Biopsychiatry Illuminated

THE CANDLELIGHT PROJECT
by Bob Collier

9 February 2004
Issue 80

It seems to me that there's no simple 'good guys vs. bad guys' scenario concerning the American Psychiatric Association's fabricated 'disorders of childhood' and the complicated mess that has evolved from their popularisation.

The central characters do indeed seem to be psychiatrists with feelings of inadequacy who have been attempting to increase the credibility of their profession - and by consequence boost their own egos - in less than honest ways.

But, there are other parties involved in the mass delusion, each contributing something to its development and maintenance.

The most obvious party, of course, is the pharmaceutical industry, in business to make as much profit as possible. Then, I've discovered, there are biological scientists who've allowed their imagination to gallop off ahead of the facts; there are social scientists who don't seem to know much about social behaviour or science; educators who are panicking as the system that provides them with their livelihood disintegrates around them; parents who've realized that they have a job which requires skills they don't have and don't know how to get and are glad of whatever relief comes their way; media parrots who write what they're told to write.

Over the past week, however, I've been looking at another player in the 'mental illness' game that, it appears to me, is coming in for as much criticism for its part as even psychiatry and the drug companies - the health insurance industry. Specifically, the American health insurance industry (the Americans started all this, after all).

What follows is an assortment of comments and commentaries on the American health care system and health insurance industry - not in any particularly meaningful order - that offer us clues to how the American health insurance industry is indeed playing a major role in maintaining psychiatry's bogus 'mental disorders'.

From 'Health Care Delivery in the United States: the Transformation of an Industry', by Deborah Gordon of Chicago franchise attorneys Rudnick & Wolfe.
http://www.sba.muohio.edu/abas/1999/gordonde.pdf

"To begin to understand the mechanism by which health care is delivered in the United States, it is imperative to understand how health care services are paid for in the United States. Traditional health care insurance coverage emanated from indemnity health care insurance whereby insurance companies would charge a health care insurance premium, invest that premium dollar and pay out health care claims. As health care costs were relatively low, insurance companies were earning money on the invested premium dollar, advances in healthcare technology were relatively slow and malpractice awards were relatively small, this indemnity-based insurance model provided a relatively stable mechanism for the health care industry.

However, health care costs began to rise and malpractice awards rose dramatically. Suddenly, traditional indemnity insurance companies could no longer continue to operate under this model. As premium rates began to rise, the concept of managed care began to appear more attractive to those entities responsible for the payment of health care services, i.e. employers, the government, etc.

These payors began to develop mechanisms to control the costs of the provision of healthcare services. This paved the way for alternative health insurance products such as HMOs [Health Maintenance Organizations] and PPOs [Preferred Provider Organizations]. HMOs are similar to indemnity insurance companies in that HMOs are financially responsible for the cost of providing health care services to insureds. HMOs charge a flat premium and are responsible for the delivery of health care services to enrollees on a prepaid basis, rather than an indemnity basis. In offering a new health care insurance option, HMOs could offer affordable health care services due to HMOs' employment of managed care mechanisms. A PPO, on the other hand, also employs managed care concepts, but is not an actual insurance product. Instead, it is an arrangement designed to supply health care services at negotiated discounted rates and by providing incentives for enrollees to use certain designated health care providers. Even self-insured companies have begun engaging third party administrators utilizing managed care concepts to administer their self-insured plans.

As such, managed care concepts arose which whereby insurers would only cover "medically necessary" services."

"With physicians, and especially primary care physicians, HMOs would often pay the physicians based upon a capitation methodology, i.e., a per-patient, per-month concept. For example, primary care physicians are paid $100 per patient per month. The primary care physician is then assigned a certain number of the HMO's patients. In any given month, if all of the HMO's patients are healthy, the primary care physician takes home the money, without having to provide any services. However, even if a flu epidemic breaks out, or if even a few of those patients become very ill, the physician is still paid only that flat amount, and is required to provide all medically necessary services to those patients. ..."

