Where Should We Lead?
The Role of Psychiatrists in a ‘Reforming’ Public
and Private System
MARVIN SWARTZ, MD
PROFESSOR AND HEAD
SOCIAL AND COMMUNITY PSYCHIATRY
DIRECTOR, DUKE AHEC PROGRAM
DUKE UNIVERSITY SCHOOL OF MEDICINE
A Brief National and Local Context
 Rise then depopulation of the state hospital
 Promise and pitfalls of the community
mental health center movement
 Rise of behavioral health managed care
(carve-outs)
 NC mental health reforms
 Hopes for parity and health care reform
Dorothea Dix: Mission
to Establish Asylums
• Visited nearly every
state testifying to state
of mentally ill
• Spurred establishment
of many state hospitals
• Convinced Congress to
establish land grant for
mentally ill
Franklin Pierce Veto 1854
 Pierce vetoes a bill sponsored by Dorothea Dix
calling for the sale of federal lands to subsidize
institutions for indigents with mental disabilities:
“[I]f Congress has the power to make provision
for the indigent insane. . .it has the same
power to provide for the indigent who are not
insane, and thus to transfer to the Federal
Government the charge of all the poor in all
the States.... “
President Kennedy’s Message
“We must act to bestow the full benefits of our society to those who
suffer from mental disabilities; to prevent occurrence of mental
illness…wherever and whenever possible; to provide for early
diagnosis and continuous care in the community, of those suffering
from these disorders; to stimulate improvements in the level of care
given the mentally disabled in our State and private institutions, and
to reorient those programs to a community-centered approach; to
reduce, over a number of years and by hundreds of thousands, the
persons confined to these institutions; to retain in and return to, the
community the mentally ill… and there to restore and revitalize their
lives through better health programs and strengthened educational
and rehabilitation services…”
Kennedy, J.F., Message from the President of the United States
Relative to Mental Illness and Mental Retardation, Washington D.C.:
USGPO, 1963.
CMHC Movement
 Build out and growth in 1960s—serving catchment




areas of ~200,000
Initial direct federal funding
Hampered by lack of clear direction or consensus on
target populations
Hopes for dramatic re-vitalization during Carter
administration thwarted by Reagan defunding of
Mental Health Systems Act of 1980
Dwindling federal support and transition to
Medicaid
Advent of Behavioral Health Managed Care
 Late 1980s --Mental health care seen as open-ended
& discretionary (“worried well”).
 Co-incident rise of private psychiatric hospitals led to
unnecessary stays
 Specialized (carve-out) managed care companies
offered employers separately managed behavioral
health insurance plans.
 Many insurers chose to implement these carve out
plans—legally—due to lack of parity
Value of Private Behavioral Health
Benefits, 1988-1998 (NAPHS/Hays Group)
3000
$2527
2500
$2169
2000
$2372
$2099
General healthcare
Behavioral healthcare
1500
1000
6.2%
500
3.2%
$155
$70
0
1988
1998
.
Source: Substance Abuse and Mental Health Services Administration. (2011). National Expenditures for Mental Health
Services & Substance Abuse Treatment 1986-2005. Washington, DC. As cited in Kaiser Commission on Medicaid and
the Uninsured. (April 2011). Mental Health Financing in the United States: A Primer. Washington, DC.
Boyd et al: Clarifying Multimorbidity Patterns to Improve Targeting and Delivery of Clinical Services for Medicaid Populations
Center for Health Care Strategies, December, 2010.
Boyd et al: Clarifying Multimorbidity Patterns to Improve Targeting and Delivery of Clinical Services for Medicaid Populations
Center for Health Care Strategies, December, 2010.
Key Elements of State Plan
● Per state: Area Programs can not have dual
role as manager and provider of care
●
Area Programs supplanted by Local Management Entity
(LME)
● Divestiture: privatizes care from public to
private providers and directs LME to
develop provider networks.
● Eliminate 700 state hospital beds by 7/1/06
Total Operating State Hospital Beds
2000
1800
1755
1616
1600
1464
1400
1314
1176
1200
1180
1180
1180
1083
1000
924
944
850
800
600
400
200
0
Sum of 2001 Sum of 2002 Sum of 2003 Sum of 2004 Sum of 2005 Sum of 2006 Sum of 2007 Sum of 2008 Sum of 2009 Sum of 2010 Sum of 2011 Sum of 2012
Source: NC Division of MH/DD/SAS
Re-investment Strategy—“Medicaid it”
 State hospital admissions not Medicaid reimbursable
for adults ages 22-64 (IMD Exclusion).
 Reduction of State bed dollars can leverage Medicaid
community-based services ($1 state $3 Medicaid).
 BUT: Need existing community capacity to reduce
admissions—bridge funding needed.
 Early years--Downsizing savings not realized.
Reforming Reform (Perdue)
 Perdue administration attempts to restore medical
accountability—creates CABHAs (critical access
behavioral health agency)
 New Legislature very worried about Medicaid
shortfalls, potential expansion under ACA
 Mandated rapid expansion of Medicaid Managed
Carve-out Plan---1915b/c Waiver
 New challenges:


