What can be done for troubled teens

In 1986, The Southland Corp., which operates the nationwide chain of 7-Eleven convenience stores, reviewed its claims records and was alarmed to find eight insureds "dangerously close" to the $50,000 lifetime limit on benefits for mental health care. Even more disturbing, two of the cases--25 percent--involved adolescent dependents, troubled teens who had reached the lifetime limit when their lives had barely begun.

Southland, like many other companies, was facing a grim and increasingly expensive reality: What used to be a very personal nightmare--the mental collapse or substance addiction of a child--is fast becoming a national epidemic with frightening implications for companies trying to control rising health care costs.

According to the National Center for Health Statistics, overall discharges from psychiatric units for those under age 18 swelled 43 percent between 1980 and 1987, from 126,000 to 180,000. Suicide now leads all causes of death for people between the ages of 13 and 24.

Roughly eight million youngsters, about 12 percent of those under 18, need mental health services, according to the National Association of Private Psychiatric Hospitals, Washington, D.C.

"Mental health and substance abuse costs typically represent the largest increase in an employer's benefits package today," says Gino Nalli, a health benefits consultant with The Wyatt Co.'s Washington, D.C. office. "It's not unusual to see 15 percent of an employer's health care dollars going for these services and, in some cases, it's above 20 percent." The largest chunk of those services, according to Nalli, is for adolescents.

Not only are adolescent psychiatric problems expensive to treat, they also play havoc with a parent's productivity in the work place. Increased absenteeism and loss of overall sense of well-being by employees is common. "Parents become almost dysfunctional," says Kerry Clemmons, senior vice president for human resources and corporate development at the John Alden Life Insurance Co. in Miami.

Why is this happening now?

Several factors appear to be behind these numbers. Family upheaval --separation, divorce, remarriage, and frequent relocation due to jobs or other factors--has added to the normal stresses of adolescence. So has the emergence of a cultural structure in which both parents are more likely to be working outside the home, some experts say. "There isn't any tightness in families, by and large, as there used to be in this country," comments Jack Montgomery, M.D., medical director for Human Affairs International, a wholly owned subsidiary of Aetna Life Insurance Co., which provides psychiatric managed care to large companies.

At the same time, treatment for psychiatric problems has lost much of its negative connotation, and insurance companies have been quick to pick up the tab for care in the hospital, while lagging behind in covering other forms of treatment. Adolescents are sometimes hospitalized because that is the only setting their parent's insurance pays for.

Moreover, mental health groups and professionals accuse the for-profit psychiatric hospitals of seducing parents through mass advertising into hospitalizing adolescents needlessly.

Inpatient care for kids is being "grossly overutilized," says John Ambrose, director of public policy at the National Mental Health Association. He maintains that it isn't only youngsters with serious mental disorders--such as depression and schizophrenia--who are being hospitalized. He charges that teens whose parents are unable or unwilling to control them are also winding up in psychiatric units.

In fact, says a study by the Children's Defense Fund, up to 40 percent of young people hospitalized may not need that level of care.

"Most large employers do not cover mental illness well," says Lawrence Hartmann, M.D., a child and adolescent psychiatrist in Cambridge, Mass. "Most employees don't know this, and they further deny that they ever might need the coverage."

What can be done?

So what can employers do about both lowering costs and getting better care? The first step is to look carefully at current coverage and then devise a benefits plan that ensures a broad spectrum of services ranging from hospitalization to home-based services and outpatient counseling.

With the staggering increase in adolescent mental health bills has come a new breed of managed care and utilization review firms, but questions remain as to which techniques are most effective.

Health care consultants at A. Foster Higgins & Co., Inc., estimate that in 1988, American business paid an average of $207 per worker for coverage of mental health and substance abuse care. Many firms exist to help control those costs.

While some of these firms primarily do utilization reviews and monitor program costs, others have their own preferred provider networks or HMOs. Together, they collect about $90 million in charges for managing mental health benefits plans.

