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The consequences of budget cuts

Friday, Jul 25, 2014

* April 14, 2011

The Illinois Medicaid agency recently cut costs by moving numerous medications, including several anti-psychotics, to a non-preferred list. Some mental health advocates are saying the agency’s action will come at a high price for people with chronic conditions such as bipolar disorder and schizophrenia.

The Illinois Department of Healthcare and Family Services, the state Medicaid agency, maintains a list of preferred and non-preferred prescription drugs for patients, with mostly generics left on the preferred list. Effective April 1, the agency re-categorized a number of medications, including several name brand atypical anti-psychotics, as non-preferred. That means doctors who want to prescribe them to patients on Medicaid will have to obtain prior authorization from the department first.

This may result in people with chronic mental disorders not getting the specific medication they need, said Mark Heyrman, a professor at the University of Chicago law school and the facilitator for the Mental Health Summit, a coalition of mental health advocates and providers. As a result of going untreated, they might end up hospitalized or in jail, he said.

“This is a real risk for people with mental illnesses,” he said.

* August 15, 2012

In the past two years, Illinois has done just about everything it could to reduce the amount it spends on prescription drugs for mental health. It has placed restrictions on the availability of 17 medications used to treat depression, psychosis and attention-deficit disorder. Doctors now have to explain to Medicaid why the drugs are necessary before a patient can get access to them. Then in July, as part of an effort to cut overall Medicaid spending by $1.6 billion, the state capped the number of prescriptions for Medicaid recipients to four a month, even if they previously were taking a broader cocktail of behavioral medications.

In financial terms, there is no question that it has worked. Last year, the state’s Medicaid mental health drug spending budget was reduced by $112 million. The new cap on prescription drugs is expected to save another $180 million.

Up until 2011, behavioral health drug spending made up about a quarter of Illinois’ Medicaid prescription drug costs. The state spent about $392 million that year on drugs for treating mental health patients. In fiscal 2012, the state spent $280 million on mental health drugs.

But what are the implications for quality of care? Some physicians argue that they are disastrous. “It’s a mess,” says Dr. Daniel Yohanna, a psychiatrist at the University of Chicago Medical Center. “People who were stable on some drugs have been unable to get them. It has created a significant problem.”

* July 22, 2014

A team of researchers published data Tuesday in the American Journal of Managed Care showing that prior authorization policies in Medicaid programs have significantly higher rates of severe mental illness in their prison populations.

Schizophrenics living in states with prior authorization requirements in Medicaid were 22 percent more likely to be jailed for a non-violent crime than those in states without those restrictions.

“What’s novel in this paper is documenting a link between Medicaid policy and prison populations that’s never previously been looked at,” says Darius Lakdawalla, a professor at University of Southern California and study co-author says. […]

Another paper Lakdawalla has worked on, published this spring, found that states with prior authorization policies tended to see their spending on hospital spending go up faster. The idea here is that patients who didn’t receive anti-psychotic medication may have ended up having to take more trips to the hospital in order to control their symptoms.”In that respect, Lakdawalla says, “It doesn’t seem like you’re getting a lot of bang for the buck in reducing health care costs. There is collateral damage.”

The researchers don’t claim to prove that prior authorization policies cause higher rates of incarceration among the mentally ill. But what Lakdawalla does see in this study is a space for further exploration, of whether these Medicaid policies are having the unintended consequence of driving up incarceration rates of the mentally ill.

“From a policy perspective, this suggests there may be a link between underfunded mental health systems, criminal activity and cost-shifting onto the prison system,” he says. “It’s probably not all about prior authorization, but could be the larger mental health spending picture.”

…Adding… From Rep. Greg Harris…

Your post on the consequences of budget cuts relating to anti-psychotic meds for Medicaid patients and crime/incarceration and mental illness is one of the major reasons that we removed anti-psychotic drugs from the prior authorization list in SB741 that became effective July 1.

I am still working with providers and DHFS on other issues related to what drugs go on the preferred drug list of the formulary such as Concerta and Abilify, and even a quirk in policy that was brought to my attention by Lurie Childrens hospital yesterday that when Medicaid patients turn 19 there is a problem with continuation of ADHD medications.

