Our results suggest that the elimination of behavioral health benefits led to substantial increases in medical expenditures for individuals who had been using the substance abuse treatment benefit. This finding was supported by both modeling approaches. These results are in line with other research that suggests that substance abuse treatment reduces other medical expenditures (Holder 1998
; Cartwright 2000
; Parthasarathy et al. 2001
; McCollister, and French 2003
; Ettner et al. 2006
; Wickizer et al. 2006
). However, unlike most of those studies, our study found that the cost of substance abuse treatment services was greater than the offsetting increase in medical expenditures that occurred when the benefit was removed. These different findings may be a result of several factors, including different effects that occur when benefits are provided versus removed, an inability to find an equivalent comparison group, or differences in Oregon's financing of substance abuse treatment services.
Our estimates of changes in expenditures for individuals who accessed outpatient mental health services differed considerably according to the modeling approach. Our regression method suggests an overall decrease in expenditures. Our covariate matching method suggests relatively little change in expenditures. Neither suggests an increase in expenditures that were observed with the substance abuse group.
There is an important caveat to our findings on individuals who accessed mental health services. Our study group consisted of individuals who were not part of the “categorically eligible” population that comprises most Medicaid programs. Most notably, this implies that our study group did not include many of the individuals with severe mental illness who would have qualified as disabled and been eligible for the OHP “Plus” benefit package. (In contrast, there is no disability category for individuals with substance abuse disorders.)
Furthermore, there may be important differences between individuals with mental illness and chemical dependencies, particularly in the persistence of the disease and emergence of conditions. Individuals with chemical dependencies who lost their treatments may have more immediate physiological and toxicological reactions. In contrast, some individuals with mental illness may have had less persistent conditions. Several studies have demonstrated the long-term benefits of quality improvement initiatives for behavioral health (Sherbourne et al. 2001
; Wells et al. 2004
). Thus, the full effects of eliminating the behavioral health benefit may not be observed in the 12-month follow-up of our study. Of note, legislators ultimately decided to reinstate outpatient behavioral health benefits in August 2004. Restoration of benefits was made possible through a reduction in the list of covered medical services, a shift of enrollees into managed care, and the imposition a provider tax on hospitals and Medicaid managed-care health plans.
There are other important limitations to this study. First, we note that the benefit changes that occurred in 2003 resulted in substantial disenrollment from the OHP program. Our estimation focused on a relatively small group of 1,729 behavioral health benefit users. In contrast, before the 2003 policy change, approximately 25,000 OHP Standard individuals accessed the behavioral health benefit each month. Our numbers are substantially smaller primarily because of the large disenrollment that occurred in 2003. Our requirement that individuals have at least 12 months of enrollment over a 30-month period of time also reduced our sample size. Nonetheless, these selection criteria may have led to a study group that differed in important ways from the “typical” OHP or Medicaid behavioral health benefit user.
Second, our empirical approach, estimating the ATT, is designed to isolate the effect of the removal of the behavioral health benefit. By comparing changes in expenditures among behavioral health benefit users to matched individuals with the same benefit package but no history of accessing the behavioral health benefit, we assume that observed changes can be attributed to the elimination of the behavioral health benefit. However, it is impossible to completely separate the elimination of the behavioral health benefit package from other changes in the benefit package, including, most importantly, the imposition of substantial copayments.
Third, our analysis does not assess the long-term effects of behavioral health benefit elimination. Fourth, our analysis focuses on utilization and expenditures that are recorded in claims data. However, safety net systems are available to OHP enrollees, and their use of these systems would not be detected in our analyses. Thus, decreased utilization in the OHP claims may be reflected by unrecorded increases in utilization of safety net services. (Our Supplimentary Material Appendix SA1
describes some anecdotal evidence around the use of safety net systems during the study period.)
Our analysis may also be limited by the difficulty in identifying a truly comparable comparison group. Although the propensity score appears to have succeeded in matching on demographic characteristics, even after weighting, individuals who accessed the behavioral health benefit had substantially higher levels of expenditures than individuals in the comparison group. The lack of equivalence in comparison groups seems to be a particular issue in individuals who had accessed the mental health benefit, as evidenced by the contrasting estimates from our two separate methods.
Finally, it is important to note that, although we find apparent savings to the state from elimination of the behavioral health benefit, the savings are relatively small. Before their removal, behavioral health benefits accounted for <8 percent of all expenditures for OHP Standard enrollees.
Our findings suggest that cuts for substance abuse services may not yield the intended savings. Our findings on mental health use are more difficult to interpret. Taken as a whole, our results are consistent with a large body of literature that has shown that behavioral health coverage can be achieved without substantial increases in cost. In particular, on the basis of the experience in Oregon, other state Medicaid programs would be unlikely to find substantial savings through cuts in their substance abuse coverage.