Peter Stanton, vice president of Arlington, Va.-based American PsychManagement, Inc., claims his company has reduced the length of stay in hospital for one of its clients by 30 to 35 percent, through a Focused Adolescent Review Program. At the client's request, 100 percent of its cases are reviewed by a physician, and there are frequent, other periodic evaluations. Outpatient care is encouraged when appropriate. When the client, a company with 110,000 employees, came to American PsychManagement about six months ago, nearly 60 percent of its mental health claims were for treatment of adolescents, almost double the 30 percent figure many experts give as the red flag to start serious action.

When Southland, another PsychManagement client, decided to try managed mental health care to control its adolescent psych care costs, the two companies worked out a plan that allows flexibility in the traditional benefits structure when a less-restrictive or more cost efficient care program could be substituted. For example, explains Walter Anderson, Southland's manager of group insurance, "Our plan does not normally cover residential treatment centers, but we use them if it's good for the youngster and effective for the plan."

Residential treatment centers provide a 24-hour structured program but without the intensity of professional therapies and services found in a hospital setting. Their cost: about a third that of hospital inpatient care.

According to Anderson, Dallas-based Southland is now managing to hold its mental health costs at about 10 percent of the total plan costs, although adolescents still generate about a third of the plan's mental health costs.

A word to the wise

A warning, though: Be wary of blindly accepting pie-in-the-sky projections on the savings to be had using managed psych care, since first-year savings can be ephemeral and outcomes studies are still in the works. (See B&H, December 1989, pages 26-28.)

Wyatt's Nalli says his firm advises clients to "at least put the utilization review firms at risk." If possible, he adds, get the vendor to give performance guarantees.

Benefits consultants also warn that managed care firms aren't above cutting corners on services in order to meet their own bottom-line targets.

Gaps in coverage

One of the problems facing companies trying to hold down rising psychiatric claims is the dearth of insurance coverage for transitional or non-traditional outpatient services such as therapeutic foster care and intensive home-based therapy, both of which are far less costly than hospitalization.

"You've got this gap in there" that leaves adolescents with the extremes of either hospital care or going home, when something in between is what the child needs, agrees Richard Ekstrom, health benefits manager for Westinghouse Electric Corp., Pittsburgh. Ekstrom suggests that a "custodial/treatment program," in which the child is in a residential program that includes provisions for schooling, is one alternative.

There is growing consensus that providers and insurers must work together to create a logical continuum of care, including outpatient treatment, special classes in school, evening and day programs, residential care programs, and hospitalization.

Intensive home-based therapy, a relatively new concept that evolved from the child welfare system, is gaining interest among mental health groups and patient advocates because it attempts to treat children in a family context. This approach typically involves psychologists and social workers who work with families regularly for up to two months.

Costs for a complete episode of services for a family vary from about $1,000 to $10,000, according to Beth Stroul, vice president of Management & Training Innovations in McLean, Va.

The intensity of the programs varies, but "the success rate overall has been rather impressive," notes Stroul. The problem is finding insurers who are willing to pay for the programs. "There are few opportunities for third-party reimbursement for these kinds of services," says Stroul, adding that state governments provide the major funding for home-based interventions.

Stroul finds this surprising. She believes home-based treatment programs give a patient--and thus the company providing benefits--more for the money than other forms of treatment because they tend to integrate the whole family into the therapy.

Stroul doesn't place all of the blame for the lack of innovative treatment programs on the insurance industry. Employers need to investigate some of the newer concepts in psych care and educate their employees about them, she says. Then employers need to approach their carriers with a "wish-list" of reimbursable treatment options. "Until both public and private insurers, as well as businesses, begin to look at these alternatives, we're going to have escalating costs," Stroul warns.

