Welcome to my blog, a place to explore and learn about the experience of running a psychiatric practice. I post about things that I find useful to know or think about. So, enjoy, and let me know what you think.

Sunday, April 6, 2014


I'm becoming increasingly, shall we say, disenchanted with the APA. Even more than I was when I terminated my membership a couple years ago.

The latest escapade contributing to my disenchantment is the Milliman American Psychiatric Association Report, Economic Impact of Integrated Medical-Behavioral Healthcare, Implications for Psychiatry. For some reason, I can't get an independent link to come up for this-it just generates a pdf in my downloads file, but there are links to it, and its summary HERE.

This is a 39 page document prepared for the APA by Milliman, Inc., a firm that provides "actuarial and related products and services". It reads like a piece of PR, wonder why. Phrases like,

The field of psychiatry is poised to become a major participant as IMBH evolves. Psychiatry has a direct role in the value proposition of integrated/collaborative care and stands to benefit from the savings generated by effective integration programs.

are what make me think so.

They estimate that somewhere between $26.3 and $48.3 billion can be saved annually through use of integrated medical/behavioral healthcare systems, like collaborative care.

First, they proceed to demonstrate how they came up with those figures. I'll attempt not to be too detailed, but they claim that, "Medical costs for treating those patients with chronic medical and comorbid mental health/substance use disorder (MH/SUD) conditions can be 2-3 times as high as (for) those beneficiaries who don‘t have the comorbid MH/SUD conditions. The additional healthcare costs incurred by people with behavioral comorbidities are estimated to be $293 billion in 2012 across commercially-insured, Medicaid, and Medicare beneficiaries in the United States.


"Most of the increased cost for those with comorbid MH/SUD conditions is attributed to medical services (more than behavioral), creating a large opportunity for savings on the medical side through integration of behavioral and medical service."

My question is, "How? "

Some of the figures are interesting. I should mention that I basically believe their figures, just not their conclusions, but who knows. They looked at 3 types of insurance, Commercial, Medicare, and Medicaid, and divided these into populations, and then researched how much was spent on each population. Commercial and Medicare were divided into 4 populations: No MH/SUD; non SPMI (severe and persistent mental illness) MH; SPMI; and SUD. Medicaid was divided into No MH/SUD and MH/SUD.

Here's a screenshot of Per Member Per Month Costs per Population for the Commercially insured:

You can see that a lot more is spent on medical care for those with Mental Health and Substance Use problems ($750, average), than for those without ($280).  What I've highlighted is incidental but interesting. $23 per person per month is spent on those with a Non-SPMI MH diagnosis for behavioral treatment, vs. $74 for behavioral meds. In the SPMI population, it's $128 vs. $175.

That's 3 times as much for meds than for other behavioral care in the Non-SPMI MH group. Tell me, what kind of therapy does $23 a month buy? And this is commercial insurance we're talking about, not medicare or medicaid.

In fact, medicare spends $579/month, and medicaid spends $309/month on medical care for Non-MH/SUD, vs. the $280 for commercial insurance. And medicaid spends $286/month on non-pharmacologic behavioral care for those with MH/SUD diagnoses, vs. an average of $75/month spent by commercial insurance. Maybe this is because those with medicare and medicaid tend to be sicker than those with commercial insurance.

Here's another chart with my highlights:

Why are behavioral facility costs roughly the same for those with a Non-SPMI MH diagnosis, and those without? And why are professional behavioral costs for No MH/SUD ($3690) actually greater than costs for SPMI ($3457)? Are there patients who are receiving behavioral treatment without a behavioral diagnosis? And if so, how are providers coding and being reimbursed?

Let's move on to the heart of the document. How can this data help us to provide better and more cost-efficient care in an integrated care model? The answer is something called, Value Opportunity, which is, "The potential for savings if we could manage all of a patient‘s comorbid conditions more effectively."

For example:

The value opportunity for chronic kidney disease is, "$2,251 PMPM ($6,901 - $4,650) additional healthcare spending for those treated for substance abuse and $1,582 PMPM ($6,232 - $4,650) additional costs for those treated for Non-SPMI conditions."

So all we have to do is cure patients of their Mental Health and Substance Use Disorders, and that will put them into the No MH/SUD population, so then their medical costs won't be as high. Right?

The bottom line:

Across all populations (commercial plus Medicare plus Medicaid), we estimate a total annual value opportunity of $293 billion through integration of behavioral and medical services in the U.S.

Well gee, Mr. and Mrs. Milliman, that's a lot of money! Will integrated care really be able to produce this result?

Yes, my boy.

For example:

"The Pathways study focused on the outcomes of a program utilizing specialized nurses to deliver a twelve-month depression treatment program for patients with diabetes. This program was administered through a randomized controlled trial that compared the systematic depression treatment program with care as usual. Total outpatient costs were approximately equal during the 12-month intervention period for both the intervention group and the usual care group, but during the 12-month period following the intervention, median outpatient costs for the intervention group were $50 PMPM lower than costs for the usual care group. Over the entire two year period, including the intervention period, total healthcare costs (including inpatient and outpatient health services) were $46 PMPM lower for the intervention group than for the usual care group. This represents savings of about 5% of total healthcare costs for the intervention group over a 2 year period."

Hold on, there! Where does the $50 PMPM come from? Is it savings in medical care for diabetes?

