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–Susan L. Becker, Director, Division of State Programs, Center for Substance Abuse Treatment (CSAT)

The drive toward national health care reform has been a catalyst for new thinking and planning about how we, as a Nation, will provide health care for our citizens. Even though the Federal reform effort has derailed in this Congress, the States continue to be a focus of progressive innovation, developing and experimenting with a range of creative models for delivering health care. At this point, at least 15 States now stand ready to take significant, though perhaps incremental, steps toward health care reform. Ultimately, it may well be one of these successful State models &endash;after a year or two of trial operation– that will become the new prototype for a national reform plan. Virtually all these State models depend to some extent on managed care.

For all of us who care about substance abuse treatment, the next few years will be critical. We are now involved in one of those dramatic turning points for the field that seem to happen every 10 to 15 years. We are in a period of reassessment and reevaluation that will profoundly affect how alcohol and other drug (AOD) treatment is delivered. Our AOD treatment systems are changing fast. Increasingly, substance abuse treatment is being provided through managed care arrangements. Both State substance abuse agencies and treatment providers need to be ready to function well in this more competitive managed care environment. We can expect major changes in how

• Treatment services are provided

• Services are financed and structured

• Substance abuse treatment is coordinated and related to other components of the system, especially primary care and mental health care

Health Reform: A Promise and An Opportunity

Health care reform offers the substance abuse treatment field an extraordinary opportunity to become a full-fledged partner in the health care system, with our patients being fully integrated into primary care systems. We can be encouraged by two highly significant factors that have emerged over the last 2 years as Federal and State reform efforts unfolded. First, State AOD agencies, providers, and advocates have worked together as never before to present the case for substance abuse treatment with State and Federal policymakers. Those working with State legislators report a wide recognition that treatment works and is cost effective. Second, despite initial fears that AOD treatment might not be a covered benefit, the Federal plan did include behavioral health benefits, as do nearly all new and proposed State plans.

Managed care, with its built-in requirements for accountability, also offers promise as an incentive for improving our substance abuse treatment systems. Those of us involved in treatment well know that we need more data on patient outcomes and an improved ability to match patients with the particular type of treatment most appropriate for them. Even without managed care, the field has been moving in the direction of improved data systems, uniform screening and placement criteria, and patient evaluation based on outcomes rather than on completion of treatment. Managed care requirements simply reinforce the drive toward increased accountability and professionalism already evident in the substance abuse treatment field.

The Challenges Ahead

But for all its promise, health care reform also carries very great risks for our clients– those now receiving treatment for their substance abuse through the publicly funded system. Our clients tend to be poor, with little political clout, and they have serious needs and problems not typical of those covered in private managed care plans. As policymakers develop managed care systems, we need to be sure they fully understand addiction and the nature of successful addiction treatment. Managed care is essentially a system for providing acute care – and substance abuse is a complex, chronic, and recurring condition. Studies show that length of treatment is an important factor in successful recovery. Under the current insurance system, many patients use up all their acute substance abuse treatment benefits before reaching recovery; these patients must fall back on the publicly funded system to complete their treatment. In the shift to managed care plans, we face three critical challenges.

Challenge #1 – How to ensure comprehensive, cost-effective services. Substance abuse is a multifaceted disorder, and an insurance package or health plan is only part of the formula for successful treatment. Effective treatment requires a set of core services beyond health care provisions. These services include such components as help with housing, child care, education, vocational rehabilitation, and often such basic survival needs as food. Other important services for this population can include counseling and education on parenting skills, violence prevention, family AOD problems, sexual and physical abuse, nutrition, and prevention of AIDS and sexually transmitted diseases.

These " wraparound " services are not normally covered by a health care plan. Many managed care organizations are unfamiliar with the needs of chronic substance abusers who are treated with public funding and with the community-based organizations that serve them. Yet, for many patients with serious and long-standing substance abuse problems, these services will be essential for treatment to succeed.

Challenge #2 – How to provide an adequate level of AOD benefits. Some States are enacting AOD benefits with arbitrary caps and limits at levels too low to provide adequate treatment; some require co-payments too high for unemployed and low-income patients to be able to pay. These limits are being imposed, in spite of the evidence that such limits are not needed to control costs. We need to provide specific information on what benefit levels are so low as to be a disincentive to treatment for our clients.

We need to convince policymakers that adequate AOD treatment can have a cost-offset (payoff) value. A number of States have compiled impressive, and consistent, data showing the cost offset savings for patients and society after effective AOD treatment. Former substance abusers have much lower costs for primary care and emergency room care because of their reduced co-morbidities. Data from Washington and Oregon demonstrate that effective AOD treatment also reduces the costs of other safety net programs for these clients. Their posttreatment costs are less for such programs as workmen 's compensation, unemployment, and welfare, as well as for foster care for children and disabilities.

