The raging controversy in managed care continues to focus on whether reducing expenditures actually means saving money. Recent data published in The American Journal of Psychiatry appear to throw new light on this topic by looking at the depression treatment effectiveness in terms of its impact on patients’ earnings.
Mingliang Zhang, Ph.D., associate director of outcomes research for Merck & Co. Inc., and his colleagues compared the costs of depression treatment provided by primary care physicians with the costs of care received from mental health specialists. They then analyzed each patient’s probable loss of earnings under each treatment method.
Referring to the estimated $12.4 billion to $19.2 billion a year spent on treating depression in the United States, the authors wrote, “Treatment costs, however, are only a small portion of the total cost to society; the consensus reached by a national panel on depression is that depression is seriously undertreated, resulting in large economic costs to society.”
The team drew its subjects from 11,078 individuals in 15,721 randomly selected households in Arkansas. The results found 998 screened positive for depressive disorder or substantial depressive symptoms. The group was further refined by eliminating subjects who exhibited suicidal ideation, those whose depression was associated with the loss of a loved one, those who had been diagnosed as having lifetime mania or those who denied all depressive symptoms during a baseline interview.
A total of 470 individuals agreed to participate in the longitudinal study, and complete medical and insurance records were obtained for 435 of them. The subjects participated in an extensive baseline interview at the beginning of the study and were interviewed again at six and 12 months. During that period, a total of 171 of the original participants received treatment for depression.
At each of the interviews, subjects were asked how many days they had worked during the previous four weeks. Based on the information provided, the researchers determined the number of hours the subjects had worked and multiplied it by each one’s hourly pay rate. Losses of jobs and changes in employment were taken into account, and gaps in wage information were filled by using the mean wage rate for each subject’s age and gender, weighted for the difference between mean earnings in Arkansas and the rest of the United States.
Medical and insurance records were analyzed to obtain data on treatments, and visits or hospitalizations for depression-related causes were isolated from general medical care. Of the 171 subjects, 56 received depression treatment from a mental health care provider, 41 of whom also received depression treatment in the general medical sector. The remaining 115 were treated for depression in the general medical sector.
Nearly half of the subjects who were treated in the mental health care sector received treatment that followed the guidelines developed by the Agency for Health Care Policy and Research, compared with only 21% of the subjects treated in the general medical sector.
Overall, the average treatment cost per patient was $1,224 higher in the mental health sector than in the general medical sector. But Zhang and his associates found that this higher cost was offset by the difference in lost earnings. They noted, “the lost earnings for the average patient receiving depression treatment in the mental health sector was $2,101 lower than that of the average patient receiving treatment in the general medical sector during the 12-month period.”
In other words, subtracting the difference in treatment cost from the difference in lost earnings, the researchers concluded that “depression treatment in the mental health sector had an overage annual net savings of $877 ($2,101-$1,224) over depression treatment in the general medical sector.”
The researchers then tested a number of scenarios, allocating some or all of the general medical visit costs to the treatment of depression, even if visits were primarily concerned with some other cause. In the base scenario, 50% of the visit cost was allocated to depression. In the first alternative scenario, 100% of the charges for a visit that included treatment for physical costs were allocated to depression. Under this scenario, the average annual net savings was $859.
Under a third scenario, with 0% of the mixed visit costs allocated to depression, the net savings for depression treatment by mental health specialists was $895. Other alternative scenarios produced similar results.
“Basically, in this case, the depression treatment cost is more than offset particularly in the mental health specialist sector compared to the general medical providers,” Zhang said in an interview.
However, Zhang declined to use the difference in results to wholly discount managed care’s benefits.
“Even in managed care, you can sometimes find good quality care,” he said. “This is not a problem of managed care per se but of how good the treatment is. If managed care tries to treat psychiatric disorders in the primary care sector-at least in the current practice standards-it seems that the employers [who sponsor managed care plans] are not reaping the greatest potential benefits.”
In their discussion, the authors noted, “Our analyses indicate that depression treatment provided by specialists, although more expensive, more than pays for itself in terms of savings in lost earnings compared with treatment provided by generalists.”
They concluded, “Although it costs less, routine treatment by generalists may not be effective enough to have an impact on patients’ functional capacity.”