A Comparison of Acute Psychiatric Care Under Medicaid Carve-Outs, HMOs, and Fee-for-Service

This study compares the use of acute psychiatric hospitalization; selected outcomes, including rehospitalization; as well as costs associated with the health maintenance organization (HMO), carve-out, and fee-for-service models as implemented in the Massachusetts Medicaid program between FY1994 and FY2000. This is a longitudinal analysis that primarily uses unduplicated individual data from the Massachusetts Case Mix database. Analyses focus on 56,518 individuals who were psychiatrically hospitalized on acute units within 57 hospitals. They employ Cox regression to compare rehospitalization among the three programs. The hypotheses were strongly supported: HMOs have the most substantial impacts in minimizing service provision, with the carve-out program having an impact intermediate between the HMO and fee-for-service programs. Lower utilization rates were associated with lower overall rates of hospitalization, shorter lengths of stay, fewer repeated stays, and less geographic access and greater displacement of psychiatric patients to medical units. The final model of rehospitalization has an overall predictive accuracy of 59.6%.