HCCI analysis suggests jump in spending on mental health-substance use admissions

Published on February 27, 2013 at 6:56 AM · No Comments

HCCI analysis suggests jump in spending on mental health-substance use admissions

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("Parity Act") increased access to mental health and substance use services in hospitals, yet consumers continued to pay more out-of-pocket for substance use admissions than for other types of hospital admissions, finds a new Health Care Cost Institute (HCCI) report.

The report is one of the first of its kind to look at hospital spending, utilization, prices, and out-of-pocket payments for mental health and substance use admissions for those younger than age 65 with employer-sponsored health insurance. Between 2007 and 2011, spending on hospital admissions for mental health and substance use grew faster than spending on medical/surgical admissions. In 2011, spending on mental health and substance use admissions was driven by an uptick in utilization.

The Parity Act enhanced the 1996 Mental Health Parity Act by extending parity to substance use treatment. Under the Parity Act, large group health plans were required to make behavioral health coverage rules similar to medical/surgical benefit rules. Large group plans were also required to make copays, deductibles, coinsurance, and out-of-pocket maximums for behavioral health care equivalent with the most common medical/surgical treatments.

Substance Use Admissions Surge

In one of the first analyses of the law's impact, HCCI found substance use admissions grew by 19.5 percent in 2011 for people younger than age 65 and covered by employer sponsored health insurance. By comparison, between 2010 and 2011, mental health admissions grew by 5.9 percent and medical/surgical admissions declined by 2.3 percent for this population.

"There's extraordinary growth in hospital substance use admissions by people with private health insurance since 2009," said HCCI Board Chairman Martin Gaynor, E.J. Barone Professor of Economics and Health Policy at Carnegie Mellon University. "What is driving these increases is unclear."

Out-of-Pocket Spending After Parity Law

In 2011, out-of-pocket payments for mental health admissions more closely aligned with payments for medical/surgical admissions. However, the amount spent out-of-pocket on substance use admissions remained higher than payments for medical/surgical admissions. Out-of-pocket payments for substance use hospital admissions grew at twice the rate of out-of-pocket payments for mental health or medical/surgical admissions between 2010 and 2011.

"While it is too soon to understand the full impact of the Parity Act, we need to be looking carefully to make sure we understand why these hospital out-of-pocket payments may be growing at a faster pace than medical spending. Moreover, while there is widespread interest in better understanding the drivers of cost and utilization, the drivers, whether they be benefit design, the economy, or something else, need to be monitored so we better understand them," said HCCI Executive Director Dr. David Newman.

Jump in Spending Accompanies Higher Use

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