for evidence- begin with, recommendations made ages between health plans, public

based treatment for people with seri- in 1993 could be implemented. They providers, and other social welfare

ous mental illness but limits its sugges- include ensuring that parity coverage systems.

tions to assertive community treat- of mental health services is part of a

ment, case management, therapeutic national plan for the uninsured; in- Mental health in health

nursery services, and therapeutic corporating behavioral health screen- reform, 2009 version

group homes (8). ing into general health screens, par- In 2009 health care reform will likely

In 2009 it will be difficult to include ticularly for pediatric patients; per- build on the existing private insurance

a full range of mental health services in mitting public-sector providers to bill system and focus on expanding access,

benefit packages designed for the private plans to the greatest extent controlling costs, and improving the

uninsured. However, some steps might feasible; and providing support from value of health care purchases by im-

be taken. Strategies to facilitate im- the federal government for integra- proving quality. The changes that have

proved identification of mental illness- tion policies by underwriting work- occurred since 1993 will enable mental

es and early intervention services are force development and providing health reformers to participate more

possible. These might include expan- start-up funds for new services and actively than in the past in discussions

sion of employee assistance programs, organized systems of care. about these issues. Acceptance of pari-

greater emphasis on behavioral health In addition, new policy concepts are ty by employers and the insurance in-

in the public health system, and more on the table for 2009. Medical homes dustry takes one issue off the table. The

support for primary care providers who or similar arrangements that create co- considerable experience with managed

provide mental health care. ordinated care and a single point of re- care can be built upon to hold down

Today’s discussions about how to im- sponsibility for a person’s overall costs and calm fears of unnecessary uti-

prove treatment and management of health are an opportunity to integrate lization, although it will be important

chronic illnesses presents opportuni- mental health care more fully with pri- to promote strategies that guard

ties for mental health advocates to in- mary care. Co-location of mental against adverse selection and under-

sist that such strategies address the health professionals in primary care treatment. Health reform can also

needs of people with severe mental ill- practices is a well-established effective build on a much more solid base of ev-

ness. For example, proposals for med- strategy. Health reform could provide idence for the effectiveness of mental

ical homes, patient registries, disease incentives for this approach. Similarly, health interventions.

management, and bundled payment policies to help general practitioners Mental health advocates can now

rates that give providers flexibility to provide basic mental health care may propose strategies for improving the

offer services not defined in the nor- have validity. operation of the overall health system

mal benefit package are strategies that Prevention and wellness are signifi- and urge incorporation of mental

could be readily adapted to meet the cant issues for 2009. Prevention of health care within those broader

needs of this population. mental illness is possible for certain strategies. They might suggest improv-

PSYCHIATRIC SERVICES ' ps.psychiatryonline.org ' January 2009 Vol. 60 No. 1 19

of Health and Human Services, US Public

ing integration of mental health in pri- Conclusions Health Service, 1999

mary care and incentives for mental The challenge for individuals interest-

health professionals to be co-located ed in moving mental health into the 3. Funding Sources and Expenditures of State

Mental Health Agencies Fiscal Year 2002,

with primary care; including people mainstream of health in 2009 will be Final Report. Alexandria, Va, National Asso-

with severe mental illness in strategies different from, but in some respects ciation of State Mental Health Program Di-

to improve management of chronic ill- still similar to, the dilemmas that ear- rectors Research Institute, 2004

ness and ensuring mental health treat- lier reformers faced. Policy changes 4. Mark TL, Levit KR, Buck JA, et al: Mental

ment for those with other chronic con- since 1993, along with a significant health treatment expenditure trends,

1986–2003. Psychiatric Services. 58:1041–

ditions; incorporating mental health shift in public attitudes toward mental 1048, 2007

services in medical homes and other health and mental illness, create a

5. Achieving the Promise: Transforming Men-

organized systems of care; promoting more fertile ground for moving to- tal Health Care in America. Pub no SMA-

initiatives for prevention and early in- ward a unified and integrated health 03-3832. Rockville, Md, Department of

tervention; including mental health in system that addresses the mind and Health and Human Services, President’s

New Freedom Commission on Mental

quality improvement initiatives, such body as one. Health, 2003

as incentives for adoption of evidence-

Acknowledgments and disclosures 6. Newhouse JP, Insurance Experiment

based practices and outcomes meas- Group: Free for All? Lessons From the

urement; implementing payment Funding for research on the Clinton health re- Rand Health Insurance Experiment. Cam-

methods that enable flexible benefits, form plan was provided by a grant from the bridge, Mass, Harvard University Press,

Robert Wood Johnson Foundation. 1993

particularly for those with serious

mental illness, while protecting against The author reports no competing interests. 7. Morrissey JP, Stroup TS, Ellis AR, et al: Ser-

vice use and health status of persons with se-

undertreatment by managed care enti- vere mental illness in full-risk and no-risk

ties; and expanding use of electronic References Medicaid programs. Psychiatric Services

records and ensuring compatibility of 1. Arons BS, Frank RG, Goldman HH, et al: 53:293-298, 2002

Mental health and substance abuse coverage

mental health and physical health under health reform. Health Affairs 13(1): 8. Finch RA, Phillips K: An Employer’s Guide

record systems that have appropriate 192–205, 1994 to Behavioral Health Services. Washington,

DC, National Business Group on Health,

privacy protections for mental health 2. Mental Health: A Report of the Surgeon Center for Prevention and Health Services,

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