Financial Incentives Influencing the Integration of Mental Health Care and Primary Care
Abstract
Psychiatric problems are common in general medical practice and strongly influence utilization of medical care. Although several studies have demonstrated the positive clinical and financial impact of psychiatric interventions for medical patients, historic and economic forces have tended to maintain the separation of the primary health and mental health components of care. The author discusses the financial incentives that influence the success or failure of initiatives to integrate mental health care and primary care. Most models for financing care that use fee-for-service, carve-out, or capitated arrangements have done little to encourage collaborative treatment planning and coordination of care or have created conditions that work against such integration. True financial incentives for integration of psychiatric and primary health care are provided only by a shared-risk model of capitation—a model that has long existed in staff-model health maintenance organizations. This model increases motivation to lower overall utilization of care, improve patients' overall health status, and search for more effective models of care.
Although psychiatric problems are prominent in general medical care, psychiatry and primary care medicine, for the most part, are not integrated. This separation has been created and maintained by several factors including medical specialization, a prevailing model of mind-body dualism, differences in languages and practice styles, and the stigma of mental illness. More recently, the gap separating psychiatry from primary care has been further widened as a result of mental health "carve-out" insurance plans that finance mental health services separately from general medical benefits in an effort to control costs.
Mental health carve-out plans have resulted in some short-term cost reduction, but often by limitation in benefits. Carve-out plans also reinforce the separation of psychiatry from the rest of medicine. This separation poorly serves the majority of patients with mental health problems who receive a large proportion of their care in the general medical sector rather than in the mental health sector (1,2). Patients with mental disorders constitute 5 to 20 percent of general medical patients and are one and a half to two times as likely to visit a medical setting as are patients without those disorders (3,4). However, there is a significant lack of attention to mental disorders in general practice, and most cases are poorly recognized or undertreated (5,6,7,8,9,10).
Psychiatric problems have a significant impact on the presentation and course of many medical symptoms and disorders (11). Depression is a common problem, with an estimated prevalence of 12 percent in primary care practices (12). Furthermore, depression has been shown to adversely affect the course of patients with a variety of medical disorders (13,14). Both generalized anxiety disorder and panic disorder are common among patients treated in medical practice and often present as somatic symptoms that may lead to ongoing medical interventions (15,16). Tobacco, drug, and alcohol use are associated with significant health care costs and are often treated inadequately despite good evidence that a positive medical cost offset can be obtained from their treatment, particularly from treatment of alcoholism (17,18).
Despite the prevalence and impact of behavioral problems, few primary care programs are tightly coupled to psychiatry programs. Most primary care physicians are frustrated when they attempt to refer patients to the mental health sector or attempt to integrate their care with mental health care. Despite growing economic evidence of the value of integration, financial incentives maintain the gap, and these incentives continue to deter efforts to create more integrated care models. To overcome this gap providers must believe in the value of integration, but, more important, payers must initiate shifts in financial incentives to promote change in practice among providers. This paper discusses the financial incentives that influence efforts to integrate psychiatric care and primary care.
Varieties of incentives
In daily practice, physicians face forces that are intended to modify treatment based on payment (19). By examining the financial incentives that operate in a variety of practice scenarios, providers can more effectively analyze the barriers to integration and understand the need for new fiscal structures to meet new opportunities.
Table 1 summarizes the major reimbursement conditions that govern clinical practice. The combinations of conditions linking psychiatry and primary care determine the forms that clinical services take or maintain.
Two major reimbursement conditions have governed much of mental health care. Under the first condition, coverage of mental health care is carved out from coverage of primary health care, mental health care is usually managed through utilization review, and clinicians are paid on a fee-for-service basis. Under the second condition, coverage of mental health care is carved out, and care is managed through utilization review, but payment to clinicians involves some type of capitation or risk-sharing arrangement.
Similarly, two major reimbursement conditions have governed primary care practice. Under the first condition, primary care is paid for on a fee-for-service basis with varying amounts of utilization review. Under the second condition, payment for primary care involves some type of risk-sharing arrangement.
Less common is a third type of reimbursement in which both mental health care and primary health care participate in a shared-risk arrangement. This arrangement is the only current model that provides incentives for integrating psychiatric care and primary health care.
Traditional reimbursement
The combination of the first reimbursement condition governing mental health care and the first condition governing primary care represents the pairing of "traditional" incentives. Psychiatrists operate within a fee-for-service model. Because high volume is rewarded, psychiatrists do what they can to build and maintain referrals through personal contacts, quality initiatives (improving accessibility and communication), or a more flexible approach to practice (moving locations or changing office hours).