"With hospitals, HMOs may employ either per diem reimbursement (a hospital is paid a flat amount for each day an HMO's patient is hospitalized, regardless of the reason such patient is hospitalized) or on a diagnostic related methodology (the hospital is paid a flat amount based upon the reason the patient is hospitalized). So, if a patient has viral pneumonia, the hospital is paid a certain flat amount that the HMO has set for that illness. If that patient takes a longer-than-average time to recover, the hospital is not paid any additional amount. These cost-sharing reimbursement methods have the potential effect of producing incentives for hospitals to utilize less expensive services and products. Physicians and hospitals are also provided with additional incentives to utilize the most cost-effective services through incentive funds. For example, an HMO may withhold a certain percentage of a health care provider's reimbursement. Then at the end of the year, the HMO assesses the health care provider's use of certain services, e.g., prescription drugs, admissions to the hospital, home health services. If the health care provider utilized those services in a cost-effective manner, that health care provider would get a bonus at the end of the year. If not, the health care provider would lose the amount withheld. In order to align incentives, some HMOs also began to employ physicians and actually own and operate health care facilities, blurring the distinction between insurance payors and health care providers. Similarly, hospitals and health systems have begun to own and operate their own insurance companies or directly contract with employers or other health care payors, thereby cutting out the HMO. Obviously, these types of reimbursement methodologies become subject to abuse and public backlash."

From 'The Risks of Managed Care: A Position Statement' by Granville Angell, EdS, LPC, NCC
http://www.transitions-counseling.com/The_Risks_Of_Managed_Care.html

"At the present time, our society is undergoing rapid and unstable change with regard to the economics of the healthcare industry. Financial policies, such as fees for services, are less and less established by the actual care-givers as the corporate mentality of "big business" continues to enter the picture. Major changes continue to occur as managed care (including HMO's, PPO's, etc.) and health insurance companies dominate both the provision of services and payment for services."

"Historically, compared to medical care, mental/behavioral healthcare of any nature has not received the same respect in our society. Coverage by health insurance and managed care companies has been inadequate and has required a DSM-IV psychiatric diagnosis, denoting "mental illness," in order to receive treatment. As a result, in a society which historically stigmatizes persons with a history of mental illness, the trade- off for any reimbursement received amounts to a psychiatric diagnosis which becomes a permanent part of the client's insurance records.

Considering that counseling services for many situations can be provided without such a diagnosis, persons who are given enough information to truly make an informed choice often opt to pay out-of-pocket. This is especially the case when counselors offer better alternatives, like fairly negotiated fees, sliding scale fees based on income, and the brief therapy approaches pioneered by the counseling profession."

"The majority of health insurance companies and managed care conglomerates are self-serving business concerns, first. They make more income the less service they have to pay for, manage, or provide. Operating under the guise of ensuring appropriate and competent professional care, they use record review and telephone supervision to manage and limit the professional care of clients and patients with whom they have no first-hand, personal knowledge or experience. The result often is a sort of tug-of- war; between therapists using records to justify treatment, and company reviewers using records as a basis for limiting or denying treatment. Indeed, the provider signs a contract with the managed care company which considers the company's needs over the client's.

By contract, the client's records (once the private domain of therapist and client) are now the property of the managed care company. And when the managed care company decides to terminate treatment, the counselor's contract typically stipulates that the counselor shall not continue to see the client...not even for free."

"In summary, in their economic self-interests, the managed care and health insurance conglomerates have developed a system which especially compromises mental/behavioral healthcare services. All covered services require a psychiatric diagnosis and many services (for example, marriage counseling and family therapy) often are not covered at all. (Some therapists get around this by a psychiatric diagnosis of at least one person in the couple or family.)"

From 'Eleven Unethical Managed Care Practices Every Patient Should Know About (With emphasis on mental health care) by Ivan Miller, Ph.D., of The National Coalition of Mental Health Professionals and Consumers, Inc.
http://www.nomanagedcare.org/eleven.html

"Managed care, particularly in states that have so-called parity laws, often claims that mental health benefits are unlimited, when in reality, hidden policies and rules make even ordinary treatment unavailable.

Managed care often claims to provide all mental health services at times when it offers only ultra brief therapy -- a short-term and frequently ineffective treatment."

"Because managed care limits referrals to specialists, it forces many professionals to treat special problems for which they do not have the training or experience."

"Managed care ... seeks out and develops conflicts of interest in which professionals profit the most when the patient receives the least treatment.

