There is considerable discussion these days about the factors that drive up health care costs. But there is one factor that contributes only modestly, if at all, to overall annual cost increases. And, if the U.S. Congress agrees, it could go a long way toward improving the lives of millions of Americans who need help.
The issue is behavioral health parity.
In January, the issue was front-page news in Rhode Island and elsewhere in the country as U.S. Rep. Patrick J. Kennedy and his House colleague, Rep. Jim Ramstad, R-Minn., presided over a hearing on behavioral health parity at the Rhode Island State House.
It was the opening event in their attempt to gain political traction for their bill that would prohibit insurers from using different sets of rules for covering behavioral health problems. The bill, for example, would outlaw charging higher co-payments for an office visit to a psychotherapist than for a visit to another specialist.
While overall behavioral health costs are much lower than general medical costs, the price tag is still substantial. According to a first-of-its-kind report by the Office of the U.S. Surgeon General, the United States spent more than $99 billion in 1996 for the direct treatment of mental disorders, substance abuse and Alzheimer’s disease and other dementias. More than two-thirds of this amount – $82 billion – was to treat mental disorders and substance abuse.
The report also found that in 1990, indirect costs of all mental illnesses in the United States were nearly $79 billion. Most of that, the report said, was due to loss of worker productivity in usual activities because of illness or absenteeism. Indirect costs also included $12 billion in lost productivity attributed to premature deaths and $4 billion in productivity lost when mental illness resulted in jail terms or for people not engaged in their normal activities because they were caring for a family member with mental illness.
“These indirect costs are conservative because they do not capture some measure of the pain, suffering, disruption and reduced productivity that are not reflected in earnings,” the surgeon general said.
For 2005, Blue Cross & Blue Shield of Rhode Island paid a total of $63 million to cover claims for behavioral health services.
The surgeon general maintains that about 20 percent of the U.S. population has a diagnosable mental illness in any given year, but that only three out of 20 receive appropriate care.
Meanwhile, the U.S. Government Accountability Office reports that 87 percent of health plans in the United States routinely force patients to pay more for mental health care than for other health care, put stricter limits on mental health treatment, or both.
“Every day that we allow insurance discrimination against mental illnesses is another day 82 Americans will die of suicide,” Kennedy said in promoting his bill. “It’s another day that American business will lose $85 million in lost productivity to depression alone.”
Foes of mental health parity legislation have cited concerns about cost impacts as reason to thwart the bill in Congress. Advocates, however, now point to recent studies that suggest just the opposite – health insurance premiums will not skyrocket with parity.
One such study, reported in the New England Journal of Medicine in March 2006, looked at federal employee health benefits programs that have offered mental health and substance abuse benefits on par with medical benefits since January 2001. The study revealed that parity had not caused an increase in use of behavioral health services or in spending for patients who used these services. The report concluded that when coupled with managed care, insurance parity improved protection without increasing overall costs.
An accompanying editorial in the same publication said, “In today’s mental health environment, parity coverage unambiguously improves the value of health insurance. … The results of this study ought to pave the way toward broader acceptance of parity on the part of employers, insurers and legislators.”
When testifying at the Kennedy-Ramstad hearing, I said that BCBSRI behavioral health coverage already exceeds what Rhode Island law requires. For example, BCBSRI now covers behavioral health visits in excess of the mandated minimum of 30. We also eliminated preauthorization for all outpatient behavioral health services in 2001, and the plan achieved parity in reimbursement in 2004. This has not resulted in unreasonable cost increases.
As I stated at the hearings, Blue Cross fully supports complete parity between behavioral and physical health. The combination of behavioral health and physical health is key.
Apparently there long has been strong support for the Kennedy-Ramstad bill in the U.S. House. But past House leaders have kept that measure from coming to the floor for a vote. This time, with new leadership, the sponsors say the bill will be voted on by the full House. A lot of people in this country will be rooting for its passage.
James E. Purcell is president and CEO of Blue Cross & Blue Shield of Rhode Island.