HOW WELL DO AMBULATORY CARE GROUPS PREDICT EXPENDITURES ON MENTAL-HEALTH AND SUBSTANCE-ABUSE PATIENTS

This paper evaluates the ability of Ambulatory Care Groups (ACGs) to p rospectively predict mental health and substance abuse expenditures an d total health care expenditures of persons enrolled in the New Hampsh ire Medicaid Program during fiscal years 1993 and 1994. A series of mu lti-part models is estimated separately for adults and children and a synthetic R-squared and the mean absolute predictive error are calcula ted. The results show that with the exception of predicting total expe nditures for children, ACGs do not perform as well as simple models co ntaining various demographic and prior mental health/substance abuse u tilization measures.