Bad Therapy:

Managed Care, Psychiatry, and The Institute

by Lawrence D. Blum, M.D.

(A slightly edited version of this column was published by the Philadelphia Inquirer on February 13, 1997, under the title “How HMO’s Skirt Managed Care.”)

A Philadelphia institution has died. After 155 years of dedication to the humane and progressive treatment of mental and emotional illnesses, The Institute of Pennsylvania Hospital has closed all but a few of its wards and on February 14th will be officially sold to a for-profit company. Until its final gasps, treatment at The Institute was anchored by the doctor-patient relationship; understanding the patient as a person was central. The Institute was a “home for the heart” for patients, staff, and doctors, one of very few premier psychiatric hospitals where patients could go for individually-tailored, caring, comprehensive, confidential treatment by highly-trained professionals.

Many factors contributed to the demise of The Institute, but most important is for-profit, managed care. Managed care, which is almost entirely unregulated, severely limits treatment of mental illnesses. Managed care has been devoted to making profits from populations; The Institute, oriented to caring for individuals, could not survive in this new environment.

Ironically, The Institute has died while psychiatry is at its scientific zenith, with substantial advances in both biological and psychological understanding of mental illnesses. Further, last year Congress passed the Domenici-Wellstone mental health “parity” bill, which establishes a principle of equal insurance treatment of mental and other illnesses. This law represents progress from the medieval conception of mental illness as demonic possession, but falls short of the rational, scientific consideration accorded other ailments. In fact, the bill is so full of loopholes it protects few people. Most of all, it does nothing to regulate managed care.

Managed care’s cutbacks of treatment of mental illnesses, greater than those anywhere else in medicine, are predicated on stigma and silence. Even though recent years have brought substantial lessening in stigmatization of mental illness, shame and stigma still reign. Stigma starts within each of us; we are often ashamed and guilty about many of our innermost thoughts, feelings, and fantasies. Thus, a person who would seek a top-notch cardiologist for a (physical) heart problem will, ashamed and anxious, sheepishly accept the services of any “therapist” or “counselor” for (emotional) heart problems.

Stigmatization of mental illness has contributed to a climate in which managed care companies have been able to reduce dramatically the help available for emotional illness with little public protest. Although outpatient psychiatry, with many effective treatments and no expensive tests or procedures, has been a particularly efficient area of medicine, managed care has savaged it. Typical indemnity insurance companies used to budget 8% of expenditures for treatment of emotional illnesses; managed care companies reduce this figure to 2%. While managed care has not been shown to reduce overall healthcare costs, it has excelled at transferring money from clinical care to investors, executives, and administrators.

How does it do this in the mental health arena?

First, primary care doctors in managed care systems often have financial incentives not to make referrals, to psychiatrists or any other specialists.

Second, many managed care companies hire the cheapest and therefore often the least trained, least experienced therapists available.

Third, most managed care companies prefer to hire personnel with very limited views of treatment, who are oriented only to crisis intervention. I recently asked the psychiatric director of a large mental health managed care company how he handled cases in which patients needed treatment beyond the few sessions allowed by the company. Astoundingly, he told me that in his years of experience such a situation had never occurred!

Fourth, what is promised is not necessarily provided. While twenty sessions may be available on paper, I know of therapists who were told that seven sessions per client was the break-even point, and that they should keep their average number of sessions per client low if they wished to remain employed. In instances in which a patient may be permitted to see the physician (i.e., the psychiatrist), as little as fifteen minutes per month may be budgeted. Hospitalizations, when permitted, are kept extremely brief.

Fifth, if the therapist’s views of what should be done for the patient are insufficiently myopic, managed care has additional means to encourage “efficiency.” Many plans require frequent review of psychotherapy by an outside party, often a person of lesser training or diminutive clinical skill. This reviewer determines whether additional sessions are “medically necessary” and requires the psychiatrist or therapist to justify, sometimes to beg for, additional sessions a patient may need. Some systems have financial incentives for reviewers to limit care. Questions about the reviewers practicing medicine without licenses and without seeing the patients are finally being raised in some locations.

The third party review often jeopardizes confidentiality, requiring disclosure of detailed personal information to unknown parties and computer systems, intimidating both patients and doctors. But the intimidation extends further. While thousands of mental health professionals vociferously denounce managed care abuses, many keep silent, feeling they must appear “managed care - friendly” in order to remain employed.

Fortunately, for many people a modest amount of sympathetic discussion is sufficient. Unfortunately, many who need treatment conclude erroneously after their managed care sessions that they have had treatment and either it doesn’t work or they are beyond help. HMO’s and managed care companies should state they provide mainly crisis intervention and not any substantial treatment. And the public needs to know there are alternatives to managed care. Managed care may have helped to kill The Institute, but those who worked and trained at The Institute, as well as many others, continue to uphold its values of caring, confidential, and comprehensive treatment.