The conflict is most serious with case rates and capitation in which the professional is paid a set fee regardless of how much treatment the patient is given. Competitive mental health case rates may be as low as $200 per patient, regardless of whether the patient is seen once or fifty times. If patients are seen for as few as an average of eight one-hour sessions, simple arithmetic shows that a $200 case rate yields $25 per session. After subtracting a modest overhead cost estimate of $20 per session, only $5 is left. That is too little to pay the therapist for each session and paperwork. When case rates are this low, professionals have a terrible conflict of interest because they cannot stay in business unless the patient is given much less treatment than is really needed.

... professionals may avoid dealing with important long-term issues or cut therapy short because managed care prefers to refer new patients to therapists with a record of short-term treatment. The therapist has a conflict here between treating current patients for the necessary length of time, or cutting treatment short to assure future referrals.

Many managed mental health care companies will stop referrals to therapists who provide more than ultra brief therapy, but patients usually are not told their treatment is restricted by this hidden managed care policy."

"Some companies have contractual "gag clauses" which forbid professionals from giving patients any information that would make the patient unhappy with their managed care company. Due to intense public pressure, most companies have dropped these gag clauses, but many still use what they call "managed care unfriendly" behavior ratings which perform the same function as gag clauses. These ratings are used to control therapists in the following way. If a therapist commits an "unfriendly behavior," it shows up as a low rating. Professionals are regularly notified of the ratings, and low ratings serve as a warning that unfriendly behavior may result in terminating the contract. The forbidden "unfriendly behavior" includes even telling patients when they may benefit from a treatment not paid by the managed care company. Patients are not told that their therapist's professional freedom is constrained by these rating systems."

"Managed care ... often fails to inform patients of any treatment alternatives outside of the plan. This failure to inform serves the purposes of the managed care company because patients who do not know other treatment is possible are more likely to report satisfaction with the managed care treatment. Unfortunately, this failure to inform also undermines the patients' control, because the patient loses the choice to self-pay for the preferred treatment.

Medication is frequently presented as if it is complete treatment. In truth, psychotherapy for many problems, either in place of medication or along with medication, is better treatment than medications alone, and psychotherapy is a treatment that many patients will pay for out-of-pocket if they believe it will help.

Patients who are sent to psychotherapy are usually told that ultra brief therapy is the treatment of choice, and if they don't improve, they are told that there are no realistic alternatives. The reality is that longer-term psychotherapy is a more effective treatment, and many patients find it so helpful that they will self-pay for longer psychotherapy.

Patients, particularly children, are rushed through treatment, either therapy or medication, without being informed of the benefits of psychological and educational testing to evaluate and diagnose problems. Again, some patients or parents choose to self-pay for this testing when they know it is available."

"In managed care ... the family doctor is often the gatekeeper and may be paid a financial bonus for avoiding referrals to specialists."

"Health care ethics require that professionals publicly report potential harm from a treatment, attempt to evaluate possible harm, and consider possible risks along with potential benefits when making treatment decisions. Managed care, on the other hand, usually reports only those statistics that show the benefits of managed care and does not adequately examine the potential harm to patients."

"When managed care considers cost effectiveness, it often does so only on the basis of cost to insurance, not the costs to the patients or their families. For example, when ultra brief therapy is used for the treatment of depression, fewer patients will recover. The many patients who don't recover will suffer damages through missing work, losing a job, a divorce, inadequate parenting of their children, or suicide. Their families also may need to take time from work and be less productive. Both the patient and their family will suffer emotionally. However, when reports about managed care cost-effectiveness decisions are revealed, these reports do not consider these important costs to the patients and their families."

"... Human life and quality of life are simply not entered into the managed care formulas for measuring the treatment cost- effectiveness. The cost-effectiveness calculations show only insurance expenses."

A collection of quotes:

"Dr. Sacks is described as having led, in the 1970's, the "successful battle to mandate group health coverage for outpatient psychiatric treatment..." However, Dr. Sacks now describes managed care as "...totally undesirable in terms of people getting adequate care... Managed care operations of course would like...extraordinary profit for insurance companies... The greed is daunting... As an example of greed, the C.E.O. of US Healthcare will get in excess of $900 million plus... Where does the money come from? It comes from the denial and interruption of ... patient care."

Herbert S. Sacks, M.D. (President-elect of the American Psychiatric Association), The New York Times, Sunday, October 27, 1996.

