Doctoral Dissertations

Date of Award

5-2001

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Economics

Major Professor

Milton Russell

Committee Members

Matthew N. Murray, Robert A. Bohm, Paul M. Jakus

Abstract

Tennessee's public mental health system was transformed from a fee-for-service program to a capitation-based managed care program in July 1996. Given the interest in alternative health care policies, the outcomes of such a refonn experiment were evaluated from the perspectives of cost-efficiency and cost-effectiveness. Monthly time series data on program expenditures, access, utilization, and quality of care were compiled for two distinct program periods: January 1994 to July 1996, the traditional fee-for-service period administrated by the Tennessee Department of Mental Health and Mental Retardation (TDMHMR); July 1996 to December 1998, the capitation-based managed care period administrated by the TennCare Partners Program tTPP). Utilization and quality of care functions were constructed for each period in which utilization (bed-days, services) and quality of care (recidivism rates) measures were assumed to be dependent on levels of program funding, positive demand for care (program users), and program payment characteristics (i.e., fee-for-service and capitation). The managed care impact was then tested with the hypotheses that the parameters of the TDMHMR ( FFS) form of the functions were the same as those given by the TPP (capitation) fonn of the functions. With the rejection of the hypotheses, funding parameters were assessed to identify the direction and mab'Tiitude of costefficiency and cost-effectiveness. Multi-variable linear ret:,Jfessions, SAS® Autoregression procedures, Chow tests, and maximum likelihood estimation were used in parameter estimations and outcome evaluation.

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