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County and State Programs

The ongoing recession has put tremendous pressure on state spending at a time when revenue increases are politically unpopular. Medicaid is a major state responsibility, and states are looking for predictability and cost containment. States are increasingly considering integrated managed care approaches that consolidate the financing for managing Medicaid physical and behavioral health services. To save money, they are trying to bring their higher cost enrollees – those who are disabled – into managed care. However, financial integration does not automatically lead to clinical integration. Previous experience has shown that financial integration of behavioral and physical health services without strong clinical requirements has reduced access to specialty behavioral healthcare services and not improved care for affected beneficiaries. 

Integration of clinical care and services is an important goal for improving Medicaid systems. Integrated health care delivery has been demonstrated to improve care and reduce costs by ensuring that people with chronic conditions have ready access to both primary and behavioral health care with close coordination between them, as in the concept of patient centered medical homes. Integrated care centered in behavioral health organizations has begun to bring primary care and other medical services to adults with serious mental illnesses (SMI) and substance use conditions. Offering primary care in a behavioral health setting is particularly important because this group has suffered for years with compromised access to primary and other medical care, contributing to their high levels of chronic illness and early death. 

States cannot achieve true integration of clinical services in managed care arrangements simply by contracting with a managed care entity. Clinical integration requires access to appropriate personnel, services and supports that are paid for and aligned within the managed care approach. Moreover, different kinds of managed care arrangements can have a very different impact on Medicaid enrollees with the most serious mental illnesses and emotional disturbances.