The Fate of Mental Health in Health Care Reform: I. A System in CrISiS Jos#{233} M. Santiago,
M.D.
The U.S. health care system is in the midst of a severe crisis. More than 50 million Americans are uninsured or underinsured. Medicare and Medicaid are not adequately serving populations in need. Analyses and reform proposals are often based on biased interpretations of data, resulting in confusion and heated debate. To
avoidjeopardizingpsycbiatric
care
in a national health care reform movement, we must understand the causes ofthe national crisis. in the first part ofa tue-part paper, the author describesfactors such as demographic trends and limitations in public health coverage that have contributed to the crisis. Outcomes ofthe current system include higher morbidity and mortality among the uninsured and a high prevalence ofuntreatedillness. The author reviews direct and indirect costs of health care and concludes that in attempts to solve the diff icult equation of access, cost, and
quality, in serious
mental
health
services
are
jeopardy.
One ofthe most important policy issues facing the United States in the 1 990s is the need to reform the health care system (1). Debating the merits of the current approach to the delivery of health care is no longer relevant. How and when to reform the system are the most pressing points of contention. For too many Americans, the system simply does
Dr. Santiago is professor of psychiatry at the University of Anzona College of Medicine, 1501 North Campbell Avenue, Tucson, Arizona
85724.
Hospital
and Community
Psychiatry
Services
not deliver; for the nation as a whole, the costs have escalated at an alarming rate. As a result, the U.S. is involved in an intense debate over the structure and content ofour overdue reform. Increasing access to care and controlling costs may require major compromises. To avoid jeopardizing psychiatric care in a national health care reform movement, we must understand the causes of the national crisis and the available methods to develop remedies. We can then analyze the current reform proposals and their implication for psychiatry. Finally, we must develop strategies to actively preserve psychiatric care for our patients in a fast and possibly radically changing health care scene. In the first of two papers, the U.S. health care system and the sources of its difficulties are examined. Mental health professionals confronted with the incessant barrage of facts and reform proposals must beware of two pitfalls. First is a false sense of being thoroughly knowledgeable about the issue and what the numbers tell. Second is an equally misleading conviction that mental health coverage is only a technical battle ofcosts, outcomes, offets, and quality. A thorough review of the facts may reveal that the crisis is such that mental health services are in very serious jeopardy.
The
U.S.
health
care
system
It is estimated that 31.5 million Americans under the age of 65 are without insurance, of whom 10.9 million have incomes below the federal poverty level. Since access to care is not a static variable, the number of uninsured must also be computed over time. For some Amencans, health care benefits may be available only temporarily, based on
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employment on financial status. For example, 63.5 million people were uninsured for a period ofat least one month between 1986 and 1988 (2). Nearly balfofthe uninsured nonelderly population is under 25 years ofage. The most vulnerable group is the young adult population, ages 18 to 24 (27.3 percent) (3). Children are also at high risk ofbeing uninsured. A lack of preventive measures at an early age greatly jeopardizes the future health ofthese children. Minorities are also at a higher risk of being uninsured. Hispanics, for example, are more likely to be uninsured than any other ethnic group (4). In 1987, Hispanics were uninsured in greater proportion (30.1 percent) than African Americans (20.4 percent) or Caucasians (12.6 percent) (5). Another large group at risk is those who have inadequate health insurance coverage. Twenty million people under the age of 65 arc estimated to fall into this category (6,7). The reasons for the unavailability of health care coverage are complex. Eighty-four
percent
of the
nonelder-
ly uninsured population work for firms with fewer than 100 employces. Small firms cite high cost and unavailability ofcoverage as the main reasons for not offering health care benefits (8). Employees of small businesses have been excluded from health care coverage because of problems with medical underwriting (prices of insurance skyrocket when even a small number of “high-risk” employees work for a firm), preexisting conditions, high deductibles or copayments, and avoidance of high risks and high costs. The insurable employee is therefore younger and healthier and the least in need of insurance coverage. Individual in-
1091
