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July 21, 2003

Some Mental Health Cost Controls May Increase Employers' Long-Term Expenses

Some mental health plan benefits designed to contain costs by restricting access to care may actually increase an employer’s expenses over the long-term, according to an analysis of mental health plans conducted by the Johns Hopkins Bloomberg School of Public Health. Workers in plans with high deductibles, pre-existing condition exclusion periods, or “carve-out” benefits that provide separate, specialized mental health coverage were found to be less likely to return to work after suffering a mental disability. The research results suggest that money saved by restricting access to care is offset by higher employee turnover costs. The study appears in the September 2003 issue of Mental Health Services Research. It is among the first to examine long-term mental health disability cost issues.

“Our results show that from the employer’s perspective, adequate mental health coverage for employees can yield tangible benefits at the bottom line,” said David Salkever, PhD, lead author of the study and a professor with the School’sDepartment of Health Policy and Management.  

Dr. Salkever and colleagues Judith Shinogle of the University of South Carolina College of Pharmacy and Howard Goldman of the University of Maryland School of Medicine analyzed the mental health benefits of 116 U.S. firms. They also examined the mental health disability claims of 407 employees, from these firms, who were on long-term disability leave.

After adjusting for a number of variables, the analysis showed that deductibles greater than $600, long waiting periods for treatment of preexisting conditions, and carve-out benefits were consistently associated with a lower probability that a disabled employee would return to work. However, employees with carve-out benefits plans were on disability for shorter periods of time. The researchers suggested these employees may retire sooner rather than return to work.

The researchers also examined the impact of employers’ disability management practices on the likelihood employees would return to work. They found that companies where internal management of health and disability benefits were integrated in the same unit had better return-to-work records, while giving front-line managers disability management responsibilities did not promote return to work.

“Return to Work and Claim Duration for Workers with Long-Term Mental Disabilities: Impact of Mental Health Coverage, Fringe Benefits and Disability Management ” was written by David S. Salkever, Judith A. Shinogle, and Howard Goldman.

The research was funded by grants from theNational Institute of Mental Health.

Public Affairs Media Contacts for the Johns Hopkins Bloomberg School of Public Health: Tim Parsons or Kenna Brigham at 410-955-6878 or