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Most psychiatrists agree that securing insurance coverage for psychiatric treatments at parity with those for other medical disorders is a desirable goal. Where psychiatrists disagree, however, is over the definition of parity, according to Howard Goldman, M.D., Ph.D.
Goldman, who is professor of psychiatry and director of mental health policy studies at the University of Maryland School of Medicine, spoke on "A Short History of Parity: What Do We Really Want?" at APA’s Institute on Psychiatric Services in October in Washington, D.C.
Parity has been a topic of "discussion and analysis for at least 15 years," he noted. "On balance, the pursuit of parity as a policy goal has been a good thing," but it has resulted in "more of a rhetorical victory than a substantive change."
Parity is "no longer sufficient" to accomplish the goal of fair, comprehensive, and appropriate psychiatric care, but it is still necessary, Goldman contended.
Economic principles, although not entirely controlling, are critical to clear thinking about parity, according to Goldman. They "are not fantasies" lacking relevance to the real world. Public health principles are equally important, however, he added.
Although mental health services are both effective and, in economic terms, "cost-effective," the mismatch of patients to services has created the perception that they are often not effective, he said.
"The trick is figuring out ways to get the right services to the right people," he asserted. "It’s no longer acceptable [for psychiatrists] to do what we feel like doing because that’s the way we were trained," said Goldman. The profession has a public responsibility to match psychiatric services to patients correctly.
Politically, APA and psychiatry will do better if they understand that the public views some aspects of mental health services as deficient, Goldman said. It is important to understand why.
The concept of "moral hazard" is critical to understanding this public perception, according to Goldman. This concept implies that certain services are highly price sensitive; hence, generous insurance coverage tends to stimulate more utilization of such services. There is evidence that psychiatric services are more price sensitive than general medical services, according to Goldman.
Another key concept is that of "adverse selection," which means that people tend to "seek [coverage] that has services they think they will need."
Mandates are designed to equalize benefits and thus minimize adverse selection, as well as to correct discriminatory benefits originally structured to minimize moral hazard, said Goldman.
By mandating parity coverage of psychiatric services, every insurer has "the same competitive disadvantage with regard to moral hazard," he noted.
There has been staunch opposition to parity historically, he noted. Had there not, there would be no barriers to or limits on provision of psychiatric services.
One argument against parity is that it requires society at large to subsidize a service more likely to be used by the affluent, said Goldman. This argument is based on data showing that affluent people are, indeed, more likely to use psychiatric services. Whether that pattern would change over time if such services became universally accessible is unknown.
Parity is also a double-edged sword because some health plans provide coverage for general medical conditions that would not fit well with the kind of extended care needed to treat severe and persistent mental illness. Support and rehabilitative services, for example, might not be provided under a parity model based on nonpsychiatric medical care, he explained. In this case, true parity might result in inadequate psychiatric services, according to Goldman.
If, however, there is to be an intelligent discussion of parity, the parties employing the term must agree on a definition, said Goldman. The definition that he prefers is "using the same rules" for providing psychiatric services as for other medical services. By this definition, parity means fair and equitable application of the rules, but not necessarily the same coverage, said Goldman.
The term "nondiscriminatory" better describes the goal of psychiatry than does the term "parity," Goldman said, in that it means the system should not arbitrarily limit psychiatric services when treatment is deemed medically necessary. The sticking point, he noted, is how medical necessity is defined.
The psychiatric profession suffers at times from the "ostrich syndrome," in which all opposition is conceived as "based on prejudice and stigma" rather than legitimate criticism, Goldman said.
Recently, there has been the emergence of "the Faustian bargain," in which parity is deemed affordable under managed care. But the implication is that parity might not be affordable absent the externally imposed constraints of managed care, said Goldman.
Despite protests against currently inadequate coverage of psychiatric services, "nobody has really addressed the question of what the right level" of coverage is, said Goldman. By using actuarial studies showing that parity under managed care is affordable, APA and other organizations advocating parity have implicitly accepted the Faustian bargain, he contended. Yet it is far from clear that "parity" under managed care would provide adequate access to psychiatric services.
Although it is rarely acknowledged, said Goldman, those familiar with prior actuarial estimates of the cost of parity absent managed care may fear that the costs of such a policy, were it implemented, would be so high that it would create a backlash against coverage of psychiatric services.
APA Director of Government Relations Jay Cutler, J.D., challenged Goldman’s analysis of APA’s advocacy of parity. "APA’s support of parity is a guiding ethical and legal principle, not a political tactic," said Cutler. "We advocate parity or nondiscriminatory coverage - a distinction without a difference - because it is right for our patients, period," he said. "In reality, the bargain with the devil facing psychiatric patients, and a ‘Faustian bargain’ they were never a party to, is that as patients they currently have the absolute worst of both worlds: managed care and concomitant discriminatory limits on the scope, coverage, duration, and cost-sharing for psychiatric services within most managed care plans."
The question of appropriate standards for management of psychiatric services and the impact on current actual practices on cost estimates for parity are "related but not mutually exclusive," Cutler said. "APA will continue to use real-world data that reflect contemporary market practices as we advocate for parity, while at the same time vigorously lobbying for legislation at the federal and state levels to protect patients from abusive managed care practices," he concluded.
The victories to date in broadening insurance coverage of psychiatric services have been mainly rhetorical, said Goldman. The Mental Health Parity Act of 1996, for example, protects patients against arbitrary and discriminatory annual and lifetime limits, but changes nothing about how each episode is managed. In fact, most health care reform efforts have shifted from the federal level to the states, he pointed out.
"Each time we resurface this political strategy, it is turned over to actuaries and statisticians to see if we can afford it," said Goldman. "What it’s doing is providing more information to bolster the Faustian argument."
But although the victories have been more rhetorical than substantive, they can be used to amplify the increasing public and political perception that psychiatric services should be accessible, affordable, nondiscriminatory, and fair, he concluded.