MENTAL-HEALTH SUBSTANCE-ABUSE TREATMENT IN MANAGED CARE - THE MASSACHUSETTS MEDICAID EXPERIENCE

Massachusetts was the first state to introduce a statewide specialty mental health managed care plan for its Medicaid program. This study assesses the impact of this program on expenditures, access, and relative quality. Over a one year period, expenditures were reduced by 22 percent below predicted levels without managed care, without any overall reduction in access or relative quality. Reduced lengths-of stay, lower prices, and fewer inpatient admissions were the major factors. However, for one population segment-children and adolescents-readmission rates increased slightly, and providers for this group were less satisfied than they were before managed care was adopted. Less costly types of twenty-four hour care were substituted for inpatient hospital care. This experience supports the usefulness of a managed care program for mental health and substance abuse services, and the applicability of such a program to high-risk populations.