- Posted by Rich Miller        


23 Comments
  1. - Waffle Fries - Friday, Jul 25, 14 @ 10:56 am:

    light bulbs starting to go off


  2. - Percival - Friday, Jul 25, 14 @ 11:00 am:

    Cutting costs on the mentally ill is a politically cheap way to save money. They don’t vote, they don’t have a union, they can’t strike, and their support groups, like Friends of the Mentally Ill, don’t have a killer instinct or a big budget. Of course, they are among the most defenseless in our society, are a very worthy subject of government spending, and should be first in line for help, but won’t be.


  3. - Aldyth - Friday, Jul 25, 14 @ 11:16 am:

    Working in the field, we have a saying. Every single thing you can teach or help the person function well enough to do for themselves is one less thing that you have to do for them.

    It costs less to have the person function better and do for themselves than to have to hire someone to do it for them.


  4. - Formerly Known As... - Friday, Jul 25, 14 @ 11:21 am:

    One must wonder how much stories like this are a result of budget cuts, and how much is a result of poor planning and choices.

    Yesterday’s posts offered a perfect example of this. We have money for bronzed doors, ornate chandeliers and staircase maidens in the Capitol. But not basic repairs in the Thompson Center.

    Perhaps we should have delayed a few of the chandeliers or maidens for the time being and called Empire Carpet instead.


  5. - Been There - Friday, Jul 25, 14 @ 11:27 am:

    ===The Illinois Medicaid agency recently cut costs by moving numerous medications, including several anti-psychotics, to a non-preferred list====
    Any savings they realize in the short term will probably be eaten up by the increase in crime and the costs associated with the courts and prisons.


  6. - Ghost - Friday, Jul 25, 14 @ 11:29 am:

    another problem wit this is you have to taper medication cyhanges to avoid severe problems. this change potentially will stop people cold turkey and that can lead to susbtanial increased risks of suicide and/or violence. what is the plan to quickly review requests for approval and how do you taper into other drugs with a hard cut off date…


  7. - Budget Watcher - Friday, Jul 25, 14 @ 11:44 am:

    Cuts have consequences. The Governor’s mansion, the Thompson Ctr, medicaid drug formulary, the Murray closure, etc. It’s difficult to operate the state with the resources we have. And, it’s very likely to get worse before it gets better.


  8. - Norseman - Friday, Jul 25, 14 @ 11:48 am:

    This is extremely unfortunate. These medications do wonders in treating so many people. With the meds, they can live normal lives. Without them, they can be a danger to themselves and others.


  9. - zatoichi - Friday, Jul 25, 14 @ 11:57 am:

    Are they implying that policy that looks great on an Excel spreadsheet may not work well in a complicated, real world setting? Who would have thunk that?

    ‘this suggests there may be a link between underfunded mental health systems, criminal activity and cost-shifting onto the prison system’. May be a link? Ask Tom Dart about the explosive growth of psychiatric care at Cook County jail.


  10. - Jerome Horwitz - Friday, Jul 25, 14 @ 11:57 am:

    If the mentally ill that are now in the community were in state operated facilities (many of which have been closed in recent years), you can bet that they would get the medications that they need.


  11. - dupage dan - Friday, Jul 25, 14 @ 12:03 pm:

    Let’s face it, the mentally ill are not a powerful constituency. In addition, increased incarceration costs are not easily teased out of the system. You already have the facility and the guards. Crowd in a few more folks and all it costs are a few more meals and increased laundry bills.

    I am not being snarky here. It is well known that the DOC is the largest provider of services for the mentally ill. Local lock-ups, County Jails and State Prisons are the default providers. At least they’re getting 3 hots and a cot - that may well be the mind-set.


  12. - Cassandra - Friday, Jul 25, 14 @ 12:08 pm:

    How does Medicare handle the pre-authorization issue? Policies issued through Obamacare vendors? There should be a universal best practices standard of care, but that shouldn’t necessarily be “any drug the doctor prescribes under any circumstances, generic or not.” The abuses of the pharmaceutical industry are legion.


  13. - DuPage - Friday, Jul 25, 14 @ 12:12 pm:

    Decades ago, many mentally ill people were in mental health centers. To save money, when medications became available, many were given a bottle of pills and walked out the front gates. Many lost or forgot to take their pills, reverted back to their illness, and became homeless. Severe problems happened because there was no mechanism to be sure the ones that needed the medicines actually getting and taking the medicines. Now I read a lot of inmates at Cook Co. Jail are actually mentally ill being held for many months AWAITING trial on minor offences. The jail is ending up a de-facto mental institution. So how much savings were really accomplished?

