Medicaid Managed Care Penetration and Drug Utilization for Patients with Serious Mental Illness

Abstract OBJECTIVES: State Medicaid programs are under increasing pressure to contain pharmaceutical spending. Many states have attempted to limit spending through greater Medicaid managed care penetration, which rose nationally from 54.5% in 1999 to 74.9% in 2011. It is not clear how this expansion has affected beneficiaries with serious mental illness (SMI)-a vulnerable population that often has their drug spending "carved out" from their managed care benefit. We sought to assess the association between managed care penetration and pharmaceutical spending on drugs for SMIs in these states. STUDY DESIGN: Retrospective cohort study. METHODS: State-year observations were constructed to study the relationship between managed care penetration and pharmaceutical spending on drugs for SMIs over the period 1999 to 2011. We analyzed the relationship using both cross-sectional and panel-data methods. RESULTS: Our cross-sectional analyses suggested that carve-out states with greater managed care penetration spend significantly less per enrollee on pharmaceuticals for the treatment of mental disorders: our panel data analyses did not generate statistically meaningful results. CONCLUSIONS: Future studies should address whether any effects of managed care on mental health prescription utilization and spending reflect improved care coordination or worsening access to valuable care for the population with SMI.