Tidewater Managed Care Study

Joseph P. Morrissey, Ph.D., Principal Investigator

This study was funded by a four-year (1996-2000) cooperative agreement with the Substance Abuse and Mental Health Services Administration. It focused on one particular vulnerable population — adults with a serious mental illness (SMI) who are Medicaid enrollees — and compared the experiences of this target population under two different organizational and financing arrangements for Medicaid beneficiaries: a traditional, no-risk, fee-for-service Medicaid program in the greater Richmond area, and a full-risk, capitated managed behavioral health care plan (Medallion II) that operated under a 1915b waiver in the Tidewater area of Virginia from 1996-98. Medallion II was an integrated model public-private partnership that involved capitated payments to three health maintenance organizations (HMOs) for combined medical-psychiatric services. Enrollment at the time exceeded 94,000 persons.The study was designed to answer three basic questions. First, what is the impact of managed care on utilization, outcomes, and cost for adults with serious mental illness? Second, are there different patterns of services provided to enrollees under managed care? Third, what are the experiences of consumers, families and providers with managed care, i.e., how satisfied are they with their managed care plans?Findings indicated that providers reported having less access to intensive services at the managed care site. Clients at the managed care site on average received a less intense set of services and functioned at a lower psychosocial level six months later than did clients at the fee-for-service site.Family members tended to feel more burden at the managed care site, but the difference with fee-for-service was not statistically significant. The policy conclusion is that there is cause for concern about the effects of managed care on persons with a serious mental illness. Further research with longer-term follow-ups is urgently needed.The study involved several types of data collection and analysis:

A four year longitudinal, quasi-experimental assessment of Medicaid claims data encompassing the two years prior to and the two years following the introduction of Medallion II (January 1, 1996)
A six-month prospective cohort study comparing service delivery processes and outcomes for a sample of Medicaid enrollees receiving services under managed care (n = 250) and another sample (n = 250) under fee-for-service arrangements
A survey of providers at both sites (n = 198), and;
A survey of family members (n=130) satisfaction with managed care.

This study involved a multi-university collaboration between the Cecil G. Sheps Center for Health Services Research (SCHSR) at the University of North Carolina at Chapel Hill (UNC-CH), the Southeastern Rural Mental Health Research Center (SRMHRC) at the University of Virginia (UVA) (subcontractor with Elizabeth Merwin, RN, Ph.D., as Responsible Investigator) and the Williamson Institute at the Virginia Commonwealth University (VCU) (subcontractor with Yasar Ozcan, Ph.D., as Responsible Investigator). Several publications have been produced from this project.