ACADEMIC PSYCHIATRY AND MANAGED CARE - A CASE-STUDY

An academic department of psychiatry in New York City eliminated the n eed for behavioral managed care intermediaries by transforming itself from a fee-for-service system to a system able to engage in full-risk capitation contracts. The first step was to require health maintenance organizations to contract directly with the department. The departmen t formed two legal entities, a behavioral management services organiza tion for utilization management and a behavioral integrated provider a ssociation. The authors describe these entities and review the first y ear of operation, presenting data on enrollees, capitation rates, and service utilization for the first three contracts. The fundamental dif ferences in the treatment model under managed care and under a fee-for -service system are highlighted. The authors conclude that by contract ing directly with insurers on a full-risk capitation basis, department s of psychiatry will be better able to face the economic threats posed by the cost constraints inherent in managed care and maintain or re-e stablish their autonomy as care managers as well as high-quality care providers.