American Psychosis - The Final Take

I finished reading E. Fuller Torrey's recently released book American Psychosis - How the Federal Government Destroyed the Mental Illness Treatment System .  I recommended it on the basis of a a quick initial read of a brief section on managed care but can provide additional details at this time.  I will start with the conclusion.  Criticizing an expensive, fragmented, and poorly conceived system of care for severe mental illness is a fairly easy task for any psychiatrist who tries to provide care for the target population of people with schizophrenia, bipolar disorder and severe mood disorders. This book concentrates many of the references about deinstitutionalization, incarceration of the mentally ill, victimization of the mentally ill, and aggression and violence by the mentally ill in one place.  In the conclusion Dr. Torrey also recommends some 10 potential solutions to the problems and more importantly suggests the some of these need to be implemented on a small scale rather system wide.  

I am sure that Dr. Torrey and the publisher of this book would not be very happy if I put all 10 of his proposed solutions on this blog, so I am going to focus on one that is consistent with my initial post and one of the major themes of this blog:

"For profit funding of of public mental illness services has been tried and it does not work." 

This is the real experience of anyone who has worked in psychiatric acute care and by that I mean the hospital in your community where people are brought in by the police on emergency holds.  Even in that setting there are levels of acuity.  In a metropolitan area there may be 8 or 10 psychiatric inpatient units but only one or two of them will accept patients with high levels of aggression or suicidal behavior.  In an ideal world these would be units where there are staff with high levels of expertise in treating these severe conditions, but the reality is that economic considerations are at the top of the list.  There needs to be adequate staffing for close supervision and the staff have to be able to deal with high levels of aggression toward self or others.  There also needs to be expertise in recognizing and treating alcohol and drug intoxication and withdrawal states.  There is usually minimal attention paid to the therapeutic aspects of the environment.

When I first started working in that environment it was the late 1980s.  I had just completed a three year stint as the medical director of a very good community mental health clinic that offered case management and Assertive Community Treatment.  I was well trained in community psychiatry at the University of Wisconsin Psychiatry Department and it was good to actually practice it with a team of highly motivated people.  
                                                                   
The first months on the inpatient unit resulted in several "denials" by insurance company intermediaries functioning to ration care.  Keep in mind that all of these patients were in the highest acuity unit in the hospital, had problems with suicidal and aggressive behavior, and many needed detoxification. The rationale of the "peer reviewers" was the the patient did not require acute care or the care could be provided at a less intensive facility.  Apart from county detox facilities that had policies against admitting suicidal or aggressive patients - no less intensive facilities existed.

When you are in that environment trying to provide care, it is pretty obvious that this peer review process is basically an insurance company game to make money.  In the small print in the denial letters there was an option to appeal all denials to an administrative law judge within the state.  I asked my colleagues and nobody had tried that route.  I collected 12 denials and requested a hearing in front of the administrative law judge.  I took a day of vacation to go to court.  A week before the hearing I was informed that my hearing was cancelled and the administrative law judge decided in favor of the insurance company.  I appealed to the Attorney General on the basis of conflict of interest stating that the peer reviewers worked for a competing organization and therefore this was anticompetitive activity.  The AG informed me that they were independent contractors.  How can you be an independent contractor if you collect a paycheck from the organization that is denying care by your competitor?  It was clear to me that the state government was very friendly to the managed care industry.

The whole managed care strategy for rationing care or in  extreme cases shutting down entire psychiatric units was outlined in my previous post on overutilization.  It is the basic money making strategy of managed care organizations.  It essentially doubles down on rationing.  That occurs because hospitals are paid a set amount for taking care of people regardless of how long they are there and that amount is denied in as many as 10% of cases.  If there is one deficiency of this book it is a lack of granularity on this issue.  Dr. Torrey approaches the problem as a top down problem of policy deficiency, driven by an ideology that bed capacity could be shut down and not missed either because of the toxicity of state hospital settings or too much faith in the federal initiated community mental health movement. 

Assuming that a patient can actually get the level of acute care that they need without being thrown out of the hospital by an insurance company, the fragmentation of care does not stop there.  Even though insurance companies say they are emphasizing outpatient care, getting an appointment may be impossible.  The prescribed medications may be denied.  Housing options or community case management for people with severe mental illness are not usually available unless the insurance changes to a public option.

