- National Institute of Mental Health (NIMH) Training Program in Mental Health Services Research at the Heller School, Brandeis University, in Waltham, Massachusetts. Donald Shepard is research professor there and adjunct lecturer at the Harvard School of Public Health
- Department of Public Management, Suffolk University, in Boston
- Substance abuse group at the Brandeis University Institute for Health Policy
- Heller School; she was formerly a regional director in the Office of Children in Massachusetts
Massachusetts was the first state to introduce a statewide specialty mental health managed care plan for its Medicaid program. This study assesses the impact of this program on expenditures, access, and relative quality. Over a one-year period, expenditures were reduced by 22 percent below predicted levels without managed care, without any overall reduction in access or relative quality. Reduced lengths-of-stay, lower prices, and fewer inpatient admissions were the major factors. However, for one population segment—children and adolescents—readmission rates increased slightly, and providers for this group were less satisfied than they were before managed care was adopted. Less costly types of twenty-four-hour care were substituted for inpatient hospital care. This experience supports the usefulness of a managed care program for mental health and substance abuse services, and the applicability of such a program to high-risk populations.