Marketing Mental Health Services to Managed Care

William Winston, Norman Winegar, John Bistline

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9781560243625
• eBook ISBN: 9781317822912
• Topic: Medicine
• Subtopic: Medical Theory, Practice & Reference

Managed care is rapidly making traditional marketing strategies for mental health services obsolete. Here is the definitive book that helps professionals understand contemporary market forces and how to reshape marketing strategies in an increasingly competitive environment.Marketing Mental Health Services to Managed Care begins by demystifying the seemingly bewildering world of managed care systems. It enables the reader to become a fully informed partner in providing services for managed care systems. In an era in which many professionals are affiliated with one or more managed care networks, this book guides clinicians toward greater control of their professional futures by providing the steps necessary to develop a successful managed care oriented practice strategy. It will be especially helpful to the newcomer to practice in the 1990s or the seasoned practitioner interested in increasing referrals from managed care systems.Readers of this highly practical new book learn how to analyze the market for clinical services, how to plan and develop services for the managed care market, and how to sell professional services in an era dominated by active payor entities. The increased importance of automation, group practices, and effective office management skills are discussed. Although of particular value to outpatient practitioners, Marketing Mental Health Services to Managed Care also discusses marketing strategies and revenue generating ideas for inpatient mental health and substance abuse treatment facilities. Program managers, administrators, and marketing professionals in the hospital industry will find this book a valuable investment.Of special interest to all readers are chapters addressing the impact of managed care systems--with their focus on accountability, cost-effectiveness, and quality--upon traditional clinical paradigms. Brief therapy skills and techniques are discussed by these two veteran clinicians and writers. Emerging clinical innovations and effective reimbursement strategies are also discussed in this remarkable new book. A resource section, managed care company directory, and a glossary of terms make this a practical guidebook of long-lasting value to professionals from many disciplines. College professors and graduate students will also find Marketing Mental Health Services to Managed Care a valuable introduction to marketing professional services in the managed care dominated marketplace for healthcare today.

Chapter One

Why Managed Care?

The last decade has witnessed a revolution in the mental health care delivery system for privately insured American families. The revolution is the application of management processes and oversights to the health care benefits employers have established to cover the treatment of various disorders affecting significant numbers of American workers and their families. This “managed care” revolution portends many changes in the practice of mental health professionals, especially those in private practice settings.

Some forecast a gloomy outlook for a number of these practitioners. Former American Psychological Association (APA) President Nicholas Cummings, Ph.D. compares the changes associated with managed care to those the industrial revolution brought to society in the eighteenth and nineteenth centuries. According to Cummings,

The industrial revolution had three immediate effects. First, it reduced the numbers of workers needed. It organized labor more effectively avoiding duplication and waste; thereby, increasing the efficiency of the whole. Fewer workers were needed. Secondly, it drove down wages. More workers competed for fewer jobs. Increased efficiency and automation reduce the need for laborers. Finally, increased standardization was evident, making products more affordable and accessible for the mass of consumers. No longer were individual cobblers able to produce a unique pair of shoes. Instead, many cobblers were organized together to efficiently produce the most satisfying product the market demanded. Basically, managed mental health care has had the same effect on what was once a cottage industry, the private practice of therapy and counseling. (Personal Communication, August 1991)

In fact, managed care has impacted, but hardly eliminated, traditional private practice for mental health professionals. Actually, managed care may ensure the future of private practice-based therapy, particularly for clinicians, who are able to effectively meet the marketing challenges presented by it. These clinicians will likely retain control of their professional lives and avoid the obsolescence of the cobbler.

Thousands enter this business endeavor each year–thousands more enter training annually with the objective of securing a satisfying livelihood while contributing to society’s well-being through private setting practices. This book is intended as a resource to both current and aspiring practitioners who recognize the need to market their practices in a managed care environment so as to increase the likelihood of success. It will provide the reader with an understanding of managed mental health care’s (MMHC’s) values, technology, and operations–an understanding that is necessary since MMHC represents an increasing portion of the available “market” for clinical, professional services. More importantly, it will assist the reader in approaching MMHC in a market-oriented, entrepreneurial manner. In that sense, this is a retraining book, one that will help the reader utilize approaches that are relevant to today’s environment, yet were unknown or unnecessary in the practice world only a few years ago.

At the time of this writing over 38.7 million Americans are enrolled in one of over 600 Health Maintenance Organizations or HMOs (Marion Merrell Dow, 1991a). HMOs, which have their origins in the war economy of the 1940s, are large, complex businesses. They may operate on a nonprofit basis, but recently much growth has occurred in the for-profit sector of the industry. This has been especially true among the chains of HMOs owned by large insurance companies, which can market HMO coverage along with indemnity insurance products. Unlike traditional health insurance systems, which function largely as claims payers, HMOs both finance and deliver health care. HMOs seek to organize medical services into a coordinated, case-managed system of care that eliminates duplicative and unnecessary services. Also, they have as part of their goal the maintenance of health and the prevention of illness. This focus promulgates stratagems of pre-authorization of benefit coverage for care, care in the least restrictive (less costly) setting, and case management by the key clinician in the HMO system, the Primary Care Physician (PCP).

