The Cost Offset Of Psychiatric Care

Healthcare studies on the cost benefit of providing psychiatric care are demonstrating that cost savings in the general medical population can be realized through cost offset. Cost offset is the reduction of utilization in general medical services as a direct result of psychiatric treatment. These studies, across a number of settings, point to the potential for both improved healthcare and significant cost savings through the availability of psychiatric care.

Studies show that at any given time, the prevalence of psychiatric disorders in the general community is 16%.¹ Yet 21% to 26% of general medical outpatients and 30% to 60% of general medical inpatients have mental disorders.^2,3,4,5

Psychiatric illnesses may interfere with treatment for general medical conditions and affect recovery times. Indeed, there is a correlation between patients with psychiatric disorders and an increased length of stay in hospitalizations for general medical conditions.⁶ Reasons contributing to this phenomenon include:

• Depressed patients who somatize may have increased usage of inappropriate services.
• Patients may have excessive anxiety and postpone necessary treatment, exacerbating the general medical condition and necessitating intensified care.
• Those with mental illnesses may not comply with treatment protocols, resulting in less successful outcomes that ultimately require additional care.
• Mentally ill patients who are seriously agitated about their physical condition may do themselves bodily harm.⁷

In the past two decades a number of studies have demonstrated the cost offset provided by psychiatric care. A summary of three follows:

• In the cost offset study conducted by Strain et al.⁷, the authors examined the hospital lengths of stay for hip fracture patients at Mount Sinai Medical Center in New York and at Northwestern Memorial Hospital in Chicago. A comparison was made for orthopedic units in both hospitals between a baseline year when psychiatric consultations had to be specifically requested for patients and an experimental year when the psychiatric liaison intervention was offered to all consenting patients at Mount Sinai and to the patients on one unit at Northwestern. At Mount Sinai, psychiatric interventions increased by 69% in the experimental year. At Northwestern Memorial Hospital, the consultation rate increased by 58%. Lengths of stay decreased at both sites, and Mount Sinai and Northwestern reported one-year savings of $166,926 and $97,361, respectively.
• Labott et al⁸. examined the costs associated with increased healthcare utilization of somatizing patients in a pulmonary clinic. In a review of initial outpatient consultations performed during one year at Henry Ford Hospital in Detroit, somatizers (those without organic pathology) were identified. The authors compared billing records of the somatizers to those of two control groups (those in the general health plan and asthma patients) over the previous four years. Charges for professional services, tests, room use, medication, and other indirect medical services were calculated. Somatizers' healthcare costs were 13 times higher than those of the average patient; asthma patients, who need frequent medical intervention, had costs only 8 times greater than the average patient.
• A study by Hengeveld et al.⁹ assessed the value of individualized, nonspecific psychiatric treatment provided to patients with different diagnoses in a general medical ward, rather than among a homogeneous group of medical patients. Patients who scored 13 or more on the Beck Depression Inventory (BDI) either received no psychiatric intervention (the control group) or were given psychiatric consultations (the consult group). Results show that although length of stay was not decreased, the number of prescribed analgesics and psychotropic medications was decreased in the consult group. Not only were costs reduced, but patients who received psychiatric intervention had lower scores on the BDI upon discharge from the hospital.

As the medical community continues to look more closely at the relationship between successful treatment of general medical patients and the identification of psychiatric disorders in that population, there will continue to be important dialogue on the issue of cost offset. It is clear from the current literature, however, that there is strong evidence to link the appropriate diagnosis and treatment of mental disorders in patients presenting for care in general medical settings to reductions in general medical costs.

References

1. Regier DA, Narrow WE, Rae DS, et al.: The de facto US mental and addictive disorders service system: Epidemiologic Catchment Area prospective 1-year prevalence rates of disorders and services. Arch Gen Psychiatry 1993; 50:85-94
2. Spitzer RL, Williams JBW, Kroenke K, et al.: Utility of a new procedure for diagnosing mental disorders in primary care: the PRIME-MD 1000 study. JAMA 1994; 272:1749-1756
3. Ormel J, VonKorff M, Ustun TB, et al.: Common mental disorders and disabilities across cultures: results from the WHO Collaborative Study on Psychological Problems in General Health Care. JAMA 1994; 272:1741-1748
4. Von Ammon Cavanaugh S: The prevalence of emotional and cognitive dysfunction in a general medical population: using the MMSE, GHQ, and BDI. Gen Hosp Psychiatry 1983; 5:15-24
5. Moore RD, Bone LR, Geller G, et al.: Prevalence, detection, and treatment of alcoholism in hospitalized patients. JAMA 1989; 261:403-407
6. Saravay SM: Psychiatric interventions in the medically ill: outcome and effectiveness research. Psychiatr Clin North Am 1996; 19:467-480
7. Strain JJ, Lyons JS, Hammer JS, et al.: Cost offset from a psychiatric consultation-liaison intervention with elderly hip fracture patients. Am J Psychiatry 1991; 148:1044-1049
8. Labott SM, Preisman RC, Popovich Jr J, et al.: Health care utilization of somatizing patients in a pulmonary subspecialty clinic. Psychosomatics 1995; 36:122-128
9. Hengeveld MW, Ancion FAJM, Rooijmans HGM: Psychiatric consultations with depressed medical inpatients: a randomized controlled cost-effectiveness study. Int J Psychiatry Med 1988; 18:33-43