The Impact of Managed Care on Substance Abuse Treatment

Abstract

This report examines the impact of managed care (MC) and related developments on substance abuse treatment, and evaluates how it has been associated with a decline in the availability of proper treatment for many addicted patients. A trend toward carve-out and for-profit MC organizations is associated with lower financial incentives for intensive treatment than in earlier staff-model and not-for-profit MC organizations. The value of substance abuse insurance coverage has declined by 75% between 1988 and 1998 for employees of mid-to large-size companies, compared with only an 11.5% decline for general health insurance. The shift towards MC has also been associated with a drastic reduction in frequency and duration of inpatient hospitalization, and there is no clear evidence that this reduction has been offset by a corresponding increase in outpatient support. In a survey of physicians treating addiction, the majority felt that MC had a negative impact on detoxification and rehabilitation, and on their ethical practice of addiction medicine.