| Carve-out plans offer health insurance function for specified types of diseases or services that are being separated from the general insurance plan. State governments, employers, and other payers who have been struggling with the rising mental health costs are increasingly choosing specialty mental health carve-out plans as a solution to reduce costs and increase access and quality. However, carve-out plans apply more intense utilization review techniques, mandate practice guidelines, restrict medications, use a limited panel, and limit expensive services such as inpatient admission in order to reduce expenditures.; This study examines the effects of carve-out plans on treatment outcomes and various treatment quality indicators for patients with affective psychoses. We use the utilization and enrollment information from the MarketScan Research Databases for the years of 1997 and 1998. Results indicate that carve-out patients are more likely to be readmitted to the hospital at least in the short term. Rehospitalization risk between carve-out and non-carve-out patients become comparable only when carve-out plans utilize case managers to manage service delivery to the patients. Further empirical results suggest that case manager effect in reducing risk of rehospitalization in carve-out plans cannot be explained by better follow-up care after patients leave the hospital. Results support mental health advocates who claim that case-managers have assumed more of a gatekeeping function in carve-out plans rather than ensuring effective delivery of services to the patients.; Several policy implications can be depicted from the results. Policy makers should demand answers on how carve-out plans reduce treatment costs and whether there are any long-term consequences of these cost reduction efforts on the patient's overall well being. In addition, better measure of treatment outcomes and quality indicators are badly needed to address the specific nature of mental health problems. More research is required to analyze the means of monitoring health plans' performance and create more informed consumers, which may increase accountability for carve-out plans. |
