Costs are ratcheted down, and the glut of caregivers, psychiatrists included, allows plans to use less costly psychologists and social workers to perform most of the therapy. Critics and supporters alike credit managed care with reducing the expensive and dehumanizing institutionalization of the mentally ill. Enormous savings have been generated in hospital treatment. Managed care systems in Southern California have cut hospital stays for commercially insured patients from 350 days per 1,000 enrollees a decade ago to between 125 and 150 today. In the most severe cases in child-adolescent psychiatry, cuts in hospitalization have been proven not only possible, but beneficial.
Hospital stays and the number of psychiatric beds are declining steadily.
For health care to be affordable for all, costs must be controlled. To do so, the supply and distribution of physicians must be regulated. This is the first thing that managed care does, making sure that every physician has enough patients and sees enough real disease to stay competent and has no motivation to overtreat in defense of the bottom line. I am not a fan of managed care. As physician supply and distribution are brought under control, I foresee a resurgence of private practice and a lessening of the level of managed care required.