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How Managed Care is Affecting Addiction Treatment

Today, more than 80 percent of American workers are in some form of managed care health plan, compared to about 29 percent in 1988. While managed care has put some much-needed controls on the delivery of services, experts say that it has also forced many substance abuse treatment centers to close or cut back on services. A 1996 story in the VILLAGE VOICE reported that in the past decade, over half of the country's private treatment centers have closed.

Also, ten years ago, insured people who received inpatient treatment could often get 28 days of care, which costs about $14,000. Today the average covered length of stay is closer to 7.7 days. "Inpatient care for addiction treatment has been virtually eliminated," says Mark Covall, executive director of the National Association of Psychiatric Health Systems. "What you see today is very much an outpatient-oriented program with very short stays in the hospital, primarily for detoxification."

As a result, says experts, patients who are sick enough to be in a residential setting are now having to seek care in outpatient and evening treatment programs, which may not provide enough support for lasting results. Jack Gronewald, COO of the Ridgeview Institute, a treatment facility, says, "For some patients, [the shorter stays] have led to almost a revolving door." He adding that rates of relapse have been greater since the advent of managed care. Providers are having to cram a lot more information into shortened courses of treatment, they say, and patients are having to absorb much more, at a time when they are likely to be shaky, confused, and still craving their drug of choice.

Thomas McLellan, Ph.D., a professor at the Center for Studies of Addiction at the University of Pennsylvania School of Medicine, agrees. In studies in Philadelphia, he says, managed care has reduced the quality of services, compared to those available under traditional insurance coverage. "[With more extensive treatment,] we saw significant changes in employment, family function, and psychiatric status; and they were quite related to the provision of services for those problems. When those services were cut, you saw increases in alcohol and drug use," he says.

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There have been cases where consumers have persuaded health insurance companies to reinstate substance abuse benefits. The most recent example is a case in New York. Last October, Attorney General Dennis Vacco threatened to sue Blue Cross & Blue Shield of Central New York for denying benefits to patients seeking drug and alcohol treatment. A year earlier, Blue Cross had warned providers that it would be reviewing claims retroactively and subsequently began denying a large number of outpatient claims as well as nearly all inpatient claims. "The company inexplicably changed the rules in the middle of the game -- without any discussions with the providers and to the detriment of the patients," says Vacco. Many of the facilities were forced to turn away patients, and substance abusers were discouraged from seeking treatment for fear that their insurance wouldn't cover their costs. In November, the health plan backed down and agreed to pay some $700,000 for inpatient and outpatient treatment claims that had been improperly denied. The health plan also agreed to pay the attorney general's office $15,000 to cover the cost of the investigation.

Also, many managed care plans that do have good provisions for substance abuse treatment don't publicize the fact. Drawing attention to a good program, they believe, could promote adverse selection, attracting patients who will use more extensive and expensive resources than others.

-- Janet Firshein

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