Strategies to Reduce Hospital Care: Literature Review

Strategies Used by Managed Behavioral Health Organizations to Reduce Hospital Care

Ye Zhang, Institute for Behavioral Health, Schneider Institutes for Health Policy, Heller School for Social Policy and Management, Brandeis University

December 2015


Psychiatric inpatient care accounts for a large part of the growth of the share of behavioral health medical expenditures in the US. Managed Behavioral Health Organizations (MBHOs) are companies that specialize in applying managed care techniques to provide high quality behavioral health services at low cost. A substantial evidence base shows that MBHOs in the US successfully reduce inpatient hospitalizations.

This paper has reviewed the following strategies that MBHOs use to reduce inpatient care: setting utilization management, effective transition from inpatient to community, maintaining a selective provider network, risk-sharing for providers to discourage inpatient care, and creating special programs for persons at with high risk of hospitalization. These strategies are usually adopted by MBHOs in combination, and they successfully reduce the number of admissions and shorten length of stay.

However, adverse side effects of these stratgies exist, e.g. disproportional reduction of care on children and persons with severe mental illnesses, and the increasing risk of readmission. The number of studies on adverse side effects of MBHOs strategies is limited, thus when implementing the strategies to control utilization of inpatient care, overly aggressive utilization management should be avoided, especially of children, adolescent, and persons with serious mental illnesses.

Back to MJB-Brandeis Collaboration on Mental Health