New Case Study Indicates that Mental Health Parity Did Not Raise Costs for a Large Employer Who Used a Managed Care Arrangement

Press Release Date: May 14, 2002

Using a managed care "carve-out" arrangement to provide equal coverage for mental health services did not raise costs for one large employer, according to the findings of a case study published in the May/June issue of Health Affairs.

Researchers, led by Samuel H. Zuvekas, Ph.D., of the Agency for Healthcare Research and Quality, examined the impact of a state's mental health parity mandate on a large employer group that simultaneously implemented a managed care "carve-out" for its mental health and substance abuse benefits. Carve-outs are services provided within a standard health benefit package but delivered and managed by a separate organization. The researchers, who included current and former researchers at the National Institute of Mental Health, compared plan costs, use patterns, and access in the 1 year prior to the changes with the 3 years following the changes.

Although the number of people treated for mental health problems increased nearly 50 percent, the costs to the plan for mental health services declined by almost 40 percent over the 4-year study period. Costs for employees and spouses together remained flat over the study period, while costs for children and adolescents declined by 64 percent. Most of this decline was due to reducing the lengths of stay for inpatient mental health treatment. Managed care did not limit access to outpatient treatment; there was nearly a 50 percent increase in the number of people using outpatient treatment with no change in the average number of visits.

Details of this study are in "The Impacts of Mental Health Parity and Managed Care in One Large Employer Group," published in the May/June 2002 issue of Health Affairs. Please note that due to confidentiality issues, the name of the large employer group, the state in which it is located, and the specific years of the study cannot be provided.

For more information, please contact AHRQ Public Affairs, (301) 427-1364: Karen Carp, (301) 427-1858 (KCarp@ahrq.gov) or Farah Englert, (301) 427-1865 (FEnglert@ahrq.gov).

Internet Citation:

New Case Study Indicates that Mental Health Parity Did Not Raise Costs for a Large Employer Who Used a Managed Care Arrangement. Press Release, May 14, 2002. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/press/pr2002/mentalpr.htm