We’re preparing another annual “Look Ahead in Managed Care” report, and this one ought to be particularly interesting. There are two new laws that are already having an impact on managed care, and some major changes appear to be dead ahead.
One thing seems clear: There will be more industry consolidation among health insurers over all, and behavioral health companies in particular.
A big reason, as we mentioned last week, is that federal regulations concerning medical loss ratio issues could weed out some of the smaller health care insurers. But mental health parity regulations, which finally took effect July 1, may have an even greater impact.
We’ve been told by Joan Pearson, an independent health care consultant in the area of mental health benefits, that the parity law will “really turn managed behavioral health care upside down.”
Why? Because she predicts that health care insurers will increasingly move managed behavioral health services in-house and away from carve-outs like Magellan and ValueOptions. Parity regulations, which were unveiled by the Obama Administration in February, will complicate administration of services to the point that it will make lots more sense for medical benefits and mental health benefits to be sliced and diced under the same roof.
To some extent, this has been happening already over the last several years. Aetna took its book of business back from Magellan three years ago, for example. Magellan, in response, has been developing other products such as pharmaceutical benefits management and radiology benefits management.
The impact on the industry of the new health care reform law is less clear. Employers are in a wait-and-see mode since changes in the U.S. House of Representatives and U.S. Senate put implementation at risk.
Some analysts believe that Republicans, since they won’t have the votes to override an Obama veto, may opt for a “starve the beast” strategy that leaves reform measures unfunded.
Watch for the full managed care report, which will address these and other issues, in Psychotherapy Finances after the first of the year. Also, we’ll have a better idea about strategies in Washington, and how the economy will affect health care in 2011.