(Alexandria, VA, July 15, 1998) "Managed care is a two-edged sword," said NMHA President and CEO Michael Faenza. "On the one hand, it makes true mental health parity cheap. On the other hand, managed care firms can reduce costs by limiting access to mental health services. With appropriately managed care, we can end insurance discrimination against people with mental illness, lower total health care costs, and improve mental health care quality and access."
A new report to Congress from the National Institute of Mental Health concludes that treating mental disorders like physical disorders--mental health parity--might increase mental health costs by 1 percent while reducing total health costs by up to 50 percent.
"Mental health parity makes good economic sense and it is sound social policy," Faenza said. "More and more research shows a clear link from mental health problems to physical health problems and substance abuse disorders. Treating them all equally and aggressively can reduce future health costs and other social costs due to incarcerations, welfare and homelessness."
The NIMH report reveals that the economic scare tactics used by members of the business community in their opposition to mental health parity are deeply flawed because they are based on dated fee-for-service actuarial models.
In developing its report, NIMH used more recent data from states that have implemented parity:
-- In Maryland, parity resulted in an increase of less than 1 percent in total insurance premiums
-- In North Carolina, mental health costs for state employees dropped 32 percent after parity
-- In Texas, parity for state employees resulted in a net reduction in mental health costs All three states employed managed care in their implementation of parity.
"Implementing mental health parity and improving managed care can be a win-win for businesses and people with mental illnesses," Faenza said.
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