The PCP has a financial incentive to maintain the patient’s health in an HMO system. This is accomplished by preventative services and the provision of all necessary, but no unnecessary, care, since the physician is paid a monthly per capita fee, or capitation, regardless of how frequently the patient is seen or what services are provided. The PCP collects capitation payments each month for every HMO member who has selected that doctor as their PCP. This system tends to reward PCPs who are effective case managers and discourages the unnecessary visits and procedures for which indemnity health insurance reimbursement systems are criticized.

HMOs view mental health professionals as specialist providers, sometimes requiring a referral from the patient’s PCP as in the manner of a referral to a neurologist, cardiologist, or other specialist. For consumers, HMOs offer lower out-of-pocket expenses, usually a nominal copayment at the time of an office visit. In return consumers give up a degree of choice, as the selection of a PCP is limited to the HMO physician network, and visits to specialists require a PCP referral. HMOs have some provision for mental health service delivery to their members. Table 1-1 shows typical HMO mental health and substance abuse treatment benefits.

Preferred Provider Organizations (PPOs) enjoyed a membership of another 22.3 million Americans in the early 1990s (Marion Merrell Dow, 1991b). These entities are another form of managed health care, but one that allows greater consumer choice and less cost-effectiveness to the purchaser. The essential feature of PPOs is a credentialed panel of physician providers from which the enrollee may select a giver of care. Services are delivered on a discounted fee-for-service basis. Providers anticipate that the increased volume of referrals will more than offset the discount they offer in their fee schedules. PPOs do not focus heavily upon case management or the utilization management functions associated with HMOs. Several of the nation’s large insurance carriers offer PPOs in addition to indemnity products and HMO services. PPOs often include psychiatrists and/or psychologists to serve members’ mental health needs.

In the late 1980s, yet another form of managed care appeared in the marketplace-the employer-sponsored mental health care specialty network. Sensing that HMOs and PPOs were unneeded intermediaries, some large employers contracted directly with MMHC firms to establish nationwide mental health care systems for their specific employee populations. These mental health networks are sometimes known as Point-Of-Service (POS) networks since some models allow the employee at the point of service to choose a network option for care (and receive richer benefits, less out-of-pocket expense, etc.) or to choose any provider, but at increased expense. Such programs are also know as carve-outs. This term implies that the mental health/substance abuse benefit has been separated or carved out from the medical/surgical portion of a total health care benefit package offered to employees, indemnity insurance plans or HMO options may still be offered, but mental health care is obtained through this specialized network. A number of variations on this theme have been created as employers have sought the most appropriate system for their needs.

TABLE 1-1. Typical HMO Benefit Description and Limits

Mental Health
Outpatient Therapy	20 visits per calendar year
Partial Hospitalization	2-1 equivalency to inpatient day maximum
Inpatient Hospitalization	30 days per calendar year
Substance Abuse
Outpatient Therapy	50 visits per year, limited to structured treatment program
Partial Hospitalization	2-1 equivalency to inpatient day maximum
Inpatient Hospitalization	30 days per calendar year, limited to 60 days per lifetime

Table 1-2 illustrates the benefits of a typical network-based plan contrasted with common HMO benefits. It is evident that these network benefits are enhanced in comparison to HMO-style benefits. Note that a nonnetwork benefit coverage is offered, although at greater consumer cost-sharing. Since in-network benefits are managed according to clinical necessity by practitioners associated with the managed care firm, benefits are richer. The flexibility to ensure that each patient’s treatment needs are met through these enhanced in-network benefits is a hallmark of these plans. (Note that the network-based mental health/substance abuse benefit structure often parallels a similar plan for medical/surgical care. Many forecast that network-based products will be increasingly utilized as a model of organized care delivery. Some argue, however, that the options for service outside the network weakens the system’s ability to manage care, effectively sabotaging its goals.)

TABLE 1-2. Mental Health Provider Network Mental Health/Substance Abuse Benefits Description and Limits

	IN-NETWORK	OUT-OF-NETWORK*
Deductible	$0	$300/$600
Out of Pocket Maximum (excluding deductibles)	N/A	$3,000/$6,000
Lifetime Maximum	$500,000	$50,000
Confinement Limits	None	30 days/year 2 substance abuse
COPAYMENTS
Inpatient
• Per hospital admission	$150	20% of charges after deductible is met**
Outpatient
• Per office visit	$10-individual therapy $5-group therapy	50% of charges after deductible is met

*Though out-of-Network coverage is sometimes offered, benefit design incentivi...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• About the Authors
• Introduction
• Chapter One: Why Managed Care?
• Chapter Two: Understanding Managed Care Systems
• Chapter Three: Assessing the Managed Care Market
• Chapter Four: Practitioner Self-Assessment
• Chapter Five: Managed Care Oriented Outpatient Practice Innovations
• Chapter Six: Managed Care and Inpatient Program Partnerships
• Chapter Seven: Pricing and Promoting Clinical Services
• Chapter Eight: New Perspectives on Consumer/Practitioner Relationships
• Appendix A: Managed Mental Health Care Companies
• Appendix B: Hospital Patient Update
• Appendix C: Sample Managed Care Practitioner Contracts
• Appendix D: Sample Provider Application
• Glossary
• Index