Background: Two important policy levers to affect health care delivery are financing and informational interventions. Unfortunately, these two approaches have not been considered simultaneously and little is known about how their effects compare.
Aims of the Study: This paper estimates the relative role of financial incentives (prepaid versus fee for service) and provider information (perceived knowledge of antidepressant medications and skill in counseling for depression) on quality of care for less and more severely depressed patients and their health and cost outcomes.
Methods: We develop a theoretical model of provider behavior and estimate a reduced form using a multinomial probit model with heteroskedastic covariances. The likely effects of changing provider knowledge about depression treatment in primary care are then simulated and contrasted with the effects of a shift toward prepaid managed care as opposed to fee-for-service care. The empirical model is estimated using data from the Medical Outcomes Study.
Results: We conclude that financing and information have different effects and that their combination can achieve the conflicting goals of improved health outcomes and reduced direct treatment goals. Moreover, including family income as one important dimension of social cost suggests that the combination of informational interventions and a shift to prepaid care may dominate either one intervention in isolation from a social cost perspective. Specifically regarding information, we found that increasing provider knowledge could have the highly desirable effect of greater targeting of treatments to sicker patients while not raising overall treatment rates much—a treatment pattern that many hoped managed care could achieve, but for which there has been little evidence.
Conclusions: Our analysis illustrates the value of considering these widely different policy goals simultaneously. We learned that variation in physician knowledge generally had stronger associations with clinically relevant practice patterns for depression than did a complete change in financing strategy. The moderate change in perceived knowledge we simulated (not near the extremes of observed values of perceived knowledge) was associated with enough improvement in appropriateness of care to more than offset the reduction in appropriateness with a complete shift from fee-for-service to prepaid managed care.
Implications for Health Policy: The paper demonstrates the importance of considering different interventions simultaneously. Combining informational and financial interventions simultaneously can achieve better quality of care and reduce health care costs, something neither intervention can in isolation. © 1998 John Wiley & Sons, Ltd.
Background: Both economic and ethical perspectives are exerting increasing influence at all levels of mental health policy and practice; yet there is little consensus on how these two different perspectives are to be reconciled or explicitly incorporated into decision-making.
Aim: This review article is directed towards a fuller understanding of the complex trade-offs and compromises that are or may be made by clinicians, managers and policy-makers alike in the context of mental health care planning and delivery.
Method: We briefly outline a number of key principles of health care economics and ethics, and then focus on the particular incentives and trade-offs that are raised by these principles at three levels of the mental health system: government and society; purchasers and providers; and users and carers.
Results: At the level of government and society, we find (economically influenced) attempts to reform mental health care offset by concerns revolving around access to care: whether society is prepared to forgo economic benefits in exchange for improved equity depends to a considerable extent on the prevailing ethical paradigm. The implementation of these reforms at the level of purchasers and providers has helped to focus attention on evaluation and prioritization, but has also introduced ‘perverse incentives’ such as cost-shifting and cream-skimming, which can impede access to or continuity of appropriate care for mentally ill people. Finally, we detect opportunities for moral hazard and other forms of strategic behaviour that are thrown up by the nature of the carer:user relationship in mental health care.
Conclusion: We conclude by highlighting the need to move towards a more open, accountable and evidence-based mental health care system. Acknowledgement of and progress towards these three requirements will not deliver ideal levels of efficiency or equity, but will foster a greater understanding of the relevance of ethical considerations to mental health policies and strategies that are often influenced strongly or solely by economic arguments, whilst also demonstrating that equity must come at a price. © 1998 John Wiley & Sons, Ltd.
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