Cost shifting to jails after a change to managed mental health care

Health Serv Res. 2004 Oct;39(5):1379-401. doi: 10.1111/j.1475-6773.2004.00295.x.


Objective: To determine whether managed mental health care for Medicaid enrollees in King County, Washington, has led to indirect cost-shifting to substitute treatments, such as jails and state mental hospitals that are free goods to providers.

Data sources: Complete service records for 47,300 adults who used at least one of the following systems from 1993 to 1998: King County jail system, Medicaid, or the King County mental health system. Data were also obtained from the Washington State Hospital System.

Study design: A quasi-experimental analysis that compares the difference in outcomes between the pre- and post-managed care periods for Medicaid enrollees compared to non-Medicaid enrollees. The outcomes-jail costs, state hospital costs, and county outpatient mental health costs-were estimated with two-part difference-in-differences models. The regressions control for person-level fixed effects on up to 66 months of data per person.

Data collection methods: Administrative data were collected from the jail, Medicaid, and mental health systems, then merged and cleaned. Additional data on costs were obtained in interviews.

Principal findings: There is a striking increase in the probability of jail use for persons on Medicaid following the introduction of managed care. There was a significant decrease in expenditures in the county mental health system for outpatient care.

Conclusions: Managed care led to indirect cost-shifting, probably through poor access to services, which may have led to an increased probability of jail detention.

Publication types

  • Research Support, Non-U.S. Gov't
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Adult
  • Cost Allocation*
  • Female
  • Health Expenditures
  • Health Policy
  • Hospitals, Psychiatric / economics
  • Hospitals, Psychiatric / statistics & numerical data
  • Hospitals, State / economics
  • Hospitals, State / statistics & numerical data
  • Humans
  • Linear Models
  • Male
  • Managed Care Programs*
  • Medicaid*
  • Mental Health Services / economics*
  • Mental Health Services / statistics & numerical data
  • Middle Aged
  • Models, Econometric
  • Prisons / economics*
  • Prisons / statistics & numerical data
  • United States
  • Washington