"Make no mistake, we are under attack by a rapacious, dishonest, destructive, greed-driven insurance/managed-care/big business combine that is in the process of decimating all health care in America, particularly ... [psychotherapy and psychiatric care]

"The market is controlled by a few large corporations and the health insurance industry, stifling competition and excluding the choices of the people who need care and those who provide it. The health market is an imprisoned market, controlled by corporations, which operate identically to totalitarian states, with gag rules, discharge-without-cause clauses, and so-called appeals processes deriving directly from Machiavelli.... Society needs to know that managed care is a false promise based on a false idol". Dr. Eist continues by emphasizing the need for his profession to fight the threats to ethics and confidentiality posed by managed care."

Harold I. Eist, M.D. (President of the American Psychiatric Association), American Journal of Psychiatry (153:9), September 1996, pp. 1123-1125.

"We must state emphatically that managed care is inherently flawed. We simply cannot let private entrepreneurs decide whether they want to spend money on behalf of patients or keep the money in corporate profits."

Dr. Nathan Stockhamer, President of The American Psychological Association, Division of Psychoanalysis.

"Mental health care benefits have been cut by more than 50% in the last ten years. In particular, managed care plans along with employers have been reluctant to pay the cost of ongoing psychotherapy. Even patients with serious disorders that stem from such things as childhood sexual abuse are being limited to just a few visits. That's if they are seen by a therapist at all...

The only area of mental health coverage that employers and HMO's seem interested in funding is drug therapy. They'd rather just throw Prozac, or better yet, some generic substitute costing pennies a pill, at mental health problems".

Timothy B. McCall, M.D., Physician commentator, author of 'Examining Your Doctor', on National Public Radio, May 20, 1998.

"For psychiatrists, medical insurance companies, and especially the pharmaceutical industry the benefit derived from promoting drug treatment and chemical theories of mental disorders is primarily economic. Of course, the argument is never framed in that way...

Psychotherapeutic drugs, like the other physical therapies before it, have served the interests of the psychiatric profession. Of course, psychiatrists are not all of one mind, but in various ways the profession as a whole tends to promote drugs by exaggerating what is known about the chemical basis of mental disorders and the effectiveness of drugs, and often by discrediting alternative treatment modalities...

By adjusting payment schedules, medical insurers are playing a major role in shifting treatment toward drugs and away from psychotherapy."

Dr. Elliot Valenstein, Professor Emeritus of Psychology, University of Michigan, author of 'Blaming the Brain: The Truth About Drugs and Mental Health'.

"The managed care assault on all but the most brief psychotherapies, not just psychoanalysis, include excessive review, destruction of the doctor-patient relationship and environment for treatment, invasion of privacy, excessive demands for record-keeping and supposed standards of treatment that have as their goal a reduction in the availability of care....

The future of psychiatry is in doubt. [Psychiatric] Residencies in America cannot be filled with graduates from U.S. medical schools. Medical students know that psychiatrists are being coerced by managed care not to provide needed and often expensive ...services. In many training programs, residents are not even exposed to psychotherapy. [Psychiatric] Residents are being trained with little understanding of how to listen to patients, and how to understand their thoughts, motivations, fears and feelings. There exists a very real threat of a mindless psychiatry, in which only chemical treatment will be understood and practiced...

Reviews of the necessity for the treatment being provided are undertaken by clinicians who profit financially, directly or indirectly, in proportion to the reduction in health care they produce. Often, these reviews are executed by inexperienced clinicians....

Psychotherapy instruction for medical students and [psychiatric] residents is in short supply. The result is residents trained primarily in medication management and severely limited in their ability...to talk meaningfully with their patients."

Dr. Lawrence Sack, President, American Association of Private Practice Psychiatrists, 'What Will Managed Care Do to the Profession of Psychiatry?', August, 1996.

From 'Problems with Managed Care Psychotherapy', Volunteers in Psychotherapy, Inc.:
http://www.ctvip.org/web2.html

"Managed Care destroys Privacy in Psychotherapy.

Managed care has drastically damaged psychotherapy. Therapists must send reports about your personal therapy discussions to insurance companies when they demand. Many reasonable people are justifiably concerned about divulging personal information in therapy that will become part of their permanent medical, insurance or employment records.

Managed Care companies control psychotherapy, not clients and therapists.

Insurers decide how long therapy will continue. They increase corporate profits by strictly rationing therapy.

Health insurers view personal problems as if they were illnesses.

However, no pathology of the body has been scientifically verified. Insurance companies can increase their profits by declaring psychotherapy of reasonable length "not medically necessary". They increasingly rely on pills.