Challenge #3 – How to fund, pay for, and deliver post-acute services. All health care reform schemes will need to deal with the issue of reinsurance for chronic care. Substance abuse is a fundamental underlying factor in the four epidemics of our time: HIV/AIDS, tuberculosis, sexually transmitted diseases, and violence and traumatic accidents. All are conditions likely to require long-term care. From the public health point of view, we cannot fail to provide this care for those who need it.

Managed care is accustomed to dealing primarily with acute care rather than chronic care needs. We will need to face these limits realistically. It will be necessary to provide reinsurance pools and cost sharing for persons who require long-term or chronic care beyond the acute phase of illness.

What States and Providers Can Do

At this critical time, all of us need to share and take advantage of our mutual experience as we set the course the field will follow over the next decade. The real imperative is – get involved. Many State agencies and provider organizations across the country are already immersed in doing this. Find out who the lead agents are on whatever changes are planned for your State, and make a place for yourself " at the table. " Treatment providers may want to band together as a provider network and contract as a group with managed care organizations. State AOD agencies may find their roles fundamentally changing as, in some States, they take on the function of managing the AOD managed care providers.

Every State AOD agency and treatment provider needs to be informed about the issues and to set their own realistic goals for their system. But there are certain general principles that will apply to those developing new systems in every State. Those principles include:

• All AOD stakeholders need to be working together, and those involved need to include State AOD agency staffs, State Medicaid staffs, treatment providers, and patient advocacy groups.

• All treatment modalities need to be included in the plan, so that a continuum of care is being provided and all levels/types of care are offered.

• Some individuals and programs that have long served publicly funded clients may need special help and protections in adapting to the new managed care environment, such as small freestanding treatment programs and experienced counselors who lack academic credentials.

• The right of the publicly funded AOD client to receive adequate, appropriate, and effective treatment must be preserved in managed care environments, where there are no ready answers about how to treat these complicated, hard-to-reach, and often disadvantaged clients.

We at CSAT are committed to helping States and treatment providers meet the many challenges of this new managed care environment. Over the past year, all the State AOD agencies and many provider organizations have joined with CSAT in a series of activities designed to explore the issues and share our mutual knowledge. We invite all of you to continue this partnership and to share with CSAT your ideas for new and helpful activities or resources.

We have in place, or are now developing, a number of products and activities aimed at assisting with managed care and broader health reform issues. These resources include:

• National and regional workshops – CSAT has held a series of regional State agency workshops and a national workshop for provider organizations from each State. Our technical assistance (TA) program is designed to support workshops on managed care issues on a State or local level and we are now considering the possibility of an interactive satellite conference for State agencies and providers.

• Treatment Improvement Protocols (TIPs) – CSAT is developing three TIPS on issues important to managed care. These TIPs, described in this issue of the TIE Communique, cover patient placement criteria, utilization review, and outcome measures. These TIPs are being developed by independent panels of experts from across the country; they represent consensus statements from practitioners in the field on the best practices or standards for the particular subject.

• Managing managed care contracts – CSAT is sponsoring a new manual for State AOD agencies on how to develop contracts with AOD managed care providers. The issues involved in developing such contracts are discussed in this Communique in the article by Jeffrey Kushner titled, " Managing State Managed Care Contracts."

• Health care reform readiness review – States can now request a readiness assessment as part of their standard technical review. This review, which is part of CSAT ' s Technical Review Program for State AOD agencies and selected pro- viders, identifies technical assistance (TA) needs. CSAT has made a major commitment to allocate resources to respond to these TA needs.

• State needs assessment studies – CSAT is working to include input into these studies from actuaries of States that have already implemented managed care. Currently, CSAT supports needs assessment studies in almost half the States and funds technical assistance to the studies through a National Technical Center at Harvard University.

• Written resources– CSAT has developed a wide range of materials targeted at health reform issues, such as a checklist for providers to use in assessing their managed care readiness, a report on cost studies of AOD treatment modalities, and many others. These resources are listed in the bibliography printed as an insert in the center of this TIE Communique.

• Public advocacy– The Substance Abuse and Mental Health Services Administration (SAMHSA) is just completing " Treatment Works," a new advocacy kit that can help support efforts with State legislatures, the press, and the general public. It will soon be available from the National Clearinghouse for Alcohol and Drug Information (1-800-729-6686). Another product useful for your medical community may be CSAT ' s new TIP on emergency room trauma, which highlights how much of the health care cost offset is related to emergency room treatment for patients with unrecognized, untreated substance abuse.

My thanks to all of you who are working so hard to improve treatment services and to ensure that– under all the new State health care reform models– our clients in the publicly funded treatment system continue to receive appropriate care and a continuum of treatment. I also want to thank all those whose expertise is reflected in their contributions to this special edition of the TIE Communique. Working together, I am confident that we will be able to meet the challenges for our field posed by health care reform in the 1990s.