The effect of Medicaid managed care on mental health care for children: a review of the literature.

Despite its widespread adoption, little is known about the effect of Medicaid managed care (MMC) on children using mental health services. To assess the state of current research, we reviewed the literature on MMC and synthesized findings regarding access to care, expenditures, utilization, cost-shifting, and quality of care. A literature search was conducted and updated in November 2001. Studies were included if they involved evaluations of MMC, included children with mental health or substance abuse disorders, and had a non-MMC comparison group. Eight studies were included in the review. Most involved carve-outs and capitation. All of the studies that measured cost and service use showed decreases in total costs, inpatient care costs, and inpatient service use. These changes were frequently accompanied by increases in outpatient care. Some evidence suggests that MMC increased access to care for those with less serious conditions. There was no convincing evidence of cost-shifting from mental to physical health or other public agencies. Finally, no study directly measured health outcomes or quality of care. By reducing service use in inpatient settings, MMC has the potential to reduce children's mental health expenditures. The available research provides virtually no evidence on quality of care.