The primary care providers also have an incentive to build business volume. Therefore, they are likely to refer patients to psychiatry only if such referrals increase their throughput of patients. Such primary care providers may refer time-consuming cases, problem cases, or cases with problematic insurance coverage. Some primary care providers find that a close relationship with psychiatry improves the perceived value of their practice. Some patients value the collaboration, and staff may feel less frustration finding and making referrals. Some primary care providers take pride in establishing an informal integrated model of care and believe that such services improve patient outcomes.
However, apart from the values of individual physicians, no incentives are built into the payment system for identifying cases that could benefit from integrated care. In almost all cases, the extra time and effort required to create integration are not reimbursed. Collaborative treatment planning and coordination coded in the Current Procedural Terminology rarely triggers payment. Furthermore, most programs have lacked the information systems to target patients with a history of high utilization of services or suboptimal outcomes who might benefit from integrated care.
In general, under these reimbursement conditions, primary care providers complain that they cannot find a psychiatrist to whom patients can be referred or cannot easily make an appointment with one and that they often do not hear back from the psychiatrist about the outcome of the referral. Psychiatrists who are already busy have little incentive to spend extra time communicating with a primary care provider. In the overall health care plan, utilization management, if it occurs, is external to the providers and consists of containment by preauthorization and concurrent review, with excessive dependence on denial of care.
Mental health carve-out plans
When mental health care is carved out but psychiatrists continue to receive fee-for-service payment and primary care is capitated, psychiatry continues to have the incentives related to fee-for-service payment that were described in the preceding section. However, primary care providers under capitation have a clearer incentive to identify and move high utilizers out of their practices into the mental health sector. Psychiatry, with fee-for-service payment, does not mind receiving such referrals, assuming they come with insurance coverage and have not exceeded their annual or lifetimes limits for mental health care.
For the overall health care plan, such shifting of patients from primary care to mental health may result in more efficient and effective psychiatric treatment for some patients (20). At the same time, the overall plan may become concerned about any systematic attempts to identify and refer psychiatric cases, because such increased case identification could increase overall costs. Besides concurrent review mechanisms, the overall plan will employ benefit limits as well as increased copayments and deductibles to discourage utilization. Plans will have little incentive to systematically identify psychiatric cases or to try to detect underutilization of psychiatric services.
Capitated mental health care
When mental health care is carved out and capitated and primary care is reimbursed on a fee-for-service basis, the situation dramatically changes for the psychiatrists. This combination of reimbursement conditions is common because mental health benefits have been shifted into alternative financial models earlier than general medical benefits. Primary care providers continue to have fee-for-service incentives while psychiatrists labor under a system involving capitation that forces them to reconsider their incentives.
Under capitation, psychiatrists must manage a population within a limited amount of money. They no longer have the incentive to build business volume. They become ambivalent about building bridges with primary care providers because of concern that the primary care providers will start to identify and refer more cases, thus cost-shifting cases out of the medical benefit into the mental health capitated budget.
At the same time, psychiatry must also be concerned that inadequate treatment of psychiatric disorders by primary care providers may bring patients who are more severely ill, and therefore more expensive to treat, when referrals do take place. For example, a primary care provider may unsuccessfully treat a severely depressed patient for several months and refer the patient only after the emergence of a psychotic component requiring a hospitalization, which could have been prevented by more effective earlier treatment.
Because primary care providers treat a population of patients with a variety of insurance arrangements, psychiatrists also face the dilemma of wanting to discourage some referrals and encourage others. The psychiatrist who discourages referrals because of a capitation issue thus faces the probability that the primary care provider's fee-for-service business will go also elsewhere. The incentive for the overall plan would be to shift business (and risk) into the mental health sector, because the dollars at risk there are capped and predetermined no matter how much care is provided. Once the mental health sector has a capitation system, insurance plans would tend to become interested in new initiatives to educate primary care providers and new ways to "reduce" inappropriate prescribing of psychotropic medication by primary care providers.
