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Articles - Finances and Wealth in the Family Business

Does Cutting Costs Create Mental Illness?

Friday, June 06, 1997




By Kathy J. Marshack, Ph.D., P.S.


Recently I heard a well known Dale Carnegie graduate give a talk on how to attract new business. He used as an example, what attracted him to the family physician who had attended to him, his wife and children for years. The good doctor had given a similar talk at a public event and impressed the man with his expertise, solid reputation, and sincerity. For something as personal and life important as the health care of his family, the man wanted such an individual as this dedicated doctor. And for years his initial decision to choose this physician proved to be a good one. Yet in spite of the importance of choosing the “right” health care professional, this Carnegie graduate dropped the doctor like a “hot potato” when managed care rolled into town. Because his company chose a managed care plan that would not allow the doctor to join the panel, the dedicated patient who had so carefully chosen and developed a meaningful relationship with his health care provider, decided to follow the impersonal dictates of the managed care plan. Closer to my own area of practice, psychology, is another story that is even more disconcerting. A young teenage girl had been treated for depression by a psychologist. In actuality she was not seriously depressed but rather angry at her boyfriend for being somewhat shallow. The girl’s parents called the managed care company and were referred to the psychologist. After a few short sessions with the psychologist, the girl felt she had more control of the situation and would not allow the boyfriend’s manipulation to continue. Two weeks after terminating psychotherapy, the girl and her father had a fight that erupted into yelling and screaming between the two of them. The father in frustration called his managed care plan (an 800 number in southern California) and told them his daughter was suicidal. Without any psychiatric evaluation and without contacting the daughter’s psychotherapist, the clerk at the other end of the 800 number advised the father to take the girl to a psychiatric hospital. Although the girl was not suicidal and didn’t need hospitalization, she did learn to fear her father and to behave lest she be hospitalized again. Not a healthy outcome. By now you probably have the tone of this article. While managed care may save your company dollars, and while there is a need for health care reform, you might think twice about just what you are subjecting yourself, your employees and your family to. The mistakes made by the Carnegie graduate and the father of the teenager are not uncommon. There is a mystique about managed care. People have come to believe that the 800 number is like a parent, able to solve all of their woes. They believe that they will get the same personal service they received for years by a doctor who knows them. They are puzzled when the service they do receive is not sufficient to resolve the problem. Often they assume that there is nothing more that can be done, since their managed care company has not authorized additional services. It’s as if the managed care company has assumed the paternalistic mystique that the family doctor once held. But now the mystique has no concern about the individual, only cutting medical costs.

All right, I realize that I am biased on this subject, given that I am one of those doctors that is being pressed by the managed care industry. It may be hard for some of you to accept my complaints about managed care, even though others of you have your concerns too. So let me relate a few statistics to bring you up to date on the state of the art when it comes to psychotherapy. The following points come from recent published research. Ninety percent of emergency room visits are psychosomatic in origin. In a review of 58 studies, 85% of the studies found substantial reductions in the medical and surgical costs of patients who regularly used psychotherapy. In a review of 475 studies, the authors found that the average psychotherapy patient at the end of treatment was better off than 80% of those patients who need psychotherapy but remain untreated. Therapist competence relates more to client improvement than does the particular treatment modality. By 8 sessions of psychotherapy 50% of the patients are measurably improved. By 26 sessions or about six months of psychotherapy, 75% of patients are improved. Cognitive-Behavioral psychotherapy alone is as effective and efficient in treating depression as are drugs, or drugs and cognitive-behavioral therapy combined. Drugs have side effects. These are pretty impressive statistics. If as an employer you could improve the health of an employee, certainly you would see an improvement in your bottom line. Healthy employees produce. Most managed care companies, however, are not into improving employee health, but in cutting insurance and medical costs. If they were really interested in your bottom line, why are they not increasing mental health benefits? If psychotherapy works as well as or better than drugs; if psychotherapy reduces emergency room visits and medical and surgical costs; if psychotherapy works better than no psychotherapy; if competent experienced psychologists are part of the success, why then are benefits for psychotherapy being slashed and watered down so dramatically? You may question my findings, noting that your managed care plan includes mental health benefits. However, if you review your benefits in particular, you will find some serious flaws. Such flaws include the fact that your employee is entitled to five or ten employee assistance visits with a counselor. If the problem cannot be resolved in five or ten sessions, they get no more. Also the counselor they must see cannot be of their own choosing. Many of the psychotherapists contracted to managed care companies are inexperienced master’s level people. Another flaw is that all psychotherapy plans must be reviewed with the clerk at the managed care company. The treatment plan is not a confidential arrangement between the client and the psychologist. It is part of a computer record available not only to the insurance company, but to the managed care company who reviews and authorizes insurance claims.

There are some estimates that up to 12 people see your psychotherapy treatment plan. For things as personal as serious depression, or marital problems, this is hardly sensitive or confidential. Furthermore, do you really want an anonymous clerk to be making decisions about your personal mental health? A third flaw is that the managed care company makes decisions about what kind of treatment you should receive based upon actuarial tables. It is not based upon your unique situation, nor what you and the doctor feel would be best. There is no sensitivity to your needs, but what fits the budget. If psychologist competence is significant to treatment outcome, then why is a clerk making these decisions? I personally am willing to participate in only three managed care plans for the above reasons and more. I will work only with those plans that leave the treatment plan between myself and the client. I will work only with those plans that maintain client right to confidentiality. I will work only with those plans that pay me what I am worth as a seasoned professional. I will work only with those plans that authorize appropriate treatment and will not cut off therapy for short term gain, forgetting the long term health loss. If you are shopping for a new health plan and if you are considering a managed care plan, why would you be interested in my point of view? After all, as I said earlier, I am biased in favor of preserving my profession. But there are compelling reasons to take a good look at all sides of the situation. It’s like my CPA says about taxes. If you find a way to save some taxes in one area of your business, you ultimately pay more tax somewhere else. It’s the same with mental health. If you cut premiums and cut services to your employees when it comes to their mental health, you pay the price in increased medical and surgical costs, employee accidents, higher turnover rate and so on. In an ideal world, there would be enough to go around; enough dollars to pay for health care and the ability to choose any provider you wished. However, obviously employers have to strike a reasonable balance and health care has skyrocketed. But in the time that medical and surgical costs have skyrocketed, mental health costs have not grown. They are essentially at the same utilization rate and cost as they have been for decades. So psychotherapy is not the place to cut. It just doesn’t make financial sense, when the price you pay is increased health problems. So when you are shopping around for a health plan, I hope you consider just what you are buying when it comes to mental health benefits. ? Do you have ample psychotherapy benefits; at least 26 to 52 visits per year per employee? Do you have the right to choose the most experienced and competent psychologist? Is there true confidentiality guaranteed? Is the treatment plan dictated by actuarial tables or by the unique needs of the situation and the employee? Is the payment to the therapist worth the time of a competent professional, or are you forced to seek out an untrained, inexperienced person who will charge rock bottom prices?