Monday, April 03, 2006

Mental Health Parity: New Evidence

The current New England Journal reports a study comparing federal employee health benefit plans with and without mental health parity (full coverage for mental health services on par with coverage for other medical services). They found that:


The implementation of parity was associated with a statistically significant increase in use in one plan (+0.78 percent, P<0.05) a significant decrease in use in one plan (–0.96 percent, P<0.05), and no significant difference in use in the other five plans (range, –0.38 percent to +0.23 percent; P>0.05 for each comparison). For beneficiaries who used mental health and substance-abuse services, spending attributable to the implementation of parity decreased significantly for three plans (range, –$201.99 to –$68.97; P<0.05 for each comparison) and did not change significantly for four plans (range, –$42.13 to +$27.11; P>0.05 for each comparison). The implementation of parity was associated with significant reductions in out-of-pocket spending in five of seven plans.


The NEJM editorial opines:


Although parity did not lead to increases in the use of services relative to a comparison group, it did lead to systematic reductions in out-of-pocket spending for mental health services. Parity coverage performed just as insurance coverage should. It shifted costs from out-of-pocket payments to the insurance company (and eventually to very small increases in insurance premiums) without leading to an increase in the use of services. This shift means that, in today's mental health environment, parity coverage unambiguously improves the value of health insurance. It moves risk away from individual patients without changing the incentives that they face.


The evidence is stacking up, and policymakers will not be able to ignore it much longer. Treating psychiatric care as a separate service from general medical care means that the organization that sees the costs--the mental health insurer--does not reap the reduction in general medical costs that occurs when good mental health care is provided, so there is no incentive to provide adequate mental health coverage. Parity ensures that the same insurance company has a stake in both psychiatric and general medical care, and providing a system that handles both types of problems well. Parity makes sense for patient care, and now the data shows it is good, or at least not bad, for the bottom line.

Because integrated mental health care can decrease general medical costs, it should be a key part of a comprehensive national plan to control the growth of health care costs. However, if one company implements parity, it would fear patients with mental health problems flocking to its plan from others, so parity must be implemented simultaneously across the insurance industry. That's where federal action is necessary.


Let your senator or representative know if you think that mental health parity is important.

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