Medical Cost Offset

Many studies indicate that 50 percent to 70 percent of primary care medical visits are actually related to behavioral functioning and emotional issues which psychologists have the expertise to diagnose and treat. Too often, employers that sponsor employee health benefits pay claims for enrollees' visits to medical doctors and diagnostic tests for body aches and pains and other physical symptoms, such as fatigue, dizziness, insomnia and weight loss, that are actually caused by depression, stress, anxiety, and grief. Rather than pay benefit dollars for unnecessary medical services, employers can reduce the use of medical care by educating employees and their physicians on the appropriate use of psychological services. Equally important, many studies also show that including mental health treatment as part of the overall treatment plan for people with certain physical diagnoses can improve health or halt disease progression, thereby requiring less use of medical resources (Mumford, et al, 1984). Known as medical cost offset, using psychological services reduces the use of medical services, which decreases overall health plan costs, even when considering the cost of mental health treatment (Holder and Blose, 1987). The benefits of properly treating individuals for behavioral health diagnoses are tremendous with regard to improving health and reducing medical costs. Consider the following opportunities in which using psychological services can produce favorable results.

Medical Cost Offset Saves Money ... for the 65% of people with anxiety-related disorders that seek treatment from primary care physicians (Altrocchi, et al, 1994). ... for the 11-36% of all visits to general care physicians involving patients with diagnosable behavioral health problems that can be treated more effectively with psychology and mental health services (Eisenberg, 1992). ... for individuals in need of mental health care who visit a medical doctor twice as often for unnecessary care than persons who receive mental health care (Lechnyr, 1992; Borus and Olendzki, 1985). ... for individuals with chronic medical illnesses, such as diabetes and hypertension, the studies have shown to reduce their medical costs 18-31% after receiving targeted psychological services (Lechnyr 1992). ... for individuals suffering from chronic pain who have reduced their negative psychological symptoms and their clinic visits for chronic pain by 36% (Caudill, et al., 1991).

Employer Steps for Action The benefits of medical cost offset do not appear immediately or automatically, but they serve individuals and employers well in the long-run. Employers who want to take advantage of medical cost offset and increase worker productivity must incorporate strategies into their work-force health and employee benefits objectives that provide opportunities for medical cost offset. Specifically, health benefits plans should encourage early intervention for mental health and chemical- dependency with deductibles and coinsurance levels that do not provide financial incentives for individuals to seek medical care first without considering the possibility of emotional problems. Below are some general steps that employers can take in using psychological services to the advantage of their organization and work force. Identify areas for potential cost reduction and improved productivity by assessing the current work environment. Analyze disability, workers' compensation, and medical and behavioral health care claims to identify areas for potential cost reduction and enhanced employee health. Promote the benefits of good mental health and early intervention to the work force through benefits communications, employee newsletters, workshops, luncheon seminars and other means that are used to reach out to the work force. Communicate with representatives of the health plans covering the organization's employees and dependents, local provider association groups, such as the county medical society, and local hospitals on the benefits of using psychological services to improve health and to promote cost-effective medical diagnostic testing. Evaluate and, if necessary, redesign the employee benefits programs to ensure that health promotion and treatment strategies are included that offer potential for recognizing medical cost offset savings. The information contained in this article is part of the American Psychological Association's "Talk to Someone Who Can Help" public education campaign.  Copyright � 1998, American Psychological Association, All Rights Reserved.