Limiting Inpatient Substance Use Treatment: What are the Consequences?

This study tested whether a managed care policy of substituting outpatient for inpatient treatment of substance use disorders shifted treatment costs to psychiatric providers. This was an observational study, based on administrative data of 25,450 adult disabled Medicaid beneficiaries treated for schizophrenia and major affective disorders. Eighteen percent had a diagnosis of substance use disorder. Multivariate regression was used to determine the odds of having a hospital admission and the relationship of managed care to hospital length of stay and total per person treatment expenditures. Hospital admissions and length of stay for both substance use disorder and psychiatric treatment were reduced, but adults with a dual diagnosis had higher annual expenditures compared to those with only a psychiatric diagnosis. There was no evidence of cost shifting. Although emphasis on outpatient treatment did not result in cost shifting, the combination of sub-stance use disorder and psychiatric illness remains an expensive public health problem.