    So this new cutback by the state is probably going to do a lot of similar damage, the costs are going to show up on someone else’s budget line.


  14. - Formerly Known As... - Friday, Jul 25, 14 @ 12:32 pm:

    This sort of thing is just as much a “cost shift” as a “spending cut”, if not more.

    We are shifting the most expensive patients from our public health system to our public incarceration system.


  15. - VanillaMan - Friday, Jul 25, 14 @ 12:47 pm:

    They are not cutting all psychopharmaceuticals from the list. If you are need this kind of drug, you have to prove it, be monitored and use a drug from the list.

    A number of these drugs are brand name formulas with similar chemical properties and responses as the cheaper versions. Taking those expensive brands off the list only makes sense.


  16. - OLK 73 - Friday, Jul 25, 14 @ 12:54 pm:

    How much of these cuts could have been avoided if basic budget principals would have been followed? Like funding the pensions every year? The can that was kicked down the road ended up in concrete and won’t move.


  17. - Budget Watcher - Friday, Jul 25, 14 @ 1:26 pm:

    Agencies are faced each year with the choices of bad cuts or worse cuts. It’s refreshing to know how many of you arm chair experts are able to know in hindsight what should have been cut.


  18. - Aldyth - Friday, Jul 25, 14 @ 2:37 pm:

    Vanilla Man, you’d be surprised at how even small differences between a generic and the name brand produces differences in an individual’s functioning. Besides, the newest drugs are the most expensive and not available as a generic. Switch a person from an expensive drug that is working and allowing him to function to a less expensive drug that leaves him functioning less well can result in a part-time job that’s lost or a screaming rage in a grocery store and cops being called. You can pay one way or pay another, you might want to really decide which is the least expensive way to go.


  19. - Arthur Andersen - Friday, Jul 25, 14 @ 2:40 pm:

    VM-I don’t know what you do in your day job, but if you have anything to do with “prior auth” processes then a lot of what you post here about bureaucracy is quite ironic.

    Ask any State worker or retiree who suffers from migraines about the joke of “prior auth” for migraine-killing meds and the double joke of “well, you’ve used your quota of $15 pills for the month so go spend $600 at the doc and we’ll cover that.” I know that goofiness wastes several grand a year on one retiree alone-the total tab statewide must be huge.

    Kudos to the always-with it Greg Harris for stepping in with a timely solution to a much more egregious problem.


  20. - steve schnorf - Friday, Jul 25, 14 @ 3:31 pm:

    Real consequences to insufficient funding; what a shock. Multiply this times many and you see the results of the actions of those who claim you can do more with less. Perhaps for a short time or a short distance, but most of the easy things got done many years ago. And BW is right, it’s not going to get any better


  21. - Anonymous - Friday, Jul 25, 14 @ 3:36 pm:

    Actually, VM is right. Prior authorization in Medicaid only means that - prior authorization. Make your case. The dirty little secrets are that most of the changing of medications because of prior authorization occurs not be cause the state says no, but because the doctor doesn’t want to bother to ask - a waste of his/her time - and therefore switches. And most of the push back, lobbying and drumming up of sad stories is not from advocates for patients but PR firms for Pharma companies, whose profits are affected by these policies. Remember that new drugs are approved by FDA NOT because they have been shown to be better than something already on the market or a generic; just that they are better than a placebo. By and large there is no comparative effective research out there (or there wasn’t until the ACA)and Pharma does a marvelous job misleading legislators and the public that prior authorization is bad.


  22. - steve schnorf - Friday, Jul 25, 14 @ 4:31 pm:

    actually there’s quite a bit of real time research to see if you’re a friend or family member of a person with serious mental illness. Different drugs, and different combination, many of them off label, work less well or better than others and affect each unique individual quite uniquely. Your psychiatrist can’t explain why but simply keeps trying to find a drug or a combination that works, at least for a while


  23. - Jil Petrie - Tuesday, Jul 29, 14 @ 7:52 pm:

    My son was denied his medication 7 days before junior final exams in May of 2014. This is absurd. We as a family struggled for almost 4 years to find the right combination of meds that allow him to function, thrive, learn, and be himself. We are now on a different course of meds which are not as effective and have set him back. How can it just be decided that my son does not deserve the medication that makes him happy, healthy, and successful ??


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