Professional News
MCO Toll on Psychotherapy Difficult to Undo
Psychiatric News
Volume 40 Number 1 page 10-11
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Steven Sharfstein, M.D., discusses obstacles that managed care places in the way of psychotherapy. Joseph Merlino, M.D. (center), and Paul Appelbaum, M.D., also addressed this issue. 

Evidence-based data, studies of medical-cost offset, and advocacy will be needed to reverse the managed care industry's skeptical view of dynamic psychotherapy, according to Paul Appelbaum, M.D.

"Research on the greater efficiency and effectiveness of integrated therapy will be essential to restoring the provision of psychotherapy by psychiatrists," said the former president of APA, speaking at the 48th

winter meeting of the American Academy of Psychoanalysis and Dynamic Psychiatry in Washington, D.C. "Without those efforts, psychotherapy will die out, and that would be a sad end to a core aspect of psychiatry for over 100 years."

Psychotherapy was an early target of managed care organizations (MCOs) during their ascendancy in the 1990s, said Appelbaum, chair of the psychiatry department at the University of Massachusetts Medical School and director of its law and psychiatry program.

Psychiatric illness could be dismissed both as "not real" and" untreatable," so that paying for treatment was deemed not worthwhile, he said. MCOs slashed mental health spending by 54 percent from 1989 to 1998, helped by an "oversupply" of clinicians, especially nonphysicians. The overall percentage of payments for mental health treatment fell in the same time from 7.2 percent to 5.1 percent (not counting medications) and now hovers around 2 percent, a decline that only confirms to employers just how unimportant mental health benefits are, he said.

There were hidden burdens to managed care besides reduced payments. Physicians had to bear added costs of utilization reviews, costs of rebilling when invoices were rejected for minor clerical errors, or long-delayed payments even when bills were correct.

Managed care also had disproportionate effects on the practice of psychotherapy, said Appelbaum. More patients were seen at least once, but the number of visits per patient dropped, reducing the intensity of therapy. An increased emphasis on psychopharmacology meant that while expenditure per patient remained flat (going from $79 to $78 for adults from 1992 to 1999), the mean number of prescriptions rose from 4.3 to 5.9 per user, and mean expenditures rose from $166 to $326 per year, he said.

"More money was spent on pills, not on people delivering care," said Appelbaum.

The MCOs also made it more financially rewarding for psychiatrists to bill for short pharmacology visits than for longer psychotherapy. He cited one study showing that psychiatrists might receive $107.64 for a single 45-50 minute therapy session, but could reap $182.16 for three 15-minute medication-management visits. Many hospitals and clinics now hire psychiatrists only to write prescriptions.

Even when authorized, care was often divided among several practitioners, including nonpsychiatrists.

"This leads to difficulties in coordinating care," said Appelbaum. "You lose part of the picture of what's going on with the patient."

One difficulty in making the case for psychotherapy coverage lies in its inherent incompatibility with the idea of health insurance, added APA President-elect Steven Sharfstein, M.D. For health insurance to work, there must be some definable treatment for a definable illness, one with measurable outcomes, he said.

Instead of this clarity, there are more than 400 kinds of psychotherapy with few data on what works and why.

"What works best? Short- or long-term therapy? Group or individual treatment?" asked Sharfstein, president and chief executive officer of the Sheppard Pratt Health System in Maryland. "The effect may be due as much to the therapist as to the therapy."

This lack of specificity among therapies makes it hard to match patients with therapists who could treat them best, he said, and the nature of psychotherapy makes it hard to fit into the mold of managed care.

"Psychotherapy takes time," said Sharfstein. "It does not follow a smooth curve because each session is not an individual treatment."

Meantime, health care costs are still rising, insurance companies too often offer minimal benefit packages with little or no mental health coverage, and medical savings accounts will shift the burden of outpatient treatment to patients and families, said Appelbaum. One comprehensive solution, universal health coverage, remains "unimaginable," he said. So bringing mental health treatment back from the brink means making the case for the effectiveness of psychodynamic therapy and the inefficiencies of split care.

"We need data on evidence-based treatments, studies of when psychotherapy works, in what settings, and for which disorders," he said. "We need cost-offset studies to show when medical expenses are reduced with increased psychotherapy, and we need to demonstrate to businesses that `presenteeism' is an enormous drag on the economy." ▪

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Steven Sharfstein, M.D., discusses obstacles that managed care places in the way of psychotherapy. Joseph Merlino, M.D. (center), and Paul Appelbaum, M.D., also addressed this issue. 

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