Do physicians who diagnose more mental health disorders generate lower health care costs?

BACKGROUND Underrecognition and undertreatment of mental health disorders i n primary care have been associated with poor health outcomes and increased health care costs, but little is known about the impact of tho diagnoses o f mental health disorders on health care expenditures or outcomes, Our goal was to examine the relationships between the proportion of mental health d iagnoses by primary care physicians and both health care expenditures and t he risk of avoidable hospitalizations. METHODS We used cross-sectional analyses of claims data from an independent practice association-style (IPA) managed care organization in Rochester, N ew York, in 1995, The sample was made up of the 457 primary care physicians in die IPA and the 243,000 adult patients assigned to their panels. We loo ked at total expenditures per panel member per year generated by each prima ry care physician and avoidable hospitalizations among their patients. RESULTS After adjustment for case mix, physicians who recorded a greater pr oportion of mental health diagnoses generated significantly lower per panel member expenditures. For physicians in the highest quartile of recording m ental health diagnoses, expenditures were 9% lower than those of physicians in the lowest quartile (95% confidence interval, 5%-13%). There was a tren d (P = .051) for patients of physicians in the highest quartile of recordin g mental health diagnoses to br: at lower risk for an avoid-able hospitaliz ation than those of physicians in the lowest quartile, CONCLUSIONS Primary care physicians with higher proportions of recorded men tal health diagnoses generate significantly lower panel member costs, and t heir patients may be less likely to bt: admitted for avoidable hospitalizat ion conditions.