Companies Face Obstacles To Providing MH Benefits

“Investing in comprehensive mental health benefits is a sound business strategy.” That was the conclusion of senior executives and health benefits experts at seven large companies that offer generous mental health benefits to their employees. They believe that comprehensive mental health benefits can decrease health care costs, increase productivity, reduce absenteeism, and create a comparative advantage in the labor market.

The representatives included a psychiatrist and directors of employment assistance programs (EAPs), corporate health services, and human resources departments. Employers represented were Bank One, Delta Air Lines Inc., Eli Lilly and Company, Fannie Mae, Motorola, Puget Sound Energy, and an unidentified company.

The Center for Mental Health Services (CMHS) convened a one-day focus group meeting in November 1999 of these employer representatives as a follow-up to a multiyear project in which the Lewin Group, under contract with CMHS, developed case studies of the employers and of two HMOs and a managed behavioral health care organization.

Determination of “generous” involved several factors. The selected employers provide benefits that extend beyond the traditional annual limits of 30 inpatient days and 20 outpatient days. They place a high priority on mental health, provide a range of innovative and flexible benefits, and encourage employees to access mental health care.

Shelagh Smith, M.P.H., project officer and senior public health advisor in CMHS’s Office of Organization and Financing, said, “Even though the investment in mental health turned out to be a good business strategy, these employers decided to provide generous benefits because they share an employee-centered philosophy.” She pointed out that the companies also offer strong EAPs.

Focus group member Eliot Sorel, M.D., a psychiatrist who works for Fannie Mae, also emphasized the importance of corporate culture. He said, “Fannie Mae believes in the pursuit of excellence and works to attract the best employees. Good mental health benefits are viewed as a company asset.” Sorel meets with employees, makes referrals, advocates for them with managed care vendors, and advises management on vendor effectiveness and the impact of mental health issues on the workplace.

Sorel noted that he uses his position within the company to promote the integration of physical and mental health services. He said, “Many patients with mental illness are seen first by a primary care physician. We try to encourage primary care and psychiatric physicians to consider each case in a holistic fashion.” Sorel plans a fall workshop on the relationship between cardiac disease and depression as part of his efforts to show the links between mental and physical diseases.

Smith commented, “The companies studied work actively to overcome stigma associated with mental illness and encourage employees to use mental health benefits.” Apprehension that use of mental health benefits will adversely affect career prospects is one of the most significant barriers to securing help. Many of the companies offer self-referrals into the EAP or mental health provider network to alleviate that concern. Some employers even allow an employee to call the EAP and receive treatment without providing a name or proving eligibility.

These employer representatives believe that approximately 5 percent to 7 percent of total health care expenditures are needed to provide a comprehensive mental health benefit. “Our office estimates that the industry average is somewhere between 2 percent and 3 percent,” Smith pointed out.

Employers who want to offer generous mental health benefits face problems finding vendors who accept their philosophy toward mental illness. Focus group participants said that for administrative convenience, vendors offer traditional benefits packages that contain little mental health coverage and resist developing individualized benefit plans.

They suggested a number of techniques to encourage vendors to provide desired services. Participants have, for example, leveraged purchasing power through contracts with a few national vendors or by devoting administrative resources to smaller, customized regional plans. A long-range solution would be to educate more employers to request flexible or individualized benefits packages, so the packages become more widely available.

Focus group members called on the federal government to “support research to quantify the value of mental health benefits for employers.” Sorel said, “We should also consider the corollary of that idea. Look at what happens to costs for primary care and disability payments when mental health benefits are cut. A study reported in the September/October 1999 issue of Health Affairs found that when one large company cut mental health benefits, savings were offset by increases in primary care spending.”

For two years APA has also been active in building liaisons to the business community through a major initiative that shows corporate leaders how better mental health benefits for workers will improve the bottom line.

The reports, “Administering Generous Mental Health Benefits: Opinions of Employers” and “Comprehensive Mental Health Insurance Benefits: Case Studies” are posted on the Web at www.mentalhealth.org/cmhs/ManagedCare/index.htm. ▪