American Psychosis covers the funding and policy issues on a global level before it gets to the suggested solutions.  Excellent examples are given to illustrate these points.  For example, North Carolina is given as the example of what happens when a state mental health system is privatized (p 158).  The parameters of the dramatic deterioration in services that resulted from this maneuver is a well documented example of what happens when a for-profit entity begins to manage care and shift the responsibility for care of serious mental illnesses to the correctional system.

American Psychosis is a well organized analysis of the problems that occurred as the result of an initiative in the Kennedy administration.  It contains a lot of information and references about what has happened as the result of these decisions.  There is also a subtext and that is it is written from the perspective of a psychiatrist who has been a thought leader on the issue of treating people with severe mental illness.  Only a minority of people in the United States understand that perspective and I think that there will be predictable backlash from the constituencies that believe a severe mental illness is a preferred state and that everyone should have the right to enjoy it.  

That is not the experience of any acute care psychiatrist and Dr. Torrey presents that perspective very well. 

George Dawson, MD, DFAPA       

A Primer on the Utilization Game

I want to post some references on the issue of "overutilization" but it is necessary to review the concept before I can post those references of make any further arguments about it.  Most people fail to understand that when they are talking about psychiatric practice in the US that it is tightly controlled by large health care and pharmaceutical middle men who make their profits to a large extent by denying care or insisting on cheaper care.  The very first articles using this term in medicine date back to the 1970s and involve policing various health care providers who were ordering unnecessary tests and procedures largely to prevent the loss of taxpayer dollars.  Some of the first articles looked at the problem as a combination of the need to assess quality of care according to certain standards, illegal behavior or intentional fraud, lack of education on the art of the practitioner, and "to ascertain where there is overutilization or underutilization of services perpetrated either by the practitioner or by the patient". 

In this early reference dental, optometry and podiatry services were an areas of focus and the measures of overutilization included too many x-rays, unnecessary fillings, unnecessary prescription of orthopedic shoes, and shorting prescriptions.  Professional services were evaluated by peer review and were categorized as being problematic because of unusual pattern of practice, poor quality of care,  unethical procedure, office facilities, qualifications for practice, abuse of billing codes, fraud, and self referral.  Although the source of the investigations and lack of equivalence of markers were problematic there ws a suggestion that overutilization was a significant problem.  Underutilization was suggested as a significant problem in under served populations but it was not systematically investigated.

The most systematic unbiased investigation of overutilization was done by the Peer Review Organizations in the late 1980s and early 1990s.  These efforts are documented to some extent in the National Academy of Sciences texts.  The protocol in the PROs consisted of a list of generic quality screens applied by nurse reviewers to hospital and clinic records.  The charts were also reviewed for appropriate utilization.  If a chart was flagged by a nurse reviewer it was sent to a physician reviewer for confirmation.  All physician reviewers were rigorously screened for qualifications and conflict of interest.  No reviewer could review records from any clinic or hospital that they were affiliated with.  Reviewers also had be in active practice and everyone knew that you could not make a living from reviewing charts for the PRO.

The result of the PRO experiment is a significant untold story.  A total of 6.3 million cases were reviewed using these protocols by 54 PROs across the country.  The denial rate for overutilization was 2.7%.  The frequency of quality problems was 1.3%.  The total cost of the program was about $300 million per year compared with the total cost of Medicare for the same year being $81.6 billion. I was a physician reviewer at the time and was eventually notified that the PRO program was being phased out because the cost of the program could not be justified by the amount of care denied ($300 million versus $220 million).  

What happens when overutilization is handled by companies that profit directly by denying care and the physician reviewers are either employees or contractors with that company?  As you might expect, the denial rate heads in a predictable direction.  Although it has not been extensively investigated, this article showed a denial rate of about 10% with rates varying with the companies involved.  As expected health plans with greater profit margins had higher denial rates and discounts.  Denial rates of 8-10% were replicated in another large study.  

At some point it became apparent to insurance companies that behavioral health services (their term for mental health and psychiatric services) would be an easy target for rationing and so-called "carveout" approaches.  This was buoyed by the Employee Retirement Income Security Act (ERISA).  ERISA effectively indemnified insurance companies and behavioral health plans against lawsuits over improper care.  Although there have been some suggestions that the courts may reconsider this indemnification, there has never been any significant movement in this area.  Managed care companies have successfully had their methods included in state statutes and have generally established a standard of care where rationing is a significant component.

