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Analysis of Mental Health Costs
Interface Employers - Past 12 Months
In 2002 IEAP provided its integrated EAP/mental health care
management programs to clients (employers) ranging in size from less than 100 to over
5,000 employees.
The most recent national survey that segregated the costs of mental
health (M/H) benefits reported that M/H benefits offered through a PPO averaged more than
$175 per employee, per year.
Mental health benefits offered through IEAP's integrated M/H program
averaged $78 per employee, per year. That average includes claims paid and the cost of IEAP's services combined (managed care integrated with a 6 session model EAP).
IEAP produced an average savings of $97 per employee, per year for
M/H benefits vs. the national average, for a percentage savings of over 56 percent.
IEAP averaged 9.5 percent annual EAP utilization compared to the
national average of 5 percent. Our savings were not achieved by creating hurdles
that produced low utilization, but was the result of resolving the majority of cases under
the EAP and properly managing those that were referred to insurance utilizing our
step-down approach.
To take our analysis a step further let's look at Utilized Annual
Costs -- this is a factor of cost to utilization and shows that cost savings were achieved
while producing high utilization of treatment. For if M/H costs are controlled with
hurdles that produce low utilization, the health plan ends up incurring the medical cost
offset associated with The HERO Study.
=> Utilized Annual Costs for the National Average was $3,500
=> Utilized Annual Costs for IEAP was $811
(Arrived at by taking the yearly average costs for M/H benefits and
dividing it by the average EAP utilization rate for each)
This data demonstrates that employers can provide adequate mental
health benefits, comply with the Mental Health Parity Act, and control their M/H costs.
The integrated EAP/managed care concept presents you with the opportunity to design your
health plan with a mental health care management program that works to control overall
health care costs while providing access to appropriate levels of treatment. By removing
the hurdles currently in your plan design that employees encounter in accessing M/H
treatment early on, many areas of your organization will be impacted in a positive
fashion.
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