Today’s post is the third in a series on Hot Topics in Children’s Mental Health originally offered in recognition of Mental Health Month, National Children’s Mental Health Awareness Week (May 6-12), and National Children’s Mental Health Awareness Day. We’ll kick off Children’s Mental Health Week by focusing on the challenges families face when seeking to access services for their kids through their health insurance benefits. Post updated January 19, 2013.

My guess is that most of our blog’s readers have purchased a local Entertainment book at least once. My wife and I are “foodies”…our weekly date night is spent going out to eat. Before we had kids we’d frequent a local Italian restaurant in the Entertainment book that allowed patrons unlimited use of the card for the “buy one, get one free” dinner special. We stopped buying the book when the restaurant discontinued this very generous policy because there weren’t any other restaurants in the book we wanted to check out. Our favorite  places aren’t in the Entertainment book. When the food is great, the tables are filled and restaurants don’t need to offer a big discount to entice people to come in.

Your health insurance card is designed to work like the card from the Entertainment book. This often results in big problems for families needing mental health care.

What we’ve experienced as “managed care” for the last two decades arose from the recognition of excess capacity in the healthcare system, especially hospital beds. When employers began to pressure insurance companies to control costs, insurers initiated utilization review (limiting bed days, sessions, prior authorization) to control costs. Aggressive utilization review produced more excess capacity in the system. The insurance companies then demanded deep discounts and all products, all-services contracts from hospitals in exchange for a steady flow of insured patients.

This system worked reasonably well for most services, but as time passed problems emerged. The rate structures in insurance contracts (largely based upon Medicare rates) result in some services generating enormous profits to the hospital. Heart surgery, orthopedic surgery, outpatient surgery and cancer care are big money makers. Mental health services for kids don’t make money. The insurance contracts virtually guarantee that children’s mental health will lose money (see previous post).

For a time, the highly profitable services at the hospital were able to subsidize the money losers. As belt-tightening continues, hospitals can’t continue to provide services that lose money. Will a hospital administrator charged with containing expenses hire a child and adolescent psychiatrist (or therapist) to see outpatients when the professional can’t possibly see enough patients during the day under the terms of the insurance contracts the hospital is saddled with to cover their salary, benefits and overhead costs? Note: I recently spoke with an administrator from a major teaching hospital in our area who told me that no one in their psychiatry/psychology departments was capable of covering their salary and overhead through direct patient care.

What alternatives can families pursue when the large healthcare systems promoted by both government and the insurance industry don’t make an important service available?

Families with private insurance face challenges using the community mental health system. Generally, non-profit mental health centers are required by their contracts to offer their most favorable rates to the government…Medicaid and Community Mental Health Boards. I’ve served as Board President and Medical Director respectively at two large community mental health organizations in our region. When I was involved with the public system, our Medicaid contracts were based upon an accounting formula that reimbursed the agencies for the actual cost of delivering services. We couldn’t contract with private insurers because those insurers typically paid less than half the cost of delivering the services provided. Accepting insurance contracts would have resulted in the use of public funds dedicated to indigent care to subsidize discounts for middle-class families with insurance who wouldn’t otherwise qualify for reduced fee care.

That brings us to the remaining independent practitioners. Finding good primary care physicians to participate in insurance networks isn’t usually a problem, because of supply and demand. We take our kids to an outstanding pediatric practice. But there are three or four other excellent pediatric practices within a short drive of our home. If our pediatricians quit accepting insurance, their patients would have several attractive options of practices in their insurance network. Specialties in short supply… like child psychiatrists and child therapists…constantly deal with overwhelming demand and have no incentive to contract with insurance plans.

Suppose someone approached you with this offer…

We want you to come to work for us. We’ll pay you a third to a half of your hourly rate while our executives make millions in bonuses.  Maybe you’ll get your paycheck in a month. Maybe you’ll get your paycheck in three months.  Actually, you’ll need to hire and train someone to collect your paycheck from us. We’ll only pay you for the time the child is sitting in your office…forget about the two hours you spent at school convincing them to do the testing for a learning disability that we refuse to pay for. Or the thirty minutes on the phone at 11:00 at night that averted the need for a trip to the emergency room. Would you sign up for that deal? Who would?

• Someone who desperately needed the work.

• Someone who recognizes their services aren’t worth the rates they charge.

• Someone who is altruistic and doesn’t want the kid to be hurt by the policies of the parent’s insurance company? Unfortunately, most professionals with that mindset already work for the community mental agencies we discussed earlier or work for a large hospital system where (for the time being) their services are subsidized by charity or profits generated by other departments.

Back to our entertainment card/insurance card parable…

Large hospital systems are the restaurants in the Entertainment book that accept the card for lunch and dinner but choose not to open for breakfast when the family needs breakfast. Why open for breakfast when the breakfast business can’t sustain itself?

Community mental agencies operate in states where discount cards are prohibited by law. The family’s insurance card is of little or no value there.

Independent practices are like the small restaurants in the Entertainment book. In each city, there are a few exclusive restaurants everyone talks about that choose not to be in the book. Occasionally, a great restaurant appears in the book…after the restaurant attracts lots of people and reaches capacity they drop out of book. A few restaurants stay in the book because they want as many people as possible to try their food at a low price and don’t need the money to attract new chefs or to expand their restaurant. Other restaurants stay in the book year after because they have no other way to fill tables.

The end result: All too often, families can’t find what they need in the book…although they pay a great deal more money for the book that comes with their insurance card than they do for the Entertainment book.

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