Lost at Sea, or Charting a New Course? A forthright portrayal of psychology’s future in health care

By Lee McCabe, Ph.D.
July 1, 1999



I am weary and sick.
It is never too late
to learn to navigate.

It is my impression that professional psychologists, weary and sick, have been slow to adapt to the sea change that has occurred in the organization, delivery and financing of behavioral health care in this country.

Because of this inertia, many practitioners are incurring an opportunity cost of considerable magnitude, and are placing themselves at-risk of being excluded from new health care delivery structures that control patient access.

Plotting a course for a hospitable professional destination implies the mastery of a new repertoire of competencies befitting the radically altered environment, and that all approaches to professional success must be compatible with solutions for the problems that occasioned health care reform in the first place.

Further, psychologists need to pursue practical strategies, ones that transcend the polemics of the contemporary managed care debate. Only then can clinicians be assured that they will have an opportunity to make free career choices, including whether to apply their skills on the small island of self-pay or to set sail for the mainland of organized health care.

Navigating a Successful Course: Competency Imperatives
Future professional success requires that psychologists adopt new attitudes, attain new knowledge, and acquire new skills. A representative sample of core competencies for the future are offered for readers’ consideration:

New Attitudes
The attitude that will stand practitioners in good stead for future success is acceptance of accountability. To illustrate this point, I offer a vignette:

On March 13, 1998, APA’s Practice Directorate, in collaboration with the SAMHSA’s Center for Mental Health Administration, provided an opportunity for members of the Business of Practice Network (BOPN) to receive updates on numerous marketplace issues, including a briefing on the expressed concerns of employers and commercial “thought-leaders” regarding behavioral health benefits.

Reports derived from interviews and focus groups with this critical category of stakeholders revealed that they hold an extraordinarily jaundiced view of behavioral health benefits and providers.

Specifically, they believe that behavioral healthcare providers “cannot be trusted”; “are not prepared to be accountable for quality, cost or outcomes”; “lack a culture of quality and accountability and an infrastructure to measure outcomes;” and, in order to protect against risk, “must limit benefits” and “purchase care on the basis of price and utilization profiles.” (Quotations from meeting summary by Illinois BOPN rep, Alan Graham).

As troubling as these criticisms were, of equal concern to me was the collective response of the attending psychologists who reflexively concluded that these perceptions were off base, and that we needed to disabuse employers and benefit managers of their wrong-headed ideas.

I hold a different opinion! I view the proposal, to re-educate the purportedly misguided, as classic professional arrogance. It begs the issue of perceptual inaccuracy. I believe there is a solid basis for the negative perception. Therefore, I see the task not as an external (education) one but internal (self-examination). I suggest that we must begin by

  1. hearing what is being said about us;
  2. realizing that this unflattering view is based on experience with some of us;
  3. owning the hurtful criticism; and
  4. setting about to modify the behaviors of those of us who are responsible for the negative image.

None of this can be achieved, of course, without our believing we are accountable for delivering value to investors, or by resenting and resisting the idea that purchasers of care are entitled to approach us with ROI (return-on-investment) questions.

New Knowledge
I find psychologists uninformed about matters related to the healthcare context. Being poorly informed, by definition, precludes informed decision-making. Collectively, we need to become more knowledgeable of

  1. health care economics, particularly principles of supply and demand, allocative efficiencies, and perfect vs imperfect markets, etc;
  2. the history of healthcare services in the U.S., private and public;
  3. the scope of the pre-managed care problems in the health care triad: access (more than 40 million U.S. citizens are currently without health care insurance), cost (annual expenditure rates now exceed $1 trillion–yes, $1,000 million per year! and quality (excessive practice variation with same disorder patients is a serious problem in both somatic and BH care).

Apropos the latter point, a special concern expressed in one purchaser focus-group was, “Why is it that when we send a depressed employee to a psychiatrist s/he gets anti-depressant meds, to a psychologist for cognitive behavioral therapy, and to clinical social worker for family therapy?

Balanced view of Managed Behavioral Health Organizations MBHOs is needed
While we should continue to fight genuine MBHO abuses, I fear that many psychologists are harboring the hope that they can litigate and legislate their way back to the halcyon days of unfettered indemnity reimbursement.

Such thinking is quixotic, for it fails to acknowledge that managed care is being used by purchasers as a substitute for benefits-reduction and cost-shifting. The hypothetical elimination of managed care (a “known poison,” some would say) is likely to bring other, perhaps more Draconian, solutions for cost-containment.

Also, even without managed care, the recent increase in the supply of eligible providers would have the effect of reducing demand and compensation for psychologists’ (psychotherapy) services.