surance policies are quickly becoming an extinct commodity. For minorities, access to health care is limited due to a multiplicity of factors. For Hispanics, for cxample, adverse socioeconomic factors, high-risk demographic and epidemiological variables, limited access to medical institutions, and limited availability of Hispanic mental health professionals severely restrict their access to medical services (9). Underinsurance is mainly caused by the limitations and exclusions imposed by insurance coverage. First, exclusions
may
place
the
insured
at
risk for the fill cost of the illness. Second, copayments and deductibles may be onerous, especially ifno cap is placed on out-of-pocket expenses. Third, a maximum benefit limit per year and a lifetime maximum provision pen illness, such as psychiatric illness, can quickly be exhausted, leaving the enrollee unprotected. Public health care coverage is also lacking for a substantial number of persons in need ofservices. Medicaid reaches only 42 percent of people who fall below the poverty line (6), even though it now covers more than 26 million people. Medicaid, being tied to welfare, targets primarily aged, blind, and disabled persons and families with children. Single persons under age 65 and couples without children do not qualify, regardless of poverty. Most males are thus excluded from Medicaid coverage. Furthermore, 70 percent of the resources allocated by Medicaid are consumed for long-term cane by 25 percent of the eligible recipientsthe elderly and disabled populations. To remedy some of the glaring neglect, the Omnibus Budget Reconciliation Act of 1990 mandated coverage by states to include pregnant women and children under age six for families with incomes up to 1 3 3 percent of the federal poverty line. In late 1990 Congress mandated phase-in coverage that would include all children in ftmilies below the poverty line by 2002. To make matters worse, eligibility criteria for Medicaid vary widely from state to state and most often include only persons well below the poverty level. In one state only fami-
1092
lies with incomes 1 3 percent below the poverty level are eligible. Most states have failed to adjust eligibility standards for inflation, further reducing the number of people who can gain access to the publicly funded health care program. Mentally ill persons are eligible for Medicaid mainly through Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). Only half of the estimated 1 million seriously mentally ill persons living outside institutional settings are on 551 on SSDI (10). Enrollment procedures for 551 and SSDI are cumbersome and excessively bureaucratic and create an aversive application process that most seriously mentally ill persons are unable to negotiate. Since Medicaid excludes many public programs, such as state hospitals, from reimbursement, no incentive exists to enroll patients for Medicaid coverage in public-sector programs. In addition, services allowable under Medicaid are significantly restricted by three fuctors (1 1). First, most states choose to give few of the optional benefits. Second, significant gaps are left in the treatment and rehabilitation needs ofpatients. Third, pricing ofservices is unrelated to cost and, in general, reimbursement rates are lower than those paid by other third-party payers. Medicare spends only 3 percent of its budget on mental health care (12), while 15 percent of Medicaid payments cover such care (1 3). Peoplc who are 65 and older, recipients ofSSDI payments for more than two years, and patients with end-stage renal disease are eligible for Mcdicare. Medicare targets acute medical illnesses and the medical management of chronic illnesses, and it inadequately addresses the needs of persons with chronic mental illness. Needs for long-term care in the form
The 1989 budget reconciliation (Public Law 101-239) liberalized payments for psychotherapy under Medicare by removing any limits. While parity with other medical conditions has improved, treatment for mental illness still requires a 50 percent copayment, rather than the 20 percent required for medical treatment. Older Americans-that is, pensons over the age of65-can also face serious risks of being underinsured in spite of Medicare and Medicaid. Medicare has substantial cost-sharing requirements as well as significant premiums that are barely affordable by elderly persons. Because of stringent financial eligibility cnitenia, Medicaid covers only a small fraction ofthe elderly population. Medicare has been perceived as an entitlement, earned after years of labor and contributions. It covers acute medical care and acute episodes of long-term illnesses. For persons with mental illness, it leaves much to be desired, especially for chronic conditions and for continuity ofcare nequired to improve psychological functioning. Medicaid, tied to welfare, is seen as a privilege, a measure to be used when all else has failed. Each state has been able to interpret the minimal welfare coverage needed, resulting in a disparate and arbitrary mosaic of saftty nets. Mentally ill persons have suffered in fragmented, inadequately compensated systems of cane that favor expensive institutional
services
and process and preventive
facilitating care.
