| Contact: |
Prabhu Ponkshe, SAPRP 703-918-4860
Susan Laine, Burness Communications 301-652-1558
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| Title: |
SUBSTANCE ABUSE TREATMENT CAN REDUCE TOTAL MEDICAL COSTS FOR MEDICAID PATIENTS
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| Principal Investigator: |
Lawrence Walter, M.A.
, Senior Data Consultant
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| Grant Recipient Organization: |
Kaiser Foundation Research Institute
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WASHINGTON, DC, July 28, 2005-- Providing substance abuse treatment for Medicaid patients through comprehensive managed care programs can reduce total medical costs by 30%, dropping them from $5,402 to $3,627 per patient per year, according to a new study reported in the July issue of the Journal of Behavioral Health Services & Research.
The study also found that prior to entering outpatient substance abuse treatment, Medicaid patients enrolled in a managed care program incurred medical costs 60% higher than non-Medicaid patients, according to study author Lawrence Walter, an investigator with the Kaiser Permanente Division of Research., based in Oakland, California. Walter worked on the study with his colleagues, Steve Allen, Ph.D., and Lynn Ackerson, Ph.D.
The findings of this study could have significant implications for states trying to reduce their burgeoning Medicaid expenses, and for managed care companies struggling with high risk groups like Medicaid enrollees.
“This study offers a counter-example to the prevailing lack of substance abuse care for Medicaid patients through managed care. The Kaiser model used for this study provides integrated, comprehensive health benefits to Medicaid enrollees,” Allen said.
“Previous studies have shown similar reductions in health care costs as a result of providing substance abuse treatment, but this study also showed that the reductions in medical costs are across all areas, including hospital stays, visits to the emergency room and medical clinics. The reductions in cost are not because of a shift in costs from one area to another,” Walter said.
The Kaiser study’s results are based on a comparison of 197 Medicaid patients and a matched group of non-Medicaid patients. Both groups were observed for one year before and three years after they began substance abuse treatment at Kaiser’s Vallejo Chemical Dependency Recovery Program in Oakland, CA. The patients were similar to the national Medicaid population in terms of ethnicity and gender and also similar to Medicaid patients in managed care programs. The study was funded by the of the Robert Wood Johnson Foundation’s Substance Abuse Policy Research Program.
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Medicaid costs/add one
Medicaid is a joint federal and state health insurance program for low-income people, providing health coverage and long term care to more than 41 million individuals. Currently Medicaid programs in all states except Alaska use some form of managed care.
This study showed that medical costs for the year before substance abuse treatment were $5,402 for Medicaid patients and $3,377 for non-Medicaid patients with substance abuse problems. Those costs dropped to $3,627 and $2,525 for the two groups.
“Average inpatient stays dropped from about two days per year to one day per year for Medicaid patients after they received treatment for drug and alcohol problems. The non-Medicaid patients also dropped their inpatient stays from about one day per year to less than half a day per year,” according to Allen.
Emergency room visits among Medicaid patients also dropped from more than two per year to one per year. Visits to medical clinics dropped from 8 per year to less than seven.
With states trying to control their Medicaid budgets, managed care companies have become increasingly sensitive to the financial risks of covering groups of individuals, like Medicaid enrollees, that are known to have higher levels of chronic health problems. Many managed care companies not focused on Medicaid have begun to abandon the Medicaid market altogether, which results in loss of quality care for publicly insured patients. Some Medicaid contracts with managed care companies provide separate coverage for substance abuse treatment, but this creates problems in integrating the medical care with substance abuse care.
The Substance Abuse Policy Research Program (www.saprp.org) of the Robert Wood Johnson Foundation is a $54 million program that funds research into policies related to alcohol, tobacco and drugs.
The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 30 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. Helping Americans lead healthier lives and get the care they need—the Foundation expects to make a difference in our lifetime. For more information, visit www.rwjf.org.
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Medicaid costs/add two
Kaiser Permanente, founded in 1945, is a non-profit integrated health care organization, with physicians, nurses and staff working in collaboration to provide high quality care to patients and address the health care needs of communities served by the organization. The Kaiser Permanente Northern California Region serves almost 3.2 million members. It includes 5,000 physicians in The Permanente Medical Group (TPMG) and about 54,000 employees. The region has 19 major medical centers. Each year, Kaiser Permanente donates about $300 million to a variety of community programs and agencies in Northern California.
The Kaiser Permanente Division of Research conducts, publishes, and disseminates epidemiologic and health services research to improve the health and medical care of Kaiser Permanente members and the society at large. It seeks to understand the determinants of illness and well being and to improve the quality and cost-effectiveness of health care. Currently, DOR’s 400-plus staff is employed in more than 220 epidemiological and health services research projects. The work is supported primarily by federal, state, and other outside institutions, as well as by The Permanente Medical Group and Kaiser Foundation Health Plan's Community Services funds. DOR’s total funding level exceeds $30 million.
http://www.kaiserpermanente.org
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