Must use substantial state dollars for DOJ settlement
What are implications of Mental Health Parity and Health
Reform?
Federal Parity Legislation: Background
 Wellstone and Domenici Mental Health Parity and
Addiction Equity Act (MHPAEA) enacted 10/3/2008
as part of ARRA
 Creates “Equal rights in health insurance”—ends
insurance discrimination
 Federal predecessor—Mental Health Parity Act of
1996




Eliminated differential annual or lifetime limits
Covered large group market, but not small groups or selfinsured plans
Excluded substance use disorders
No prescription benefit
MHPAEA Features
 Continues existing legal provisions—annual and
lifetime limits
 Applies to large group market and insurers



Including ERISA groups
State and local govt.
Medicaid managed care organizations (?)
 Adds substance use disorders to disorders protected
 Adds special rule for prescription drug benefits
 Does NOT cover: plans under 50 people, the
individual market and Medicare
Other MHPAEA Features
 Does not mandate mental health benefit coverage
 If MH covered, plan must comply for those benefits
 Opt out for state and local government self insured
plans
 Generally effective January 1, 2011
Federal Parity Rules issued 11/13
 Prohibit plans from imposing any different:
 Financial requirements (eg. Co-pays, deductibles)
 Treatment limitations
Quantitative Treatment Limitations (eg. 30 day
hospitalization)
 Non-quantitative Treatment Limitations (eg. utilization
review standards and processes, definitions of medical
necessity)
 “Requirements and limitations can not be any more
restrictive than the predominant ones applied to
substantially all the med/surg benefits within the same
benefits classification”

Health Care Reform (ACA) Features
 Integrates MH into reforming health system
 Adds preventive services/screening (eg. depression)
 Makes MH/SA treatment an essential benefit in health
exchange plans
 Increases access
 Medicaid expansion up to 133% of poverty
 Affordable private coverage through HI Exchanges
 Adds coverage through age 26 for dependents
 Eliminates pre-existing conditions
 BUT: eliminates Disproportionate Share Funding
Where Should We Focus?
• Staying at the table at policy forums
• Resisting marginalization in MCO and provider
•
•
•
•
•
•
•
organizations
Fighting for Parity
Advocating for Medicaid Expansion and sensible system
reform
Leading on MCO performance and quality metrics
Addressing Psychiatry workforce shortages and solutions
Leading clinical care redesign
Leading the efforts on Integrated care
Finding efficiencies—Medicaid formulary example
Will the MH/SA Workforce be
Adequate to Benefit and Enrollment
Expansion?
“IT IS DIFFICULT TO OVERSTATE
THE MAGNITUDE OF THE
WORKFORCE CRISIS IN
BEHAVIORAL HEALTH.”
--SAMHSA /ANNAPOLIS COALITION
Psychiatrist Full-Time Equivalents per 10,000 Population
North Carolina, 2004
Psychiatrist FTEs per 10,000 Population
(# of Counties)
0.99 to 10.27
0.60 to 0.98
0.33 to 0.59
0.01 to 0.32
No Psychiatrists
(18)
(20)
(18)
(27)
(17)
Total Psychiatrists = 1,061
Source: North Carolina Health Professions Data System, with data
derived from the North Carolina Medical Board, 2004; LINC, 2005.
Produced by: North Carolina Health Professions Data System and the
Southeast Regional Center for Health Workforce Studies, Cecil G. Sheps
Center for Health Services Research, University of North Carolina at Chapel Hill.
*Psychiatrists include active (or unknown activity status), instate, nonfederal,
non-resident-in-training physicians who indicate a primary specialty of psychiatry,
child psychiatry, psychoanalysis, psychosomatic med, addiction/chemical dependency,
forensic psychiatry, or geriatric psychiatry, and secondary specialties in psychiatry,
child psychiatry and forensic psychiatry.
Child Psychiatrist Full-Time Equivalents per 10,000 Child Population
North Carolina, 2004
Child Psychiatrist FTEs per 10,000 Child Population
(# of Counties)
5.0 to 10.3
(2)
2.0 to 4.9
(5)
1.0 to 1.9
(8)
Fewer than 1
(42)
No Child Psychiatrists (43)
Total Child Psychiatrists = 223
Source: North Carolina Health Professions Data System, with data
derived from the North Carolina Medical Board, 2004; LINC, 2005.
Produced by: North Carolina Health Professions Data System and the
Southeast Regional Center for Health Workforce Studies, Cecil G. Sheps
Center for Health Services Research, University of North Carolina at Chapel Hill.
*Child psychiatrists include active (or have unknown activity status), instate,
nonfederal, non-resident-in-training physicians who indicate a primary or secondary
specialty of child psychiatry. Child population includes children 18 and under.
The Nation’s Behavioral Health Workforce Crisis
(Annapolis Coalition)
 “Across the nation there is a high degree of concern about the
state of the behavioral health workforce and pessimism about
its future.
 There is equally compelling evidence of an anemic pipeline of
new recruits to meet the complex behavioral health needs of
the growing and increasingly diverse population in this country.
 It is difficult to overstate the magnitude of the workforce crisis
in behavioral health. The vast majority of resources dedicated
to helping individuals with mental health and substance use
problems are human resources, estimated at over 80% of all
expenditures. “
Workforce Training (Annapolis Coalition)
 “There is overwhelming evidence that the behavioral health
workforce is not equipped in skills or in numbers to respond
adequately to the changing needs of the American population.
 Most of the workforce lacks the array of skills needed to assess
and treat persons with co-occurring conditions.
 Training and education programs largely have ignored the need to
alter their curricula … and, thus, the nation continues to prepare
new members of the workforce who simply are underprepared
from the moment they complete their training.”
A Behavioral Health Workforce in Crisis
 The workforce issues encompass difficulties in:
 recruiting and retaining staff,
 the absence of career ladders for employees,
 marginal wages and benefits,
 limited access to relevant and effective training,
 the erosion of supervision,
 a vacuum with respect to future leaders,
 financing systems that place enormous burdens on the
workforce to meet high levels of demand with inadequate
resources.
How will NC respond to the workforce shortages?
Can NC Grow it’s Way Out of Psychiatry Shortages?
 GME (Residency) slots are capped at 1996 level—
can’t grow more
 Most of the counties with psychiatry shortages are
also primary care shortages!
 Need different models of care
 Calls for task-shifting and collaborative care type
models.
Provider Shortages, Care Re-design and Psychiatry
 In every health care reform scenario there is a