Separate capitation
When mental health care is carved out and mental health care and primary care are separately capitated, the most intense cost-shifting tensions emerge. Psychiatrists have the incentive to limit referrals, but this incentive is tempered by the possibility that more severely ill patients may be referred at a later stage of illness. Primary care providers have the incentive to shift care into the mental health sector. Psychiatrists who had previously been strong proponents of primary care screening and referral of mental health problems now feel that their medical colleagues are perfectly capable of providing mental health care. After all, many psychiatric interventions help control medical benefit expenditures more than expenditures for psychiatric problems.
Under separate capitation, both parties become acutely aware of spending under their capitation budgets, and collaboration becomes the victim. Separate capitation is, therefore, inherently unstable and should lead psychiatrists and primary care providers to discuss the possibility of shared capitation, under which true integration of mental health care and primary health care can develop.
Shared-risk model
Shared capitation—in which mental health care and primary health care share common capitation and risk—is the only model that provides true financial incentives for integration of care. The incentives of both sides are aligned in a shared motivation to lower overall utilization, improve patients' overall health status, and search for more effective integrated care models. Integration with financial risk sharing can be approached from either a global or a selective perspective. In the global perspective, mental health and primary care allocations are combined with common provider payment withholds and incentives based on the total performance of the integrated care system. In the selective perspective, costs for subgroups of patients with histories of high utilization of services are identified, and gain-sharing is based on exceeding specified performance targets.
Discussion and conclusions
Primary care providers often do not have the time, training, or incentive to provide necessary components of behavioral health care. Depressed patients in the primary care setting receive some counseling in less than 50 percent of cases, and less than 10 percent are referred to mental health specialists (21). The specialty-oriented, fee-for-service system of the past has reinforced neglect of psychiatric problems through poor reimbursement for psychiatric codes and incentives to pursue medical diagnostic testing. For example, patients with medically unexplained symptoms often receive repeated medical testing before consideration of whether an underlying depression or anxiety disorder could account for the symptoms. A shared-risk model avoids cost-shifting battles and creates new incentives that reward recognition and treatment of behavioral problems that would otherwise lead to more extensive utilization of primary health care or psychiatric care.
Psychiatric problems affect resource utilization through increased length of stay (22,23) and problems in long-term recovery (24,25,26,27). In general, however, psychiatric comorbidities are not recognized and are poorly documented (28,29). Psychiatric consultation for medical inpatients with psychiatric complications has been shown to produce a positive cost offset (30,31) and can improve the effectiveness of treatment (32,33,34). Although a growing body of evidence suggests that psychiatric treatment can reduce outpatient (and inpatient) medical utilization (35), more randomized prospective trials of psychiatric interventions for medical outpatients are clearly needed (36).
The large numbers of psychiatric problems among patients in primary care will require some shifting in the allocation of financial resources. Only about 2 to 4 percent of overall medical expenditures are now accounted for by expenditures in the mental health sector outside the primary care setting (37). However, it is estimated that another comparable amount is spent on mental health care within the general medical sector, and that beyond that amount, $81 million is spent on the medical symptoms resulting from behavioral health disorders (38). These dollars can be used more efficiently if care is integrated (39,40). New efficiencies will emerge from elimination of unnecessary interventions, shifts in utilization of primary health care, and savings from lowering duplicative administrative costs.
The shared-risk model has existed for years in staff-model HMOs. These organizations have the opportunity to think in terms of overall costs and also have a captive (employed) provider group for whom care management standards can more easily be promulgated and monitored. Nevertheless, such organizations usually operate by limiting mental health services utilization, with little effort to create cross-discipline interventions. These interventions—for example, those reported by Katon and associates (41) involving intervention with high utilizers—seem limited to a small number of programs with academic interests. The barriers that remain include the prevailing dualistic model of illness, lack of educational attention, the stigma of mental illness, and the separate cultures of psychiatry and general medicine (42).
Besides the long-standing barriers to integration, financial pressures are now making every provider wary of further decreases in the pool of patient care dollars. Primary care providers will be wary of losing potential reimbursement to increased mental health services unless they feel they can benefit from the cost savings in utilization of primary health care. The groups that control mental health dollars tend to protect their shrinking pool of dollars rather than face the unknown of collaboration with primary care. These struggles contain the opportunity for a renewed recognition of the interaction of the physical and mental life of patients and the need for a reintegration of care. This impulse to address the mind-body connection more effectively is probably part of the impetus behind the recent explosion of interest in alternative medicine. Finally, although research into cost-benefit results is likely to be a strong driving force, it is also important to consider the integration of psychiatry and medicine because it addresses patients' problems most comprehensively and sensibly.
