As more Medicaid beneficiaries gain access to behavioral health treatment, peer support programs offer a lot of benefits, but cost savings may not be one of them.
While Medicaid peer support programs appear to help lower psychiatric hospitalization costs, a new study in the Medicare & Medicaid Research Review found that they're also associated with higher costs for prescription drugs and professional services, and higher costs per beneficiary in total.
Still, the self-directed therapeutic nature of peer support -- a hallmark of recent progressive approaches to mental health treatment -- may lead to better recovery and be worth the extra state funding, argue Glenn Landers and Mei Zhou, researchers at Georgia State University's Health Policy Center.
With peer support programs growing more common in Medicaid, Landers and Zhou did a retrospective study of the Georgia Peer Support Program, developed by the state Department of Behavioral Health and Developmental Disabilities in 1999, based on claims and administrative data spanning 2003 and 2004. They compared about 1,900 beneficiaries who received the peer support treatment to about 33,700 who didn't, with a little less than half of the subjects from both groups being eligible for Medicare in addition to Medicaid.
Those beneficiaries with peer support treatment had average costs of $79,216 during the two year period, compared to $60,848 for those who received behavioral health services without peer support.
Beneficiaries receiving peer group therapy did spend two fewer days, on average, in psychiatric hospitals and had lower corresponding costs -- $16,454 compared to $18,595 -- but drug costs about $2,900 more, $10,861 compared to $7,967.
The peer support program itself actually cost just $4,550 on average per beneficiary over the course of the two years, but that accounts for most of the extra per-beneficiary spending.
The extra costs for peer support were not necessarily surprising, Landers and Zhou wrote, because at the time, in 2003, there was a general lack of community-based behavioral health services in Georgia, as the state government hadn't fully begun to transition away from psychiatric hospitals until 2010.
The findings are surprising in at least one respect, though: "We might have expected to see increases in total Medicaid cost offset by reductions in the cost of crisis stabilization and psychiatric hospitalization," Landers and Zhou wrote. But "there were no significant differences between the treatment and comparison groups."
Whether or not that ends up bearing out in the long-term or varies by state should get more research, Landers and Zhou argue -- in addition to the larger question of whether "the benefits of peer support translate to improvements in an individual's physical as well as mental health."