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–William E. Ford, Ph.D., Vice President and Director, Mutual of Omaha Companies' Integrated Behavioral Services

Reforming the health care system has sparked intense discussion concerning the design, regulation, and funding of health services delivery in the United States. Wherever health care reform is contemplated, a fundamental issue involves how to design and fund a delivery system which provides universally accessible, quality health services at an affordable cost, both now and into the future. Different States have devised different strategies to address the access, quality, and cost issues, ranging from single-payer (California) to health alliance-like systems (Florida). Regardless of the strategy used, most reform plans offer some provision for the coverage of substance abuse as well as mental health services.

Issues To Be Faced

The issues that have faced commercial insurers over the years must now be faced by those seeking to reform health care delivery in general. Many of the problems in meeting the needs of substance abusers through a health insurance system are related to conceptual issues which remain unresolved in the substance abuse treatment system. Further, societal attitudes towards substance abuse as a voluntary condition results in the benefit having a lower priority, or at least being more expendable, than other types of coverage.

On the other hand, the costs to individuals, families, and society of not covering substance abuse treatment are enormous. The implications of this are so great as to make the "leap of faith" to provide substance abuse treatment coverage, given our gaps in conceptual clarity and knowledge, well worth the risk. Finally, health care reform will challenge those of us in the treatment field to continue clarifying our conceptual base, increase our basic knowledge about substance abuse, and to refine our treatment approaches.

Substance Abuse: An Assessment Challenge

Covering substance abuse services as part of a commercial insurance benefit has always provided something of a challenge to insurers. In order for an insurer to reasonably assess risk, the insurer must know the incidence of an illness, the duration of care for the illness, and the costs of the care. Clearly, substance abuse services present risk assessment challenges. These include the difficulties of:

• Knowing when a person actually has a substance abuse problem (the diagnostic challenge)
• Knowing the appropriate level of care at which to treat the disease (the service level-patient matching challenge)

• Knowing what services should actually be covered (the medical necessity challenge)

• Defining an appropriate unit of cost basis (the appropriate unit of service challenge).

Obviously, these challenges relate to unresolved conceptual issues in the substance abuse treatment field: the unreliability of diagnosis; the lack of a clear relationship between diagnosis and treatment; the blurring of the boundaries between medical and social services; and the rather limited scope of treatment interventions (for example, the reliance on didactic techniques as presumed agents of behavioral change).

Social Attitudes: A Challenge to Adequate Coverage

Further, commercial insurance is designed to spread the risk associated with sickness or injury, in contrast to conditions which are voluntary or self-inflicted. Thus, for example, commercial insurers will frequently not pay for injuries related to failed suicide attempts. It is no great leap to understand that, to the extent that substance abuse is perceived as under an individual's control, it is not deemed as appropriate for insurance coverage in the same way that treatment for a ruptured appendix would be.

In the past, these uncertainties about the risk led many commercial carriers to provide no coverage for substance abuse. In response, many States passed mandatory coverage statutes which prescribe a minimum benefit to be provided by a commercial insurer. However, it is important to note that these State mandates do not apply to self-insured employers. These State mandates often led to the development of substance abuse benefits which had either an inpatient day/outpatient visit and/or dollar limit per year or per lifetime. Thus, the risk associated with substance abuse services was capped by the internal limits, again because of the difficulty of assessing the risk in some other manner.

Another complicating factor related to substance abuse (and mental health) services in general is the presence of a publicly funded system which funds up to two-thirds of substance abuse services in the United States and which acts as a safety net for those who exhaust their commercial insurance benefit. Thus, the reasoning goes, no person will truly be denied access to services, regardless of the status of his or her health insurance, because the publicly funded system acts as a "fail-safe."

Problems in Projecting Benefit Costs

In the health care reform debate, some have argued that substance abuse (SA) and mental health (MH) should be covered like any other sickness or injury, that is, without internal limits on the benefit. The argument used is that, if managed care techniques are employed, the cost of additional SA/MH coverage for those who truly need it would be more than offset by cost reductions resulting from utilization management, the use of preferred providers, and other measures.

There have been private actuarial studies commissioned which bolster this view. These analyses, however, are based on a benefit design which has internal limits, again placing an artificial limiter on utilization. There appear to be no actuarial studies which take into account an unlimited benefit, so that the cost impact of providing services for severe and persistent substance abuse and mental illness is truly assessed. That is, current actuarial studies seem to assume the continued existence of the publicly funded safety net.

Finally, most managed behavioral health care organizations (MBHCOs) have provided services primarily to a commercially insured population. It is rare that this population has some of the more severe and persistent problems associated with substance abuse and mental illness. Thus, the experience of these MBHCOs in dealing with the truly severe substance user or mentally ill person is fairly limited and, therefore, should not be the basis on which to generalize about the MBHCOs' ability to deal with the most involved populations. Projections then about the impact of managed care techniques on the cost of services for these populations would necessarily be suspect.

Unresolved Issues of Funding

How Federal health care reform may ultimately provide, and fund, substance abuse services is now unknown. However, early versions of the Health Security Act seemed to take into account the need to expand greatly the financial resources available to the health alliances; these versions planned to use the current State and Federal substance abuse and mental health categorical funding to support health alliance-based services to those currently being treated through the public safety net system. Through the use of such massive amounts of funds, parity between substance abuse/mental health benefits and regular medical benefits might be possible. This, of course, would also mean the end of the present two-tiered system, i.e., the public and the private.

Finally, many proponents of expanding the coverage for substance abuse/mental health services point to the "cost-offset" literature, which indicates that substance abusers have higher health care utilization than do nonabusers and that their usage declines after treatment to a level below their pre-treatment utilization. The argument is that to limit substance abuse treatment only causes higher medical utilization and costs.

Current benefit design which includes internal limits appears to ignore this off-set phenomenon: that limiting treatment by either day amounts or dollar amounts will result in higher medical utilization if substance abuse is untreated or undertreated. Indeed, it is possible that the costs of increased medical utilization may be greater than the costs associated with repeated substance abuse treatment, particularly in less intensive levels of care, such as outpatient services.

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