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Study notes growth of cash-only psychiatry practices

December 13, 2013
by Dennis Grantham, Editor-in-Chief
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If outpatient and solo-practice psychiatrists prefer cash, not insurance, then service access is going to be a problem
A new study led by researchers at Weill Cornell Medical College suggests that, just as more Americans with behavioral health disorders are on the verge of gaining access to commercial insurance or Medicaid, fewer and fewer of the nation’s psychiatrists are prepared to accept that coverage for payment.  

In the five years between 2005 and 2010, investigators found that the percentage of psychiatrists who accepted private insurance dropped by 17 percent, to 55 percent, and those that took Medicare declined by almost 20 percent, also to about 55 percent. Their acceptance of Medicaid is 43 percent, the lowest among all medical specialties.

"More than physicians in other specialties, psychiatrists accept lower rates of insurance, and those who don't take insurance are likely charging cash for their services," says the study's lead author, Dr. Tara F. Bishop, an assistant professor in the Department of Public Health and Medicine at Weill Cornell Medical College.

The number of psychiatrists is also quickly dwindling -- a drop of 14 percent from 2000 to 2008 -- because psychiatrists are retiring and medical students are not choosing to go into psychiatry.

"I must say we were surprised by the findings,” said Dr. Bishop. "No prior studies have documented such striking differences in insurance acceptance rates by psychiatrists and physicians of other specialties.” With an eye to the future, as demand for behavioral health services is expected to increase, she warns, “This is not a formula for success."

The investigators noted that their findings were based on a study group that included psychiatrists involved primarily in ambulatory care – care provided in private physician offices or group practices. The database does not include psychiatric outpatient clinics linked to hospitals or large medical centers. "Some patients with some of the most severe mental illnesses, such as schizophrenia or bipolar disease, may be cared for in those clinics, and this database does not capture that population," Dr. Bishop clarified.

The researchers don't know why psychiatrists are increasingly rejecting insurance payment; questions about motivation were not included in the survey. "But we can speculate that insurance provides lower reimbursement rates than psychiatrists feel cover the costs of care," Dr. Bishop says. Part of the reason for this reluctance may be that it takes considerable time -- typically, an hour or so -- to provide counseling and therapy, and therefore, psychiatrists may not be able to see as many patients in a day as physicians of other specialties can, Dr. Bishop says.

Additionally, more psychiatrists than physicians of other specialties practice alone - 60 percent - and accepting insurance entails considerable administrative work, she says. The study found that these solo practitioners are less likely to accept all types of insurance.