Department of Psychiatry, Harvard Medical School, Massachusetts Mental. Health Center, 74 .... sions, fewer high school graduates, more homeless patients, and more patients with a ..... state is the major employer, or there may be strong union ... Herz MI, Endicott J, Spitzer R: Briefhospitalization of patients with families: ...
Containing Mental Health Treatment Costs through Program Design: A Massachusetts Study BARBARA DICKEY, PHD, PAUL R. BINNER, PHD, STEPHEN LEFF, PHD, MARY K. UYEDA, MARK J. SCHLESINGER, PHD, AND JON E. GUDEMAN, MD Abstract: A single site pre-post study of seriously mentally ill patients treated in a public mental health system shows that annual treatment costs can be substantially reduced with the use of day hospital treatment. Two cohorts of psychiatric patients-282 consecutive admissions to a traditional public inpatient unit in 1980, and 340 consecutive admissions to a combination of inpatient and day hospital care in 1984-were followed 12 months after admission. The substitution of the day hospital is made possible because the facility provided a dormitory residence for those who could not go home at
Itntroduction
After almost a decade of cost increases that have
outstripped inflation, cost containment remains a primary concern of health policymakers. Cost reductions, may be gained by reducing essential services or eliminating the "fat" in the system.' The possibility that quality of care will suffer thus lies at the heart of the questions about the trade-offs between provision of services and cost-effectiveness in any prospective payment system. Another approach to cost containment is to redesign the delivery of services without sacrificing their scope or access to care. This report evaluates one such effort to restructure services in a public system of mental health care and measures effect of the change on costs, access and distribution of services. Studies have shown that less intensive care, such as day hospitalization, is at least as effective for seriously ill psychiatric patients as open-ended inpatient stays.210 With the introduction of day programs into the array of treatment modalities offered, mental health policymakers have assumed that resources would flow naturally from expensive inpatient care to less expensive, community-based care. In fact, the anticipated shift in services does not necessarily occur. Many state systems operate within a fixed budget allocation, yet for the most part they have been slow to shift resources from inpatient care to alternative services. Patterns of service delivery seem to be so entrenched that they drive the public system as much as financial payment mechanisms do. Thus, structural issues must be addressed as part of the effort to shift resources from inpatient hospitalization to alternative care. A chance to reconsider these issues occurred when a state mental health facility was restructured to substitute day Address reprint requests to Barbara Dickey, PhD, Assistant Professor, Department of Psychiatry, Harvard Medical School, Massachusetts Mental Health Center, 74 Fenwood Road, Boston, MA 12005. Dr. Binner is with the Missouri Institute of Psychiatry, St. Louis; Dr. Leff is with the Human Service Research Institute, Cambridge, MA; Ms. Uyeda is with the National Association of Counties, Washington, DC; Dr. Schlesinger is with the Kennedy School of Government, Harvard University, Cambridge; and Dr. Gudeman is
with the Medical College of Wisconsin, Milwaukee. This paper, submitted to the Journal February 16, 1988, was revised and accepted for publication September 28, 1988. C 1989 American Journal of Public Health 0090-0036/89$1.50
AJPH July 1989, Vol. 79, No. 7
night. Cost savings per hospital episode are about 31 per cent when the additional costs of day hospital and residence are considered. Cost shifting from inpatient to residential sites is noted, but overall mean annual costs, when all other treatment
(including additional
admissions), residential and family costs were included, are reduced. Readmission rates did not rise. The generalizability of the findings is limited to public mental health centers and state hospitals. (Am J Public Health 1989; 79:863-867.)
hospitalization and domiciliary care for all patients presenting for inpatient hospitalization. Earlier published reports""2 showed the program as both clinically effective and less costly. These early reports used cross-sectional data drawn from the institutional archives; the analyses were limited, as a consequence, to univariate statistical tests of difference, comparing different patients in treatment at several points in time. A decrease in nursing expenses was documented, but the reports did not address cost shifting. This report will address three questions: * Can day hospitalization and other ambulatory care decrease the per patient cost of care for inpatient treatment? * If the average cost and length of stay are reduced, what is the effect on selected aspects of care, such as the readmission rate or the use of seclusion? * If the average annual costs per patient for intensive inpatient care are reduced through the substitution of lower cost alternatives, to what extent will costs be shifted to ambulatory and residential care? To families?