Acknowledgment
The author thanks Joel Kaufman, M.D., for comments on the manuscript.
Footnote
Dr. Goldberg is professor of psychiatry and medicine at Brown University and psychiatrist-in-chief at Rhode Island Hospital and Miriam Hospital in Providence, Rhode Island. Address correspondence to him at the Department of Psychiatry, Rhode Island Hospital, 595 Eddy Street, Providence, Rhode Island 02903 (e-mail, [email protected]).
References
1.
Regier DA, Narrow WE, Rae DS, et al: The de facto US mental and addictive disorders service system. Archives of General Psychiatry 50:85-94, 1993
2.
Schurman RA, Kramer PD, Mitchell JB: The hidden mental health network: treatment of mental illness by nonpsychiatrist physicians. Archives of General Psychiatry 42:89-94, 1985
3.
Narrow WE, Regier DA, Rae DS, et al: Use of services by persons with mental and addictive disorders. Archives of General Psychiatry 50:95-107, 1993
4.
Houpt JL, Orleans CS, George LK, et al: The role of psychiatric and behavioral factors in the practice of medicine. American Journal of Psychiatry 137:37-47, 1980
5.
Ormel J, van den Brink W, Koeter MWJ, et al: Recognition, management, and outcome of psychological disorders in primary care: a naturalistic follow-up study. Psychological Medicine 20:909-923, 1990
6.
Von Korff M, Shapiro S, Burke JD, et al: Anxiety and depression in a primary care clinic: comparison of diagnostic interview schedule, general health questionnaire, and practitioner assessments. Archives of General Psychiatry 44:152-156, 1987
7.
Borus JF, Howes MJ, Devins NP, et al: Primary health care providers' recognition and diagnosis of mental disorders in their patients. General Hospital Psychiatry 10:317-321, 1988
8.
Cyr MG, Wartman SA: The effectiveness of routine screening questions in the detection of alcoholism. JAMA 259:51-59, 1988
9.
Rosenberg M, Commerford K, Driever M: Identification of psychosocial distress: a comparison of internal medicine and family medicine residents. Journal of General Internal Medicine 6:529-534, 1991
10.
Callahan CM, Nienaber NA, Hendrie HC: Depression of elderly outpatients: primary care physicians' attitudes and practice patterns. Journal of General Internal Medicine 7:26-31, 1992
11.
Goldberg RJ: Integrating Behavioral Health Services With General Medical Care. Providence, RI, Manisses, 1996
12.
Spitzer RL, Williams JB, Kroenke K, et al: Utility of a new procedure for diagnosing mental disorders in primary care. JAMA 272:1749-1756, 1994
13.
Wells KB, Golding JM, Burnam MA: Affective, substance use, and anxiety disorders in persons with arthritis, diabetes, heart disease, high blood pressure, or chronic lung conditions. General Hospital Psychiatry 11:320-327, 1989
14.
Musselman DL, Evans DL, Nemeroff CB: The relationship of depression to cardiovascular disease. Archives of General Psychiatry 55:580-592, 1998
15.
Ballenger JC: Panic disorder in the medical setting. Journal of Clinical Psychiatry 58(suppl 20):13-17, 1997
16.
Rickels K, Schweizer E: The clinical presentation of generalized anxiety in primary care settings: practical concepts of classification and management. Journal of Clinical Psychiatry 58(suppl 2):4-10, 1997
17.
Holder HD, Blose JO: The reduction of health care costs associated with alcoholism treatment: a 14-year longitudinal study. Journal of Studies on Alcohol 53:293-302, 1992
18.
Hoffman NG, DeHart SS, Fulkerson JA: Medical care utilization as a function of recovery status following chemical addictions treatment. Journal of Addictive Diseases 12:97-108, 1993
19.
Kassirer JP: Managed care and the morality of the marketplace. New England Journal of Medicine 333:50-52, 1995
20.
Katon W, Von Korff M, Lin E, et al: Collaborative management to achieve treatment guidelines: impact on depression in primary care. JAMA 273:1026-1031, 1995
21.
Rogers WH, Wells KB, Meredith LS, et al: Outcomes for adult patients with depression under prepaid or fee-for-service financing. Archives of General Psychiatry 50:517-525, 1993
22.
Fulop G, Strain JJ, Fahs MC, et al: Medical disorders associated with psychiatric comorbidity and prolonged hospital stay. Hospital and Community Psychiatry 40:80-82, 1989
23.
