Article Abstract

Article Abstract

Online ISSN: 1099-176X Print ISSN: 1091-4358
The Journal of Mental Health Policy and Economics
Volume 20, Issue 2, 2017. Pages: 75-82
Published Online: 1 June 2017

Mental Health Insurance Parity and Provider Wages

Ezra Golberstein^1* and Susan H. Busch²

¹Ph.D., Associate Professor,Division of Health Policy and Management,University of Minnesota School of Public Health,Minneapolis, MN, USA
²Ph.D., Professor, Department of Health Policy and Management,Yale School of Public Health,New Haven, CT, USA

*Correspondence to: Ezra Golberstein, Ph.D., Division of Health Policy and Management, University of Minnesota School of Public Health, 420 Delaware St. SE, MMC 729. Minneapolis, MN 55455, USA
Tel: +1-612-626 2572
Fax: +1-612-.624 2196
E-mail: \underlineegolber@umn.edu

Source of Funding: This study was supported by grants from NIMH (MH109783 and MH093414) and NICHD (5R24HD041023). The funders played no role in the design or conduct of the study; in the collection, management, analysis, or interpretation of the data; or in the preparation, review, or approval of the manuscript.

Abstract

Policymakers frequently mandate that employers or insurers provide insurance benefits deemed to be critical to individuals’ well-being. However, in the presence of private market imperfections, mandates that increase demand for a service can lead to price increases for that service, without necessarily affecting the quantity being supplied. We test this idea empirically by assessing whether mental health parity laws were associated with changes in mental health provider wages. Using average wage data measured at the state-, year-, and occupation level from 1999-2013 to estimate the association between the implementation of state mental health parity laws and the Mental Health Parity and Addiction Equity Act, and average mental health provider wages.Mental health parity laws were associated with statistically significant but modest increases in mental health provider wages. This result suggests that part of the value of expanding insurance benefits for mental health coverage was captured by providers.

Background: Policymakers frequently mandate that employers or insurers provide insurance benefits deemed to be critical to individuals' well-being. However, in the presence of private market imperfections, mandates that increase demand for a service can lead to price increases for that service, without necessarily affecting the quantity being supplied. We test this idea empirically by looking at mental health parity mandates.

Objective: This study evaluated whether implementation of parity laws was associated with changes in mental health provider wages.

Method: Quasi-experimental analysis of average wages by state and year for six mental health care-related occupations were considered: Clinical, Counseling, and School Psychologists; Substance Abuse and Behavioral Disorder Counselors; Marriage and Family Therapists; Mental Health Counselors; Mental Health and Substance Abuse Social Workers; and Psychiatrists. Data from 1999-2013 were used to estimate the association between the implementation of state mental health parity laws and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act and average mental health provider wages.

Results: Mental health parity laws were associated with a significant increase in mental health care provider wages controlling for changes in mental health provider wages in states not exposed to parity (3.5 percent [95% CI: 0.3%, 6.6%]; p < .05).

Discussion: Mental health parity laws were associated with statistically significant but modest increases in mental health provider wages.

Implications: Health insurance benefit expansions may lead to increased prices for health services when the private market that supplies the service is imperfect or constrained. In the context of mental health parity, this work suggests that part of the value of expanding insurance benefits for mental health coverage was captured by providers. Given historically low wage levels of mental health providers, this increase may be a first step in bringing mental health provider wages in line with parallel health professions, potentially reducing turnover rates and improving treatment quality.

Received 2 October 2016; accepted 28 February 2017