Patients remain the losers under managed care

February 27, 2008

Most psychologists have had negative managed care experiences, but a recent particularly malignant one elicited more horror than most. It also begged for the development of fresh solutions to managed care as it currently exists. Consider this case situation: A 24-year-old female financial services employee sought treatment for severe post-traumatic symptoms of five years duration. In 1987, she was brutally date-raped by a man she had known for more than a year. Coming from a conservative family in which talk of pain or of feelings in general was discouraged, she had resisted seeking assistance for years and discussed the incident with no one. Eighteen months prior to entering outpatient psychotherapy, she attempted suicide with tranquilizers and alcohol. Her physician prescribed psychotropic medications, which were ineffective and were quickly discontinued. When the suicidal thoughts recurred, and nightmares and social withdrawal were approaching extreme levels, she finally sought a referral through her company’s EAP.

In completing the outpatient treatment report of the well-known, national preferred provider organization through which she had benefits, 30 sessions were requested initially, and a request was made for treatment to be provided on a two time- per-week basis. Such frequent treatment was required to monitor for suicidality and to quickly build a therapeutic alliance. Hospitalization was neither indicated nor requested. Moreover, she was terrified of psychiatric hospitalization, was not holdable, and would have experienced such iatrogenic shame from the experience that the issue would have only been pushed if suicidal intent was imminent.

Rather than approve what seemed a reasonable, if conservative, treatment plan, the case manager, who was himself a licensed psychologist, offered to authorize either weekly psychotherapy or psychiatric hospitalization. The cost differential between these interventions was apparently irrelevant. When the request was pressed, the case had to be reviewed by another psychologist. When the reviewer was helped to see the absurdity of the situation, he reluctantly authorized one month of twice-weekly psychotherapy. The patient had been symptomatic for five years! As one would anticipate, this experience stimulated some thoughts about managed care and a few ideas about solutions.

Managed care appears to have evolved out the belief that psychological services were not being equally provided and that practitioners were exploiting patients. While there could certainly be some truth to both these assertions, the managed care solution, as it generally exists today, appears no better. Now, instead of the patient dollar being potentially misused by providers and unwitting consumers/ patients, a crop of managed care companies, which are rather large and profitable, have emerged. Now, less money goes to the practitioners and more to these large institutions. A recent article by APA Practice Directorate Executive Director Bryant Welch, J.D., Ph.D., reported that the CEO of one managed care company earns over 5)1 million per year. The managed care firms stand to profit by underutilization of all services. As the above example dramatically illustrates, patients remain just as much the losers, if not more so, than they did under the standard indemnity system.

A few immediate, and admittedly incomplete, solutions come to mind. First, and perhaps foremost, efforts need to be made to educate patients about what has happened to their benefit-dollar. Rather than being exploited by potentially greedy and uncaring practitioners, they are now at risk of being exploited by potentially greedy and uncaring managed care companies. The citizens of this country at one time feared a communist takeover; ,in the realm of mental health, managed care offers a similar kind of central control and loss of individual autonomy that it was feared communist regimes would produce more globally. The managed care system is decidedly unAmerican in that the power lies not with the individual/consumer, but with some larger entity that is supposed to judge the legitimacy of the consumer’s illness, needs or desires. Perhaps educating the general public about the abuses of managed care could be placed on CPA’s agenda, if it is not already.

The second potential solution would involve using APA ethical guidelines as a means of taking action against unethical case reviewers. Again, in the above example, it was grossly unethical to refer a suicidal individual for inpatient hospitalization when two or three-times-per-week psychotherapy is in fact indicated. The case manager violated several APA ethical guidelines, including the general principles of “professional and scientific responsibility” (principle A) and “concern for others’ welfare” (principle E). More broadly, given the complexity of most mental disorders, can any psychologist ethically evaluate mental health services based on a review of a form or a telephone call? When treatment restrictions are unethical, seeking redress through informal and formal filing of ethical complaints via CPA or APA may be useful in insuring proper treatment.

The final idea concerns the need for psychologists to band together to deal with case management practices. If there were enough cohesion among psychologists, then providers would be in a better position to have input, if not outright control over, case management and utilization review procedures. The situation is not unlike that of unorganized labor and “big business,” with psychologists being in the role of unorganized labor. There have been instances of providers being “black-listed” for not providing brief enough forms of treatment, failing to file forms in a timely enough fashion, or other mild infractions; isn’t this reminiscent of non-unionized workers being unjustly laid off or terminated because other workers were eager to take their jobs?

It behooves us to remember that these companies make a profit on the services we provide, and therefore they need us to provide them. Until the whole system is dismantled or altered, and (in accordance with the dictates of our democracy) individuals are empowered to make decisions about their care without having a central agency in which they have no representation control those decisions, then every effort should be made to insure that the interests of our patients are respected. So, rather than advocating for psychologists or against the interests of the insurance companies and managed care organizations, perhaps psychologists could join together as advocates of those who need our services by educating them, insuring that the ethics of our profession are upheld by all its members, including those who work for managed care companies, and finally by coming together as a cohesive unit to work toward positive changes in case management and other managed care procedures.

Published as:

Karbelnig, A. (1995). Patients Remain the Losers Under Managed Care. The California Psychologist, 25 (6), 10.
(Dr. Karbelnig, a past Member of the CPA Board of Directors and current Chair of the Ethics Committee of the San Gabriel Valley Psychological Association, practices psychoanalytic psychotherapy and forensic psychology in South Pasadena, California.)

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