Alternate Insurance Arrangements and the Treatment of Depression: What Are the Facts?

Ernst R. Berndt, Richard G. Frank, Thomas G. McGuire

NBER Working Paper No. 5813
Issued in November 1996
NBER Program(s):Health Care, Health Economics, Productivity, Innovation, and Entrepreneurship

Using insurance claims data from nine large self-insured employers offering 26 alternative health benefit plans, we examine empirically how the composition and utilization for the treatment of depression vary under alternative organizational forms of insurance (indemnity, preferred provider organization networks or PPOs, and mental health carve-outs), and variations in patient cost-sharing (copayments for psychotherapy and for prescription drugs). Although total outpatient mental health/substance abuse (MHSA) expenditures per treated individual do not vary significantly across insurance forms, the depressed outpatient is more likely to receive anti-depressant drug (ADD) medications in PPOs and carve-outs than under indemnity insurance. Those individuals facing higher copayments for psychotherapy are more likely to receive ADD medications. For those receiving ADD treatment, increases in prescription drug copay tend to increase the share of ADD medication costs accounted for by the newest (and more costly) generation of drugs, the selective serotonin reuptake inhibitors.

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Document Object Identifier (DOI): 10.3386/w5813

Published: in American Journal of Managed Care, vol.3, no.2, pp.243-252, 1997.

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