Reimbursement News

Chronic Disease Patients with Mental Health Disorders Cost More

A new study confirms that chronic disease patients with a mental health disorder cost nearly twice as much, indicating an opportunity for a bundled payment model.

Chronic disease patients and mental health disorders

Source: Thinkstock

By Jacqueline LaPointe

- For chronic disease patients, having a mental health disorder was associated with higher healthcare costs and resource use, confirms a new study in JAMA Network Open.

The study of hospitalization and physician billing claims for adults 18 years and over in the Canadian province of Alberta between 2012 and 2015 showed that chronic disease patients without a mental health disorder cost, on average, $22,280 during the period, while those with a mental health disorder cost $38,250.

Healthcare costs also varied significantly by mental health diagnosis. For example, total three-year adjusted costs among chronic disease patients were:

  • $34,690 for those with depression
  • $42,320 for those with alcohol use disorder
  • $45,260 for those with substance abuse disorder
  • $50,450 for those with schizophrenia

“Our findings raise questions about optimizing the management of mental health disorders in patients with chronic disease,” wrote the study’s authors. “Our results also raise the question of whether a different model of care for patients with mental health disorders and chronic disease needs to be developed.”

Research has shown that mental health disorders are strongly correlated with chronic disease, and leaving mental health issues untreated can lead to worse patient outcomes, such as medication non-adherence, greater mortality rates, and higher emergency department use.

But few studies have tracked the healthcare costs for individuals with chronic disease and a mental health issue, and even fewer have used validated algorithms to define mental health disorders, the authors reported.

Understanding the costs associated with mental health disorders among chronic disease patients is vital to determining the additional investments providers and policymakers need to make to reduce health costs, which are slated to account for over 19 percent of gross domestic product (GDP) in the US by 2027.

Using validated algorithms based on ICD-9 and ICD-10 codes, the authors of the study set out to determine the economic impact mental health disorders have on patients with a wide range of chronic diseases, including asthma, congestive heart failure, myocardial infarction, diabetes, epilepsy, hypertension, chronic pulmonary disease, and chronic kidney disease.

They found that chronic disease patients with mental health disorders not only cost nearly twice as much as their peers without mental health needs, but they also use more healthcare services.

Despite representing just 15.8 percent of patients studied, those with a mental health diagnosis accounted for 140,560 of 522,140 admissions from 2012 to 2015. Of those admissions, only about 16,029, or 11.4 percent, were for the care of one of the four mental health disorders.

“The reasons for admission were broad, including infectious causes, surgical presentations, and gastrointestinal issues,” the authors wrote.

Overall, resource use by chronic disease patients with mental health disorders was not driven by healthcare presentations owing to chronic diseases compared to patients without a mental health disorder, the study showed.

“People with co-occurring chronic diseases and mental health disorders are a heterogenous group with a myriad of health and social needs, and the drivers of their acute care use are likely multifactorial, possibly including poor access to coordinated care and mental health care delivered by nonspecialists, among others,” the authors wrote.

A different payment model for patients with both chronic disease and mental health disorders may help to curb excessive costs and resource use, they explained.

“[P]ayment models could be developed to support or encourage new models of care, such as a bundled payment that includes the costs of chronic disease and mental health care services,” the authors stated. “While bundled payments for chronic diseases and mental health and substance use disorders can be challenging, bundled payment for diabetes care was found to improve care coordination, and we did identify variation in costs (e.g., drug spending) that point to areas where savings under a bundled payment model may be plausible.”

Bundled payment models reimburse providers a single, fixed amount for an episode of care. The flexible payment structure allows providers to invest in traditional healthcare services, as well as more comprehensive treatment options and new workflows.

CMS has been considering an alternative payment model to address mental health disorders and released a new opportunity in 2018 for Medicaid agencies to develop new payment structures to address behavioral health risks factors among youths impacted by the opioid crisis.

However, few bundled payment and other alternative payment models exist that address mental health disorders and chronic disease on a large scale. Generally, the industry has faced challenges with identifying mental health disorders and social determinants of health and effectively integrating physical and mental health services.

But new research into the connection between mental health disorders and other health conditions could spur great investment into models of care that appropriately address both, the authors explained.