Psychotherapy is costly.

Many people who want to preserve their privacy and control, pay out of pocket for psychotherapy, if they can afford it.

Human understanding and solutions for people's personal problems are lost.

If your therapist works with your insurance or managed care company, they may bend to pressures to see you for only a short number of sessions. Therapists may be pressured to provide pills, and not therapy.

Your therapist will be less likely to really get to know how you think and feel. They may be less likely to learn of important personal experiences you have had which powerfully affected you, or to learn what is important to you in your life."

From 'Why Managed Care Hurts You' by John M. Grohol, Psy.D. http://www.grohol.com/managed.htm

"What's the big deal about this? Try getting psychotherapy services from your HMO or insurance company and you'll soon realize what the "big deal" is. There are two major and a whole lot of minor problems with regards to how managed care hurts your ability to access timely and effective treatment. The first problem is that insurance companies, looking out for the bottom line, will seek to limit either the time or type of psychotherapeutic services offered you. The second problem is that these same companies seek to limit your choices in who you can see.

This hurts you because it is the people in little cubicles in the insurance companies and HMOs in the world who dictate to us, the doctors and therapists who have had years of experience and training, what is and is not appropriate treatment for you. It wouldn't be so bad except that many (if not most) of those people in those little cubicles have no greater experience, education or specialized training than a college degree. Oversight at the companies is at best, minimal. This is not a doomsday or negativistic opinion -- these are facts you can check with your own HMO or insurance company."

From 'Myths of Managed Mental Health Care', California Coalition for Ethical Mental Health Care
http://www.ccemhc.org/myths.html

MYTH 8: THE MANAGED MENTAL HEALTH CARE INDUSTRY UTILISES THE MOST EFFECTIVE TREATMENT APPROACHES

Managed care companies promote the treatments that cost the least, not necessarily those that are most effective. They tend to discourage the use of any psychotherapy longer than a few visits, and to require medication instead of psychotherapy. They may deny inpatient treatment because of the cost. Some MC organizations even require doctors to prescribe less expensive, older medications, instead of the newer drugs that usually give patients better results with fewer side effects.

MYTH 9: MANAGED MENTAL HEALTH CARE COMPANIES REFER CLIENTS TO THE MOST QUALIFIED THERAPISTS

MC companies often limit coverage for psychotherapy while paying psychiatrists for medication visits only. (The Wall Street Journal, 12/1/95). Yet much of the research shows that depressed clients treated with medication alone relapse at a greater rate than those receiving only psychotherapy, or therapy combined with medication. For some patients, medication is simply not effective, or must be discontinued because of intolerable side effects.

And, finally, from 'Patient Care and the Future of Psychiatry in the Age of Managed Care', Group for the Advancement of Psychiatry - Committee on Planning and Communication, April 1997
http://www.groupadpsych.org/patient_care_paper.html

"Managed care has become the dominant force shaping the future of psychiatry. While managed care was conceived as a means of providing high quality service in a cost effective manner, in practice this has often meant an overriding emphasis on reduction of cost of care. In the process, patients with mental illness have suffered. This focus on cost has led to reduction in length of inpatient stays, cuts in day treatment, and limitation of outpatient services. We believe that these cuts often have been excessive and have damaged the quality of patient care. In some managed care settings, psychotherapy has been taken away as a reimbursable treatment performed by psychiatrists. In others, reduced reimbursement for psychotherapy and increased demand for paperwork has created powerful disincentives for psychiatrists to provide psychotherapy services. To the extent that psychotherapy is recognized as medically necessary by managed care, it has been drastically reduced in length and depth. An additional problem created by this managed care climate is that psychiatric residents are finding it increasingly difficult to receive adequate training in psychotherapy. This has long range implications for the quality of psychotherapy treatment and supervision of other mental health care providers by psychiatrists. If these trends continue, psychiatric practice can become primarily triage, consultation, medication management, and team management. Individual and group therapy will no longer be within the psychiatrist's job description or expertise."

The last document above, incidentally, contains this very interesting observation:

"The bio-psycho-social approach must guide our work.

The purely biological approach that ignores the psychological and social complexities of our patients lives is inadequate and detrimental to quality care."

It's worth noting that this statement was made in 1997 in an official paper published by a group of psychiatrists whose declared purpose is to advance the standing of their profession.

Hmmm...

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