Outcomes
in the
over
a structure
continuous
tation, and supports are excluded. Reflecting the limitation on coverage for long-term illness and disability, there is a 190-day Medicare cap on care provided in freestanding psychiatric facilities. Finally, Mcdicane provides no subsidy for prescriptions, a fact that leads to increased recidivism and exacerbations.
current system Outcomes in the U.S. health cane system reflect the inaccessibility, fragmentation, and inefficiency that are so pervasive. For the uninsured, the consequences are indeed serious. After analyzing national data, the Pepper Commission found that uninsured persons were a third less likely to see a physician and utilized 25 percent fewer hospital days than those who were insured (7). Uninsured persons with severe symptomatology were half as likely to see a physician as insured persons. The amount and type of cane are
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Community
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also different for uninsured persons than for those who are insured. Significant differences between the two groups were found in whether cancer patients received surgery, anticancer treatment other than surgery, or no treatment at all (14). In-hospital death rates were found to be higher among uninsured persons. They were less likely to undergo high-cost on high-discretion diagnostic procedures and more likely to have abnormal findings on pathology reports on specific tests. Being uninsured significantly influences the use of resources (15). As a result, uninsured persons are more likely to suffer from higher morbidity and mortality. For cxample, due to lack ofprenatal care, infants born to parents without insurance are 30 percent more likely to become ill on die than those born to insured parents. In 1986 20 percent of uninsured women did not have prenatal care. The consequence can be found in infant mortality rates. The U.S infant mortality rate decreased from 10.2 to 9.5 deaths per 1,000 live births between 1987 and 1990. However, the U.S. infant mortality is twice that of Japan, the country with the lowest rate in the world, and ranks only 22nd among other developed nations (16). In the U.S., the infant mortality rate among African Americans is 17 deaths per 1 ,000 live births, double the rate among whites. In mental health, the outcomes are no less worrisome. The Epidemiologic Catchment Area(ECA) study estimated the one-month prevalence ofmental disorder among those 18 years old and over at 1 5.4 percent. For people 45 years old or younger, the prevalence was higher (1 7). The
Resources The causes of the poor performance of the U.S. health cane system are not simply rooted in the lack of resources. The U.S. spends more than
1 1 percent of its gross national product (GNP) on health care ($7 1 5 billion in 1991), while Canada spends 8.6 percent; Britain, 7 percent; and Japan, 5 percent. The U.S. spends $2,05 1 per capita on health care, while Canada, second in expenditunes, spends $1,483 (19). According to a recent survey of medical plans, costs pen employee rose from $2,600 in 1989 to $3,161 in 1990 in the U.S. The costs per employee per year were $1,600 in 1984. An enormous segmentation of insurance coverage leads the U.S. to allocate 2.6 percent ofits GNP for the health care bureaucracy, in contrast with the 1 1 percent allocated by Canada (20). In addition, the efficiency of the administrative structure in the U.S. has significantly decreased, while the Canadian system has increased its efficiency. In 1987, the U.S. spent between 19.3 and 24. 1 percent of its total health care budget on administration; Canada spent between 8.4 and 1 1.1 percent. The U.S. figures represent a 37 percent increase between 1 983 and 1987, while in Canada administrative costs decreased during these same years. Stated differently, the administrative costs in the U.S. are 117 percent higher than in Canada (21). In 1991, the cost ofmental illness and substance abuse to U.S. society was nearly $297 .4 billion pen year. Mental illness accounted for close to $1 36. 1 billion while alcohol abuse cost $90. 1 billion and drug abuse $71.2 billion (22). The costs can be divided into direct costs, payments resulting from the cane ofthe illness, and indirect costs, or lost resources due to morbidity and mortality. In 1963 indirect costs were twice the direct costs. By 1980 the ratio was reversed, reflecting perhaps the increased availability of services, but also consistent with the high rate of medical care costs and lagging wage increases in the last two decades (23,24). At the federal level, the Medicaid budget has grown consistently over the years. For example, total Mcdicaid payments increased by 380 percentbetween 1975 and 1989(25),an annual rate of increase of 11.3 percent over 15 years.
