Health Care Reform Tracking Project

From 1995 through 2004, the Health Care Reform Tracking Project (HCRTP) tracked publicly financed managed care initiatives and their impact on children with mental health and substance abuse problems and their families. The study used a mixed methodology. (See sidebar for products related to each method.)

The HCRTP was conducted jointly by the Research and Training Center for Children's Mental Health at the University of South Florida (USF), the National TA Center for Children's Mental Health at Georgetown University, and the Human Service Collaborative of Washington, DC.

In general, research focused on; impact of design and structural characteristics of managed care reforms; impact on service delivery; impact on family and youth involvement; impact on providers; impact on cultural competence; impact on interagency relationships; impact on finance; and accountability issues. Researchers considered new patterns of service delivery, how families access services, what services were most likely to be provided, and the effect on interagency development of systems of care within communities. They also looked at cost savings and whether the reforms reduced family involvement in planning for their children and communities.

The Findings
The findings were both encouraging and alarming:

  1. The anticipated cost savings often were not realized despite the assumption that managed care will save money. In addition, the research revealed that a family's ability to access crisis care was reduced and that youth with serious or long-term needs were more likely to be shifted between systems (e.g., child welfare, juvenile justice) after initial interventions.
  2. In most states, those with knowledge about children's behavioral health issues (families, children's systems representatives, providers and child advocates) were not involved in the initial design of managed care reforms. This is beginning to change in many states as children's expertise is sought to resolve implementation problems and as children's stakeholders become more informed and vocal.
  3. Most states in this sample designed their managed care reforms to provide brief, short-term services only, leaving extended care to other systems.
  4. In all states in this sample, behavioral health prevention services are not integrated into managed care reforms. It also was reported that while managed care is improving early identification and intervention for physical health problems, this is not the case with behavioral health problems.
  5. The study also revealed the extent to which funding drives service delivery. Although funding issues are complex, there were several clear messages. When funding was fragmented (i.e., monies were not integrated within the health care system, but resided across several state systems) services were fragmented as well. Cross-agency pooling of funds-found by previous investigation to be important to supporting arrays of services-was not happening in these states.
  6. It is often assumed that managed care will save money. When states began managed care reforms 5 years ago there was little or no utilization data, and their estimates were based on experience with a traditionally under-served population. As penetration increased (i.e., increase in % of families needing services that receive services), costs increased. Anticipated cost savings often were not realized, partially because initial capitation rates were too low, too much risk was assumed by the MCO, and declines in hospitalization rates were often offset by marked increases in RTC utilization. States also found fewer resources were available for non-Medicaid populations. Mary noted that it will be interesting to see what happens when the Title XXII Child Health Block Grants-which feature a behavioral health care benefit aimed at the working poor/uninsured-are added to the mix.
  7. In most states, managed care has had little impact on expanding the availability of culturally diverse providers, a pre-existing problem in most states.
  8. Managed Care Organizations (MCO's) had little experience with the array of child mental health service needs. They were also inexperienced with auxiliary needs such as transportation to services.
  9. Where there had been movement toward family-centered services, services often reverted to child-centered and office based.
  10. Credentialing issues were also causing system of care initiatives to lose ground, especially in rural communities. Because some MCOs credential individuals rather than agencies, many community service providers were no longer eligible for payment, and small agencies may have no professional staff that qualified to join the network. Additionally, certified substance abuse counselors were not always included in the system.
  11. All states are facing barriers to describing what is actually happening to families under managed care. Outcome measures are in their infancy and must overcome several structural problems. For example, MIS systems often fail to separate child clients from adults, or capture demographic data. A child may carry several different identification numbers assigned by different MCOs and systems. Because some states placed reform implementation under local control, it was possible for a family to find themselves shuffled among different health care jurisdictions, with different paperwork collecting different information in each.

So what is the good news about managed care and health care reform? At this point the key lesson is that states are learning as they struggle with how to deliver child mental health and substance abuse services. There have been gains in areas such as interagency and family involvement in system planning and access to basic services. Contract language now includes cultural diversity in staff, interagency coordination of services, and parent involvement, although reality has not caught up with regulation. Six states have begun developing measurement systems for children.

Mary Armstrong suggested that state leadership is necessary for future growth. "States must become better purchasers," Mary said. "Much depends on what is put into contractual provisions with MCOs. States should not lose sight of what we've learned on how to provide services."

For further information about this study, contact:

Mary Armstrong, Ph.D.
Research and Training Center for Children's Mental Health
University of South Florida
(813) 974-4671

Beth A. Stroul
National Technical Assistance Center for Children's Mental Health
Georgetown University
(703) 790-0990

Sheila A. Pries
Human Service Collaborative
(202) 333-1892

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