At the risk of being considered a shill for the managed care industry, I suggest that we acknowledge the industry’s contributions. A good beginning would be to realize that the U.S. health care system has always been a non-system–a patchwork quilt of uncoordinated services, fragmented administrative mechanisms, varied funding models, confused consumers–and, in some instances, incompetent or corrupt providers. If the U.S. is ever to develop a true system, it will incorporate the macro-managing capabilities developed by MC–capabilities made possible by the profit motive (This is America).

New Skills
Cost-containment and benefits rationing will be with America indefinitely. Therefore, independent practitioners seeking to maximize the probability of professional success would do well to master the following management skills:

Strategic Management. Develop and adhere to a strategic plan (and a marketing plan). Each is the antithesis of unproductive self-absorption. In such planning, one should consider the following:

  1. new interventions: avoiding the common mistake of being a “one-trick pony.” Unless the psychologist is prepared to compete with sub-doctoral practitioners willing to provide the same service for half the fee, don’t base your livelihood on administering one procedure code, viz, generic psychotherapy (90844).
  2. New patient populations: if you work largely with mainstream, adult populations, develop expertise with children, the elderly, or substance abusers. Also, with the increasing number of Medicaid programs being brought under managed care, there is a growing opportunity to treat public sector patients heretofore neglected by private practitioners.
  3. New settings: if you have been expecting patients to come to your office, deliver services that are convenient for someone else, e.g. in homes, schools, work-sites primary care physician (PCP) offices, or partial hospitalization programs (PHPs); and
  4. New alliances: shun the professional parochialism that characterizes the psychology discipline. Consider horizontal integration with other providers, e.g., group practices without walls (GPWWs) and Independent Practice Associations (IPAs), and seek vertical integration with providers/facilities offering different intensities of behavioral healthcare services, e.g., Practitioner/Hospital Organizations (PHOs).

Clinical Resource Management: Abandon the hackneyed, one-size-fits-all, once-per-week, 50-minute therapy-session boilerplate for all disorders. In its place, develop a vertically-organized, graded-intensity, variable-cost outpatient continuum that reflects real-world variation in disorder-acuity and co-morbidity. Track utilization metrics, and seek to become risk-qualified. Establish cross-referral relationships with community resources–not only treatment programs but mutual-support groups and (particularly if treating Medicaid enrollees) social service agencies that can provide often-needed “wrap-around” services. Stay close to the data. Reduce practice variation by adopting evidence-based guidelines and clinical algorithms for disorders you see frequently. Create treatment plans that derive from a coherent case formulation.

Quality Management. Know not only classic Donabedian formulations of quality assurance, but master the concepts of Total Quality Management (TQM) and Continuous Quality Improvement (CQI). Consider yourself ill-prepared for turn-of-the-century practice if you are unfamiliar with the work of W. Edwards Deming, Donald Berwick and John Wennberg. Remember that psychology is the study of behavior.

Incorporate some of the rigor of behavioral psychology into your professional work. Play from the strengths of your training. Revisit the scientist-practitioner model. Avoid the insidious practice of reifying hypothetical constructs. Don’t succumb to trendy diagnoses and fad therapeutics. Distance yourself from the nonsense that permeates the field.

Outcomes Management. Allow payers to determine if you are delivering the goods. Generate simple but meaningful pre-/post treatment outcomes data. Minimally, measure symptom relief, functional improvement, physical health status and patient satisfaction. Ideally, have at least three different sources of information from which to infer outcome, viz, clinician ratings, patient self-reports, and objective data. Value is currently defined as “quality divided by cost”; therefore, collect data on direct and indirect costs associated with treatment. Become a learning organization: create a feedback loop whereby outcomes data are used to improve practice guidelines.

I offer these ideas in the spirit of helpfulness, to provide some navigational bearings for traversing the unforgiving sea that is the new health care world. Admittedly, such suggestions are little more than hypotheses, but ones which are anchored both to real data and common sense, and which seem pre-eminently testable by the practical consequences of their application.

Lee McCabe, Ph.D. is Director of the Office of Behavioral Health Care, Department of Psychiatry and Behavioral Sciences, The Johns Hopkins School of Medicine, Baltimore. He was founder, owner and president of one of the largest, multi-site, multi-disciplinary, outpatient practices in the Maryland/Washington, DC area. Known as PSI, this organization was purchased in the early 1990s by a Maryland-based private psychiatric hospital. For the first three years’ operation of the APA Practice Directorate’s Business of Practice Network (BOPN), Dr. McCabe was Maryland’s representative.

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