According to the abstract (check the link to the study, above):

Conclusion: The Pathways collaborative care model improved depression care and outcomes in patients with comorbid major depression and/or dysthymia and diabetes mellitus, but improved depression care alone did not result in improved glycemic control.

In fact, most of the abstract doesn't jive with the description above. Maybe they did a follow-up study that I didn't find.

The Milliman document also cites the Multifaceted Diabetes and Depression Program (MDDP) study.

"Although not statistically significant, medical cost savings of approximately $39 per member per month (PMPM) were observed during the eighteen months following the implementation of the MDDP program." (emphasis mine)

They also cite the IMPACT Study, and state that, "Total healthcare costs were tracked for a 4-year period following the intervention, and costs for the intervention group were an average of $70 PMPM lower than costs for those receiving usual care. This represents savings of about 10% of total healthcare costs for the intervention group over a 4 year period. Patients in the collaborative care management program had lower costs in every category that was observed, and the results of a bootstrap analysis indicated that patients in the collaborative care program were 87% more likely to have lower total healthcare costs than those receiving usual care."

I don't like the "total healthcare costs" phrase. Where was the money saved? In "every category that was observed"? What is this "bootstrap analysis"?

IMPACT studied interventions for depression in the elderly, in primary care settings. It found that depression improved over 12 months. That was the stated purpose of the study. Outcome measures assessed depression, depression treatments, satisfaction with care, functional impairment, and quality of life. The study was not designed to test healthcare spending.

They offer a couple more fumpfed examples, but here's the OMG kicker:

The American Medical Association estimates that there are 41,784 psychiatrists practicing patient care as of 2012. The Bureau of Labor Statistics estimates average annual earnings of $174,170 per practicing psychiatrist as of May 2011. This translates to $7.3 billion in psychiatrist wages annually. Comparing this estimate to the projected savings estimate of $26-48 billion means that the potential financial impact of IMBH programs can be up to 3.5 to 6.6 times annual psychiatrist earnings. Stated another way, a 10% gain sharing arrangement for psychiatrists (where they are credited with a certain percentage of actual achieved healthcare cost savings through a contractual arrangement) of savings from integration has the potential to increase annual earnings estimates for psychiatry overall by about 50%. In this example, that leaves the other 90% of savings through collaborative care to be shared with others in the collaborative care teams, to be used to lower healthcare premiums, and to be reinvested in community based care.

APA, I'm so over you.


  1. I am appalled at the fact that the APA is working with Milliman and that they don't come up with their own statistics, data, and report. In case they have not realized it, business consultants have a long history of coming up with data to support any business hypothesis. That is how we got to where we are today with managed care. Only the incredibly naive expect a "gain sharing arrangement" from Wall Street. Collaborative care is the fastest way I can think of for psychiatry to become completely irrelevant.

  2. I'll go ya one better: I think collaborative care is the fastest way for patients to become completely irrelevant.

    1. I rather think so.

      My take on this, and we’ll see if I am right in about 5 or so years after this really gets off the ground, is that the cost savings on medical care will be realized by not providing much of any medical services. It will only be palliative care. Except it won’t really be palliative in that patients will be made to think their illnesses are all a figment of their imagination while being coerced into accepting that if they just think positively enough, they will be healed. What is this called, magical thinking?

      I expect the next mental health diagnosis to rise astronomically will be Somatic Symptom Disorder. The heck with those who really have it; going forward, we’ll all have it.

    2. You are to be congratulated for even reading that report. I've begun to wince whenever the word "care" [as in collaborative care] is used. Managed Care, caregivers, collaborative care... George is right, "business consultants", "business hypothesis", "business plans" haven't done much for us or our patients. I'm not sure they've done much for Medicine proper either.

    3. You know, when I first looked at the document, it made my head hurt. But once I started going through it, it was fascinating, in a horror-struck kind of way.

    4. Even though Lucy plays the nickel a session psychiatrist in Peanuts, the APA is more like Charlie Brown, hoping that she won't pull the football away just this once. That's pretty much my take on the APA vs. business or political interests in the past twenty years, save Dr. Harold Eist.

      There comes a time in psychiatric treatment or in any conflict situation that we have to be a lot more attention to behavior and results than talk and intentions. The leadership at APA seems to be all about platitudes (why do APA Presidents have to give that same stale 1980s speech about stigma, which is hardly a problem anymore?). Dr. Dawson points out correctly in his forum that the one-year term structure of APA Presidency renders the organization hamstrung on following through with agendas. We should admit that at least politically, it's a ceremonial organization given how little it does for the psychiatrist in practice. At this point, I am far more interested in supporting AAPS, which is aggressively going after ABMS on the MOC issue.

      Either the APA is childishly naive, or they are fraternizing with the enemy. There are no other possible conclusions. Dr. Lieberman's stunning company man video endorsement of collaborative care models is another example of this.

      Marcus Welby may have been a fine TV doctor, but I don't want him watching my back at the OK Corral. There is a time and place to be a mensch, but medical politics in 2014 is not it. Thought experiment: imagine business and politicians treated the teacher's union or the ABA this way, what do you think would happen?

  3. The way I read it, Non-SPMI MH is being hugely overtreated with MH pharmacy.

    Otherwise, this sounds like a report prepared on a bad day by Kaan and Associates or maybe Monica Talbot when she was still at Kinsley & Associates.

    Interesting they hired a consulting firm to find a place for psychiatry in the new world of medicine. This was something someone at the APA couldn't conceptualize? The UK already has "consulting psychiatrists." I wonder how much it cost the APA?