High Mental Illness Costs Attributed in Part to Avoidable Hospital Use

Mental illness plays a significant role in the higher overall medical costs for “high utilizers” of health care services in New Jersey. This finding makes a compelling case for the integration of general medical care and behavioral health services, say researchers with the Rutgers Center for State Health Policy.

The findings of their study are presented in a report issued in November 2014 titled “Role of Behavioral Health Conditions in Avoidable Hospital Use and Cost.”

“Overall, we found that patients who are high users of hospital care and those with avoidable/preventable inpatient hospital use are disproportionately affected by behavioral health conditions and that behavioral health conditions are associated with a substantial share of hospital costs,” said Sujoy Chakravarty, Ph.D., and colleagues at the Rutgers center. “We conclude that improved integration of [behavioral health] services with medical services among complex patients can lead to lower avoidable hospital utilization and cost savings.”

They used New Jersey uniform billing data from 2008 to 2011, which is gathered by the state Department of Health. Each hospital record provides information on patient demographics, expected primary and secondary sources of payment (Medicare-Medicaid dual eligible, other Medicare, Medicaid, private insurance, self-pay/uninsured), clinical characteristics (primary and secondary diagnoses, procedures), patients’ residential ZIP code, time of discharge, hospital charges, and information on the admitting hospital.

The geographical areas studied were low-income communities in the large cities of Camden, Trenton, and Newark and 10 other low-income communities that were estimated to have at least 5,000 Medicaid beneficiaries. The researchers characterized two categories of hospital utilization: avoidable/preventable hospital stays and emergency department (ED) visits that arose from inadequate ambulatory care in the community. The second category represents repeated use of hospitals and EDs by patients, classified as high users. Within each category, the researchers identified the prevalence of behavioral health conditions, in which they included mental illness, substance abuse, and severe mental illness (SMI).

Among the major findings:

• Behavioral health conditions were disproportionately present on the billing records of inpatient high users compared with inpatients who were not high users. This difference was higher among Medicaid beneficiaries (80.8 percent for high users versus 25.1 percent for non–high users).

• Among Medicaid beneficiaries, SMI was present in 44.4 percent of inpatient high users compared with just 9.6 percent of inpatient non–high users.

• More than 40 percent of avoidable/preventable inpatient hospitalizations were associated with behavioral problems, compared with 35 percent of nonavoidable hospitalizations. The difference was higher for Medicaid beneficiaries (47.9 percent for avoidable hospitalizations versus 34.2 percent for nonavoidable hospitalizations).

• One or more behavioral diagnoses, based on billing records, were associated with 35.7 percent of all inpatient hospitalizations, 34.8 percent of all inpatient costs, 17.5 percent of all ED visits, and 20.8 percent of all ED costs.

• Total inpatient costs associated with behavioral health were $880.1 million, and corresponding ED costs were $73.1 million.

“A disproportionately higher proportion of [behavioral health] conditions among patients with avoidable/preventable hospitalizations and/or hospital high use would guide efficient targeting of mental health and substance abuse services within these populations,” the researchers maintained. “It would also shed light on the need to restructure provider payment structures and incentives required for integrating physical and behavioral health care services.” ■