shortage of psychiatrists
If we can not grow our way out of psychiatry
manpower shortages—what remedies do we
propose?
What is our strategy for primary care?
Specialty mental health care?
What is the role of collaborative and team-based
care?
Gov. McCrory: Partnership for a Healthy NC
 New Legislature and Governor want Medicaid
budget predictability--“write a check for Medicaid”
 Propose a new wave of Medicaid reforms to control
costs and integrate general and behavioral health

Proposes 1115 Medicaid Waiver and 6(?)Regional
Comprehensive Care Entities
 Three key issues:
 Carve-in vs. carve-out
 Privatization
 Risk assumption
Whither “Reform?”
 Arguably—National trend is toward “carving-in” behavioral





health and strengthening primary care homes.
Community Care of NC—prime example of Enhanced
PCMH
Few states are currently moving ahead with pure carve-out
models for Medicaid Managed Care
How does “carving out” mental health care affect other
parts of the Medicaid program?
How does “carving in” address the highly specialized needs
of severely mentally ill patients?
Privatization can also be a failure—how are contracts
structured and effectively monitored by the state?
Source: Bob Atlas NC DHHS Consultant, November , 2013
Source: Bob Atlas NC DHHS Consultant, November ,2013
CAUTION: Tennessee's Failed Managed Care Program for Mental
Health and Substance Abuse Services
In July 1996, Tennessee initiated a managed mental health and substance abuse
program called TennCare Partners. This publicly funded "carve-out" experiment
started chaotically and soon deteriorated into a crisis. Many patients did not
receive care or lost continuity of care, and the traditional "safety net" mental health
system nearly disintegrated. This qualitative case study sought to ascertain the
impact of the TennCare Partners program. It points out that the program's
difficulties stemmed directly from a flawed design that spread funds previously
earmarked for severely mentally ill patients across the entire Medicaid population.
States contemplating similar reforms should strive to protect vulnerable patients by
risk-adjusting capitation payments and by focusing resources on care for severely
mentally ill persons. States should also minimize program complexity and ensure
the accountability of managed care networks for their patients' behavioral health
care needs.
Source: Chang et al, JAMA. 1998;279(11):864-869.
Adequate Administrative Capacity is Key to Realizing the Goal of
Running a High Performing Medicaid Program.
A state’s ability to make the most of the opportunities currently available
to it depends on its ability to effectively and efficiently manage its
program.
Administrative capacity includes at least three key elements: resources,
skills and systems.
During an economic downturn, when the need for a balanced budget
requires significant cuts, the Medicaid program can be an obvious
target, as a major portion of the state budget.
Often state legislatures will resist cutting services and the
administrative budget takes the deepest cut, with the impact of that cut
magnified by the reduced federal match: a $1 cut in state dollars results in a
$2 cut in the Medicaid agency’s administrative budget
.
Adequate Administrative Capacity is Key to Realizing the Goal of
Running a High Performing Medicaid Program.
In the midst of the most recent recession, staff furloughs have been a common
strategy for managing administrative funding reductions.
While these reductions have leveled off in recent years, increased investment
in funding and staffing Medicaid agencies has been limited. As a result of budget
cuts fewer staff members are available to carry a heavier burden. Timelines for
implementing ACA reforms has also increased demands on Medicaid program staff