Methods The Setting The Massachusetts Mental Health Center is a publicly funded community mental health center serving a racially and economically mixed urban catchment area of 200,000 people. The Center provides a comprehensive range of services, including acute inpatient and long-term care, outpatient and other ambulatory treatment, and community residences. The catchment area system does not have a state hospital to which the Center can transfer patients with chronic severe mental illness. Such patients are treated at the Center, receiving the ambulatory or inpatient service that best fits their needs. The Center receives an annual allocation from the state legislature and is expected to serve (at a minimum) all the poor within the catchment area. In fiscal year 1982, patient services at the Center were reorganized to substitute day hospitalization for inpatient care. The number of inpatient beds was reduced from 100 to 35. A 40-bed dormitory called the "Inn" was made available to day hospital patients in need of temporary housing. The amount and availability of community-based ambulatory services and residential beds remained virtually the same. The reorganization of services is described in detail 863
DICKEY, ET AL
elsewhere.1",2 The Center has available 17.5 inpatient beds per 100,000 population, which is far below the national rate of 61.3 per 100,000 for state and county mental hospitals.'3 Residential beds within the catchment area system have remained about the same at 45 per 100,000. The area has an active aftercare and case-management program for discharged patients. Study Design We compared service utilization costs for one year from the index admission for two cohorts of patients treated at the Massachusetts Mental Health Center: one cohort was treated before (fiscal year 1980) and one after (fiscal year 1984) the restructuring of services and reduction of inpatient beds. Consecutive admissions in 1980 and in 1984 included individuals sent by the court for observation and competency evaluations, admissions from civil or criminal commitments, individuals transferred from other private or public hospitals, and persons who had no catchment area assignment but were referred by local authorities. Both cohorts drawn by these admissions included patients who received day hospital treatment without any accompanying residential care, but the number of these cases was much lower in 1984 (12 as compared with 44 in 1980). We excluded from each cohort all patients transferred to another facility within 48 hours of admission or hospitalized continuously for the 12-month study period. Excluded patients accounted for 4 per cent of the 1980 cohort and 6 per cent of the 1984 cohort. The two cohorts were alike on most sociodemographic and clinical characteristics (see Appendix), but the 1984 cohort was slightly younger, with fewer voluntary admissions, fewer high school graduates, more homeless patients, and more patients with a Major Affective Disorder. The latter is thought to reflect changes in diagnostic practice, emanating from the use of DSM III* after 1980. Data Collection
Using chart abstracts and billing records, we recorded the type and amount of all mental health services used by each cohort member, beginning with the index admission and including all subsequent hospital and community-based services used over the next 12 months. Costs per unit of service were derived by the research staff from the general ledgers of the Massachusetts Mental Health Center and from the vendors of contracted programs. The method for deriving costs and the assumptions that underlie this work are described in an earlier report.'4 Per unit service costs derived for 1980 were inflated forward to 1984 levels using the national Consumer Price Index. Service unit costs (e.g., inpatient per diem) were merged with utilization data at the patient level, resulting in the cost, by category of care, to treat and support each cohort member. These data were basis for calculations of per admission costs and total annual costs for each patient. This approach permits per patient costs as mean cost per user of a particular category of care and mean cost per cohort member per category of care (all cohort members did not use all services). We have chosen to report the latter because it *DSM III: Diagnostic and Statistical Manual of Mental Disorders, American Psychiatric Association.
864
is the only way to identify shifts of care (and costs) between categories of care. Results Patterns of Utilization
In the 1984 cohort, there was a shift from inpatient to day hospital treatment coupled with residence in the inn, reducing the inpatient length of stay by about half (36 days in 1980, compared with 15 days in 1984). If the "episode of care" is considered to include not just the inpatient stay but the days that followed a transfer to the day hospital, then the total stay in 1984 was 38 days. A longitudinal analysis also revealed substitution effects. The total number inpatient days accrued by each cohort member over one year decreased from an average of 57 days (for 1.59 admissions) in the 1980 cohort to 21 days (for 1.45 admissions) in the 1984 cohort. Individuals in the 1984 cohort also spent an average of 33 days annually in the day hospital. As a function of the substitution of less expensive care, per episode inpatient cost dropped from $6,937 to $3,397, a difference of 51 per cent; with the day hospital/inn costs added, the difference shrinks to about 31 per cent, however. If the data are aggregated on an annual level, costs for hospital care (inpatient, day hospital and, in FY84, inn) are reduced from $13,112 in 1980 to $8,204 in 1984. In order to identify the factors contributing to the differences in annual costs, they were regressed on a model specifying age (and age-logged), race, sex, diagnosis related groups (DRGs), prior living situation, and fiscal year (the dummy variable specifying cohort). Table 1 summarizes estimates of the coefficients. The fiscal year was the major contributor to the variance. To test whether the distribution of costs affected the fit of the model, costs were logged and regressed on the same model, resulting in an R-squared of .129. Using the model as a guide in selecting variables, we tested the cost difference between cohorts after adjusting for DRG, prior living situation, and previous admissions. These cost-adjusted cohort differences shift slightly, as summarized TABLE 1-Estimates of Variance in Annual per Patient Costs Model Parameters
Intercept Year FY80 FY84 Living Situation prior to admission Home/self Home/family Psychiatric substance abuse facility or unit General hospital Group or nursing home Street Prison Other DRG 427(P.D.) 427(obs)
430(psychosis)
Other Age Agelog No. of previous admissions
Coefficient
Standard Error
-10409.27
23779.66
4920.96 0.00
1009.77 -
-4124.54 -3360.70
4401.53 4312.88
795.29 835.10 -3663.49 -4545.86 13202.37 0.00
5445.13 5144.48 4532.65 4539.34 6855.42
1602.87
2113.54 3655.15 1920.01
108.16 4814.90 0.00 -114.79 5927.60 308.02
-
-
254.48 9302.23 112.99
R Squared = .114 F Ratio = 5.45 Probability = .0001
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CONTAINING MENTAL HEALTH TREATMENT COSTS
in Table 2, but support the finding of differences between cohorts.
TABLE 3-Discharge
Disposition
FY80*
FY84*
Living at home Nursing home Psychiatric unit or freestanding psychiatric hospital or not discharged from MMHC Detox or substance abuse unit Med-surgery, general hospital Group Residence, supervised
44% 4%
45% 1%
14%
9%
