Managed Care and Systems Cost-Effectiveness

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Abstract
Objective: The objective of this study was to assess the change in system cost-effectiveness of depression treatment after the introduction of managed care. Data Sources/Study Setting: The study population consisted of adults ages 18 to 69 living in low-income areas of Puerto Rico. Study Design: Using a random probability sample of the population, 2 waves (1992–1993, 1993–1994) of data were collected before implementation of managed care and one wave (1996–1998) after implementation. Composite International Diagnostic Interview (CIDI)-generated depression diagnoses and Centers for Epidemiologic Studies–Depression (CES–D) scale of depressive symptoms scales were used to assess depression. Data Collection/Extraction Methods: Effectiveness of treatment was defined by guideline standards and experts’ assessment of the probability of remission resulting from treatment. Costs were measured by assigning representative prices to each treatment modality. Difference-in-difference (D-in-D) estimators were used to assess the impact of managed care on the effectiveness and costs of treating depression at the system level for the entire population. Principal Findings: System cost-effectiveness improved slightly after the introduction of managed care, with diminished costs but no significant improvements in effectiveness. Conclusion: Cost-effectiveness can be measured at the population level to assess system changes. Additional incentives and system realignments beyond utilization review and diminished treatment costs are necessary to attain a more cost-effective system of care.