Hospital
November
ECA
study
estimated
that
3 1 to 34
percent ofpensons with a mental disorder are left untreated, that 56 to 59 percent are seen only in the general medical sector, and that only 8 to 12 percent use mental health care services. Minorities are at an even higher risk of being underserved (18).
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Conclusions
and implications The mounting tension resulting from escalating costs, discriminatory access, and mediocre outcomes has led to a flurry of public debates on proposals to reform the financing and delivery of health cane. The “Holy Trinity” of access, cost, and quality has been reconfigured according to several plans that purport to resolve the health cane dilemma faced by the U.S. Universal access and cost controls are included in all serious proposals. How quality is to survive is a matter ofdebate. Several factors contribute to the difficulty in resolving this dilemma (26). First, the number of elderly persons in the U.S. will continue to increase as the decade unfolds. The total number of persons age 7 5 or olden will expand by 10 percent by the year 2000(27). This increase will translate into higher utilization of hospitals, nursing homes, and physician services. The increase in the number of middle-aged peoplenearly 4 percent per year-will also contribute to a higher use of medical services. Second, the diversity ofthe population will continue to increase dramatically. The large number of immigrants will be mostly from nonEuropean countries. The unique needs ofeach minority group will requine a more costly adaptation in the delivery of services. Third, the labor force will expenience an overall decrease in numbers in the 1990s. Workers will be olden because ofthe aging population, and more immigrants will enter the labor force. The financial consequences for health care delivery will be fiercer competition for trained health care workers and difficult adjustments created by cultural and linguistic factors. Fourth, 90 percent of Americans are convinced that the U.S. health care system is in a state ofcnisis, and 85 percent believe that reform is needed (28). Fifth, the trend is for Americans to be divided into two major groups: those who seek quality and options in health care coverage, and those who are primarily besieged by access 1093
and cost difficulties (29). By and lange, a majority (7 1 percent) are satisfied with the quality of the health cane services they receive despite their concern for the health care system. More recently, however, a growing number of Americans are demanding changes, not only because of concern for uninsured pensons but also because ofpersonal cbssatisfaction with the cane received (30). Furthermore, most Americans do not easily accept the imposed results of difficult choices such as restricting the scope of services, shifting costs from employers to employees, limiting access to specialists and primary care practitionens, and increasing copayments and deductibles (29). These five factors result in an access, cost, and quality equation that is difficult to resolve. Americans want to ensure universal access to health care, decrease cost, and maintam quality. The number of service users will increase while the labor force will decrease and become more diverse. The elderly population is already a formidable force that will increase in numbers and in political power. This group has not shown a tendency to accept limitations in health care services on other entitlements. So far, the emphasis has turned to cost control at the expense of quality and to a frustrating search for universal coverage. Overwhelmingly (75 percent ofthose polled), the public is seeking a specific reduction in health cane costs (30). Government is seen as the solution and price regulation as the method. At the federal level, health care is second only to the economy in voters’ minds, ahead of taxes, jobs, and education. Most important, 82 percent of those polled felt insecure in their ability to maintan proper health cane coverage (30). As a result of the escalating costs and the growing concerns and fears ofthe American public, as well as the contradictory wishes and solutions and the formidable forces preventing a resolution of the crisis, the weaker points of the system will be targeted as superfluous on, at least, dispensable. Mental health coverage is in mortal danger from the pressures,
1094
given the demand for reduced costs and increased options for medical services. Because mental health has been presented by many as an optional service, it has become a target in the search for cost control. The illinformed consumer will not readily understand the loss of quality.
617, 1988 Hadley J, Steinberg EP, Feder J: Cornparison of uninsured and privately insured hospital patients’ condition on admission, resource use and outcome. JAMA 265:374-379, 1991
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