Managed care and children's behavioral health services in Massachusetts

Objective: The authors investigated changes in treatment patterns and costs of care for children after the implementation of the Massachusetts Medicai d carve-out managed care plan. Methods: The authors hypothesized that after the introduction of managed care, per-child expenditures would be reduced, continuity of care would not improve, and per-child mental health expendit ures would undergo larger reductions for disabled children, compared with c hildren enrolled in the Aid to Families With Dependent Children program. Us ing data from Medicaid and the Massachusetts Department of Mental Health, t he authors studied 16,864 Massachusetts Medicaid beneficiaries aged one to 17 years for whom reimbursement claims were submitted for psychiatric or su bstance use disorder treatment at least once during the two years before th e introduction of managed care (1991 to 1992) or during the two years after ward (1994 to 1995). Multivariate analysis was used to estimate changes in probability of admission, and, among patients admitted, to identify factors accounting for variation in length of stay. To assess the variation in exp enditures, we regressed the same variables, using the natural logarithm fun ction to transform total mental health expenditures data and inpatient expe nditures data to reduce skewness. Results: After the introduction of manage d care, per-child expenditures were lower, especially for disabled children , and the Department of Mental Health was used as a safety net for the most seriously ill children without increasing state expenditures. Continuity o f care appeared to decline for disabled children. Conclusions: It is likely that a combination of factors related to the reported changes in patterns of care and expenditures were responsible for the overall per-child expendi tures.