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Health Care Economics
Published Online: 21 June 2002

Parity Leads to Increased Use, Not Cost

Publication: Psychiatric News
Volume 37, Number 12
https://doi.org/10.1176/pn.37.12.0019
Does parity make a difference for those who need mental health and substance abuse treatment?
Samuel H. Zuvekas, Ph.D., Darrel A. Regier, M.D., Donald S. Rae, M.A., Agnes Rupp, Ph.D., and William E. Narrow, M.D., M.P.H., used this question to guide their examination of the impact of a state mental health parity mandate on a large employer group, which simultaneously introduced a managed behavioral health care carveout to manage benefits.
The short answer is that treatment prevalence rose almost 50 percent in the parity group, driven entirely by large increases in the number of people using outpatient treatment, according to a report in the May/June Health Affairs. The number of visits per patient did not change, suggesting that the carveout did not sharply limit access.
The authors noted, however, that the largest increases in treatment prevalence occurred two years after the benefit expansion. Economic theory suggests that benefit expansion should have led to an immediate increase in demand for treatment, but no change in subsequent years. In addition, the increase in treatment prevalence for the parity group was only marginally greater than for the control group.
The authors said that factors other than parity likely led to the increases in treatment prevalence. In fact, the carveout program might have promoted increased use, perhaps through better coordination and education efforts with specialists, primary care providers, and consumers.
But, the authors suggested, a comparison of their study results with those of other studies indicates that application of carveout technologies might have the effect of increasing use only in low-use groups and bringing high-use groups downward.
The health plan costs declined by 39 percent with the simultaneous implementation of a parity benefit and carveout for benefit management. All of the cost decreases came from treatment for children and adolescents, in the form of reduced inpatient use. The average length of stay declined from 25 days to nine days.
The authors could not conclude whether the declines resulted from the carveout’s curbing of inappropriate use or from restricting needed services.
Regier told Psychiatric News, “Since we now know costs can be controlled, future studies of parity implementation should examine how the expanded mental health benefits and management controls interact to affect issues of access and quality.”

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Psychiatric News
Volume 37 • Number 12 • June 21, 2002
Pages: 19

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Published online: 21 June 2002
Published in print: June 21, 2002

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