A comparison of mental health costs and utilization under three insurance models.

Published reports on utilization and costs of mental health services provided under three insurance models (prepaid, cost-financed and indemnity) reveal consistently greater utilization of outpatient services, lower overall inpatient utilization and comparable costs among prepaid plans in contrast with other two models. The present study suggests that prepaid plans, by facilitating the use of specialty mental health services by a substantially greater proportion of their membership than the other two models, come closer to serving their total population in need as projected by epidemiologic studies. While the data on cost containment are less clear, prepaid plans show a shift in costs away from inpatient and toward outpatient care. However, because of the possibility of bias of differences in population served, treatment philosophy and benefits offered, conclusions drawn from these findings must be tentative until a prospective comparison controlling for these differences can be carried out.