Within the level of resources provided, state personnel and contracting requirements
can either support or impede the effective deployment of resources
Whether fulfilling its basic responsibilities for administering a Medicaid
program or retooling its operations to respond to new demands, a Medicaid agency
does not always have the discretion to hire needed staff
.
Adequate Administrative Capacity is Key to Realizing the Goal of
Running a High Performing Medicaid Program.
With these restrictions on hiring and procurement decisions, state
Medicaid programs must compete for sophisticated clinical, financial
and analytic expertise that can match that of the managed care
organizations and providers they are negotiating with yet they can rarely
pay what the private sector does.
In some cases, the state will opt to contract out for expertise, but the lack
of investment in in-house expertise can limit access and leave that
expertise vulnerable to contract renewals and negotiations. However,
even when a state contracts out for expertise, the state needs the staff
. capacity to oversee those contracts and consultants.
Adequate Administrative Capacity is Key to Realizing the Goal of
Running a High Performing Medicaid Program.
Unfortunately, the natural forces of the state budgeting process often
work against state investment in a Medicaid program’s administrative
capacity, at the same time that the complexity of managing a Medicaid
program has only increased over time.
Inadequate investment in Medicaid administrative capacity could undermine
a state’s ability to fulfill its responsibilities under federal and state law, as
well as its ability to achieve the most from this important program.
.
Critical Issues for Medicaid Managed Care
Implementation in NC
 DHHS and DMA will be very hard pressed to oversee
and monitor a new Managed Medicaid program.
 DHHS and DMA need resources, skills and systems
on staff—not among consultants to monitor new
vendors.
 Will need well developed contract/performance
management measurement.
 Should pilot approach in one region as we did with
PBH and 1915b/c waiver.
What is Psychiatry’s Role in
Performance and Outcomes
Measurement?
PSYCHIATRY’S ROLE IN
PRIORITY SETTING IN PUBLIC
AND PRIVATE MANAGED CARE
Purpose of measurement
Classifications of indicators
Accountability
Measure for Summative
presentation and
comparison
Performance
measurement
Quality
improvement
Structure
Process
Outcome
Setting of
care delivery
Activities
between
practitioner
and patient
Effectiveness
and
efficacy
Measure for
improvement
Performance
management
Measure to predict
effect of management
interventions
Source: Baars et al, Int J Health Palnn Mgmt 2012; 25: 200. DOI: 10.1002/hpm
Stewardship of the
Formulary
OPPORTUNITIES FOR
PSYCHIATRISTS TO OFFER
VALUE TO PUBLIC AND
PRIVATE HEALTH PLANS
.
Source: Substance Abuse and Mental Health Services Administration. (2011). National Expenditures for Mental Health Services & Substance
Abuse Treatment 1986-2005. Washington, DC. As cited in Kaiser Commission on Medicaid and the Uninsured. (April 2011). Mental Health
Financing in the United States: A Primer. Washington, DC.
Stewardship of the Formularies
 Psychiatrists do have
considerable expertise in
use of psychotropics
 Considerable opportunity
for improvement
 High use in Medicaid
formulary
 Opportunities for savings
 Most psychotropic meds provided by
non-psychiatrists
Where Should We Focus?
• Staying at the table at policy forums
• Resisting marginalization in MCO and provider
•
•
•
•
•
•
•
organizations
Fighting for Parity
Advocating for Medicaid Expansion and sensible system
reform
Leading on MCO performance and quality metrics
Addressing Psychiatry workforce shortages and solutions
Leading clinical care redesign
Leading the efforts on Integrated care
Finding efficiencies—Medicaid formulary example
STAY TUNED!
THANKS!