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Meager Spending on Behavioral Health Treatments Appears to Result in Higher Healthcare Costs

Since the Covid-19 pandemic began this past March, we have all been forced – seemingly on a week-by-week basis – to adapt to whatever the ‘new normal’ has been prescribed for us at work, home and in our respective communities.

For many of us, change from the status-quo has been difficult to confront and accept. In fact, living in a perpetual ‘snow globe’ that is constantly shaken keeps us from digging out of a never-ending blizzard of newness. ‘Taking things day-by-day,’ a commonly-used phrase, is perhaps an understandable approach for each of us during these uncertain times.

It is no surprise then, that our behavioral health has been adversely impacted during 2020.

This Should be Important to Employers because…

A direct result of people with behavioral health conditions – such as anxiety, depression or a substance abuse disorder – can relate to low job performance, whether it be through absenteeism, presenteeism, or negatively impacting relationships with co-workers and peers.

Employers know that anxieties – regardless of the source – cause stress in the workplace and can negatively affect the entire business operation. Some undesired effects of this stress include:

  1. Higher Employee Turnover – Chronic stress may lead to high employee turnover because job satisfaction is compromised, and employees don’t feel fulfilled or satisfied with their work. Hiring and training of employees is expensive, both in time and money.
  2. Missed Deadlines – Low job performance equates into missing key deadlines, which can reduce overall organization effectiveness with customers, etc.
  3. Overall Company Reputation Suffers – An organization’s highly-regarded image – carefully earned over years and decades – cements the treasured trust given by the public. However, having a high rate of employee turnover may taint the perceptions of prospective employees, who may question if the organization is deficient in offering the ‘right’ kind of engaging and collaborative workplace culture.

Pandemic, Civil Unrest and Political Divide

According to a Boston University study published in the medical journal JAMA Network Open, anxiety and depression are rising among Americans due to the Covid-19 pandemic. Half of U.S. adults surveyed reported at least some signs of depression, such as hopelessness, feeling like a failure or getting little pleasure from doing things. For many, the problem is considered mostly angst rather than full-blown psychiatric illness, but it still requires genuine professional help.

Feelings of isolation and interpersonal concerns related to physical distancing fuels anxiety and depression. The study found the symptoms to be most common in young adults, low-income study participants and those who lost jobs or experienced Covid-19 deaths of friends and relatives. Even though the study was performed prior to the recent spike of civil unrest beginning in late May, other research suggests that racial unrest also contributes to angst and depression symptoms.  Additionally, the lack of civil discourse found in our political system causes anxiety for a growing number of Americans.

A New Source of Concern for Employers – Being Penny Wise, but Pound Foolish

Consulting firm, Milliman, recently analyzed commercial insurance claims for 21 million people and determined that employers and commercial insurers spend meager amounts of money on behavioral health treatments, even though people with behavioral health conditions tend to have higher healthcare costs from other medical conditions.

Is this a causality dilemma also known as the ‘chicken or the egg?’ Which comes first, the behavioral health condition(s) or other non-behavioral medical condition(s)?

At least with the Milliman study, there appears to be little consensus.

A key finding from the Milliman report was that 27 percent of the people who had a behavioral health condition (e.g. anxiety, depression or a substance use disorder) in addition to other medical problems accounted for 57 percent of the total annual healthcare costs across the entire study population. In other words, the annual costs for people who had a behavioral health condition were about 3.5 times higher than costs for people WITHOUT those conditions.

Under this context, it was determined that spending on behavioral health treatment was a mere fraction (4.4 percent) of total healthcare costs for the 21 million people. In fact, half of people with behavioral health issues had less than $68 of total annual costs for behavioral health treatment. Another 25 percent of behavioral patients had very limited spending on behavioral treatment, amounting to $68 and $502 per year.

The study’s findings may suggest that to reduce total healthcare costs, payers must ensure that people with behavioral health conditions receive appropriate treatment. Oftentimes, behavioral conditions exacerbate medical conditions, causing the cost for medical conditions to increase much greater than for those without behavioral conditions. Effectively coordinating treatment for those who have both behavioral and medical conditions may significantly help reduce the overall costs.

Most health insurers include behavioral health as a covered benefit, but according to a 2019 study by the Congressional Budget Office, commercial insurers and Medicare Advantage plans pay in-network behavioral health providers lower rates than Medicare – about 13 percent less for common mental health services. Because of this, behavioral health providers are inclined to stay out-of-network, making treatment more expensive for insured patients, who may forgo seeking appropriate care. A shortage of behavioral providers certainly contributes to the problem, but telehealth can help increase the availability of care.

It certainly does not help that, due to the pandemic, more employees are working remotely making it difficult to gauge their behavioral needs and deficiencies.

This study was commissioned by The Path Forward for Mental Health and Substance Use and funded by the Mental Health Treatment and Research Institute LLC. The National Alliance of Healthcare Purchaser Coalitions was one of the groups that launched the Path Forward initiative, and you can learn more about this study here.

Going Forward

Employers should work with their insurers and community health providers to explore new ways for employees and their family members with behavioral conditions to receive the most appropriate care from the provider community.  Perhaps consider using the collaborative care model in which primary care clinicians work closely with care managers and psychiatric consultants to care for patients and to monitor their progress over time.

Making your workplace less stressful can include keeping your lines of communication open.  Perhaps offer ‘lunch and learn’ sessions to talk about how to manage work tasks effectively, help set boundaries to separate work from family life, and develop an overall culture of wellbeing for all employees.

Carefully bridging the gap between mental and physical health is certainly worth the effort.

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