The Impact of Managed Care on Substance Abuse Treatment

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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.