A study by the Hay Group looked at the results of managed care rationing on mental health benefits as opposed to general medical benefits between 1988 and 1997.  There found a disproportionate decrease in mental health benefits across a number of parameters including:

- Fee for service plans were prevalent at the beginning of the study (92%) but they were largely replaced by managed care at the end of the study (20%)

- The value of general health care benefits decreased by 7.4% across the study but the value of behavioral health benefits decreased by 54.1%.

- As a total percentage of health care costs, behavioral health care decreased  from 6.1% in 1988 to 3.1% in 1997.

- Behavioral health care benefits were clearly rationed including a decreased number of inpatient days, a visit limit on outpatient care with per dollar visit limits and annual dollar limits that did not correct for inflation across the time of the study.

- Outpatient behavioral health care utilization decreased by 24.6%  between 1993 and 1996 while general health care utilization increased 27.4% in the same period.

- Inpatient mental health admissions decreased by 36.4% while general health admissions decreased by 12.7%.

The Hay Group Study was the best early evidence that mental health care was disproportionately rationed by managed care techniques.

If we fast forward to the present, managed care companies have taken the next step to make their rationing techniques as opaque as possible.  At some point some the largest companies have actually acquired the resources where health care is actually produced – clinics, hospitals, and groups of physician employees.   In that scenario they can bring their “overutilization” bias in house and use case managers to police doctors and tell them when to discharge patients.  The case managers are backed up by medical directors who are promoting the company line of a managed care company and who will do what they can to back up case managers if any physician is advocating for a longer length of stay.  They frequently have proprietary discharge guidelines that have not been scientifically validated that they use to establish discharge parameters.  It is no coincidence that the discharge dates all happen to be about the same time that most payers set as the maximum number of hospital days that they will pay for. 

The end result creates a health care system that is firmly entrenched to ration health care on the basis that there is an imaginary number of days or amount of money that can adequately treat a problem.  The only person who can advocate for the patient is their physician but he or she is clearly up against it.  The problem is more than being harassed by an outside company.  Now the physician’s job is on the line as well.  Disagreeing with the medical director on a consistent basis even a few times does not bode well for longevity within an organization.  In the case of hospital care we have physicians who realize that they need to discharge people in 4 or 5 days whether they have improved or not.  I can say from 22 years of inpatient experience that most people admitted to psychiatric hospitals with major psychiatric disorders do not improve to the point that they can be safely discharged in 4 or 5 days.  My conversations with outpatient physicians confirms this.  Typical managed care hospitals are no longer viewed as places where anything productive happens to improve patient stability.  The staff there will often admit it by saying that they are there for “mental health crises”.  But what happens when the crisis does not resolve in 4 or 5 days?

The limits on mental health care have also severely impacted outpatient care.  There is an emphasis on prescribing medication, often based on brief symptom checklists.  This also allows for the recruitment of large numbers of primary care physicians to treat problems once the checklist becomes the defacto mental health diagnosis.  Treating large numbers of people with anxiety and depression is much less expensive for health plans if the treatment is generic antidepressants or benzodiazepines.  Each patient is basically being “treated” for about $4/ month and they can be seen in follow up visits very infrequently.  It is well established in the research literature that different forms of psychotherapy work as well and in some cases better than medication for these conditions.  The research proven therapies generally require a specific course of treatment on the order of 8 – 20 sessions.  It is rare to see much therapy beyond three sessions in managed care settings and that would generally be received by a patient who was already taking a medication.

At this point we have devolved to a system of mental health care that devotes little time and effort to the treatment of mental disorders.  The treatment that does exist out there is clearly biased toward saving money for large health care companies who provide the bulk of it. All of that rationing is based on the premise that there is overutilization of services when the largest and best study shows that it does not approach the level of rationing that has occurred.

George Dawson, MD, DFAPA

1: Bellin LE, Kavaler F. Policing publicly funded health care for poor quality, overutilization, and fraud--the New York City Medicaid experience.  Am J Public Health Nations Health. 1970 May;60(5):811-20. PubMed PMID: 5462556; PubMed Central PMCID: PMC1348897
2: (1990) Medicare:A Strategy for Quality Assurance, Volume I: The National Academies Press.
3:  (1990) Medicare:A Strategy for Quality Assurance, Volume II: Sources and Methods: The National Academies Press.

4:  Hay Group: The Hay Group Study on Health Care Plan Design and Cost Trends, 1988 through 1997. National Association of Private Health Care Systems and National Alliance for the Mentally Ill, 1998.
5.  Dawson G.  The Utilization Review Hoax.  February 2012.