Verbosky LA, Franco KN, Zrull JP: The relationship between depression and length of stay in the general hospital patient. Journal of Clinical Psychiatry 4:177-181, 1993
24.
Wells KB, Stewart A, Hays RD, et al: The functioning and well-being of depressed patients: results from the Medical Outcomes Study. JAMA 262:914-919, 1989
25.
Broadhead WE, Blazer DG, George LK, et al: Depression, disability days, and days lost from work in a prospective epidemiologic survey. JAMA 264:2524-2528, 1990
26.
Rovner BW, German PS, Brant LJ, et al: Depression and mortality in nursing homes. JAMA 265:993-996, 1991
27.
Silverstone PH: Depression increases mortality and morbidity in acute life-threatening medical illness. Journal of Psychosomatic Research 34:651-657, 1990
28.
Fulop G, Strain JJ: Diagnosis and treatment of psychiatric disorders in medically ill inpatients. Hospital and Community Psychiatry 42:389-394, 1991
29.
Goldberg RJ, Daly J, Golinger RC: The impact of psychiatric co-morbidity on Medicare reimbursement for inpatient medical services. General Hospital Psychiatry 16:16-19, 1994
30.
Strain JJ, Lyons JS, Hammer JS, et al: Cost offset from a psychiatric consultation-liaison intervention with elderly hip fracture patients. American Journal of Psychiatry 148:1044-1049, 1991
31.
Lyons JS, Larson DB, Burns BJ, et al: Psychiatric co-morbidities and patients with head and spinal cord trauma: effects on acute hospital care. General Hospital Psychiatry 10:292-297, 1988
32.
Levenson JL, Hamer RM, Rossiter LF: Relation of psychopathology in general medical inpatients to use and cost of services. American Journal of Psychiatry 147:1498-1503, 1990
33.
Lyons JS, Hammer JS, Strain JJ, et al: The timing of psychiatric consultation in the general hospital and length of hospital stay. General Hospital Psychiatry 8:159-162, 1986
34.
Burton R, Lyons JS, Devens M, et al: Substance abuse consultations in the general hospital. General Hospital Psychiatry 13:83-87, 1991
35.
Slay JD, Glazer WM: "Carving in," and keeping in, mental health care in the managed care setting. Psychiatric Services 46:1119-1125, 1995
36.
Borus JF, Olendzki MC, Kessler L, et al: The "offset effect" of mental health treatment on ambulatory medical care utilization and charges. Archives of General Psychiatry 42:573-580, 1985
37.
Rice DP, Kelman S, Miller LS: The economic burden of mental illness. Hospital and Community Psychiatry 43:1227-1232, 1992
38.
Cost of Addictive and Mental Disorders and Effectiveness of Treatment. Report 1995-PHDG78. Washington, DC, US Public Health Service, Substance Abuse and Mental Health Services Administration, 1995
39.
Wells KB: Caring for depression in primary care: defining and illustrating the policy context. Journal of Clinical Psychiatry 58 (suppl 1):24-27, 1997
40.
Simon G, Ormel J, VonKorff M, et al: Health care costs associated with depressive and anxiety disorders in primary care. American Journal of Psychiatry 152:352-357, 1995
41.
Katon W, VonKorff M, Lin E, et al: A randomized trial of psychiatric consultation with distressed high utilizers. General Hospital Psychiatry 14:86-98, 1992
42.
Goldberg RJ: Psychiatry and the practice of medicine: the need to integrate psychiatry into comprehensive medical care. Southern Medical Journal 88:260-267, 1995
Information & Authors
Information
Published In
History
Published online: 1 August 1999
Published in print: August 1999
Authors
Metrics & Citations
Metrics
Citations
Export Citations
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.
For more information or tips please see 'Downloading to a citation manager' in the Help menu.
View Options
View options
PDF/EPUB
View PDF/EPUBGet Access
Login options
Already a subscriber? Access your subscription through your login credentials or your institution for full access to this article.
Personal login Institutional Login Open Athens loginNot a subscriber?
PsychiatryOnline subscription options offer access to the DSM-5-TR® library, books, journals, CME, and patient resources. This all-in-one virtual library provides psychiatrists and mental health professionals with key resources for diagnosis, treatment, research, and professional development.
Need more help? PsychiatryOnline Customer Service may be reached by emailing [email protected] or by calling 800-368-5777 (in the U.S.) or 703-907-7322 (outside the U.S.).