Signs of change

There are signs that coverage is changing and expanding. Prudential Life Insurance now pays for intensive home-based crisis intervention in which the child remains at home and social workers or psychologists come to the house to counsel the patient and family and set up a treatment regimen. The program's length varies but is generally up to two months. It can involve anywhere from two to five days of treatment a week in the home. The company's medical director, Mary Jane England, encourages employers to make home-based services part of the benefits plan.

Prudential recently received a $20 million grant from the Robert Wood Johnson Foundation to explore, with 12 states, ways of-blending public and private dollars to improve psych care for youngsters.

"Bad care is costly care," and that is exactly what businesses are getting when they sign up with insurance packages that rely heavily on inpatient benefits, claims England. "You get a kid into a psych hospital and you start a cycle of them being readmitted...every time things blow up at home."

Westinghouse's generous benefits package pays for up to six months of hospital psych care. Most observers would praise such a plan, but England says a company may not be doing itself or its employees a favor by providing that much inpatient care.

"We know for a fact that a child's going into inpatient care is directly related to the parent's insurance package."

She continues: "We need good psychiatric hospitalization for youngsters. There's no question about that. Do we need all the beds we have? No way."

"With some insurance companies, it's becoming difficult for adolescents to be admitted to hospitals for psych care," says Barbara Burns, professor of medical psychology at Duke University Medical Center and an authority on adolescent mental health care. Third-party payers are attempting to "precertify" that troubled teens actually need the costly intensive psych unit care.

Education and prevention

Companies also are beginning to fight rising mental health costs internally through education and prevention programs. A growing number of firms now open their employee assistance programs to spouses and children.

At John Alden Life Insurance in Miami, employees and their families are invited to participate in special "brown bag" lunches that feature discussions on communication between parents and children, coping with illness, recognizing the signs of substance abuse, handling daily stress in two-career families, dealing with divorce, and other relevant topics. The company also helped prepare a booklet on drug abuse for the local school system.

"Most of what we have done has been started within the last year," says Carolyn Webber, vice president for corporate development. "Parents will come to us and say, `I had no idea how to talk to my child.' The comments have been very positive."

In addition, John Alden offers courses, which are available to family members after work hours. Subjects include stress management and time management which are available to family members after work hours: for example, a teen who is having trouble handling his schoolwork may benefit from a few evenings spent learning how to better allocate his time.

"We've found that, by taking a posture to assist families, we get a better payoff in terms of prevention," says John Alden's Clemmons. "We're trying to hit [potential issues] in the early stages, educate people, and get information out there...before they ever become problems."

Southland also has extended its EAPs to families of employees. "Your heart goes out to these parents whose kids are having trouble," says Anderson.

When Westinghouse opened its Orlando, Fla., facility, the company sponsored a special weekend workshop to bring teens relocated there with their parents together with local adolescents.

The holistic approach

In short, the thrust increasingly is toward a more holistic approach to adolescent mental health care: getting companies involved with their employees' families and encouraging new forms of treatment that de-emphasize hospitalization and continue to reduce the stigma of psychiatric care. Not only do the new treatments usually mean less disruption of the family unit and a more humane type of care, they make good money sense, too.

So, while there's no arguing that mental health and substance abuse problems among teens are on the rise, employers can do much to improve adolescent mental health care and make it more cost effective by providing for flexibility in their mental health benefits plans.

Beyond that, companies need to align themselves with insurance companies, schools, and community programs to develop an integrated system of care tailored to the needs of adolescents.

"Our approach is one of overall wellness, of opening the lines of communication and getting professional help in as quickly and as early as possible," says John Alden's Clemmons. "If we wait to the point where a psychiatrist is saying we must put this child under full-time medical treatment, and they must be in this or that facility, and we must prescribe these types of medications--then we've gone too far down the line."

For Prudential's England, this means putting the same effort into building home-based services that went into increasing psychiatric hospital beds a decade ago. "We know we can cut down the use of hospitals if we have an adequate continuum of care," she insists.