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Surviving in an Era of Managed Care: Lessons From Colorado
David W. Van Gelder
Psychiatric Services 1992; doi:
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Bethesda PsycHealth System, 4400 East Iliff Avenue, Denver, Colorado 80222

1992 by the American Psychiatric Association

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Abstract

The experience of our private hospital in the managed care environment in Colorado in the last decade suggests several lessons for facilities in other states that may soon face a similar environment.•Avoid garnering too much business from one source. One Colorado institution that lost its primary contract closed its doors.•Redesign administrative practices in anticipation of change.•Plan for radically decreased lengths of stay. Redesign treatment programs, interventions, and staff utilization.•Avoid agreeing to contracts that do not coven costs, even in the short term. The success of an organization will not be found in trying singlehandedly to put other facilities out of business. The facilities that continue to operate in Colorado began working together to try not to duplicate each other's services.•Have an adequate information system in place. Data on costs per patient and treatment outcome are needed to show a managed care company why it should contract with a given facility to save money in the long term. Low daily rates do not necessarily bring in contracts if other factors, such as length of stay and readmission rates, are not acceptable.The times are challenging for mental health care. Not all facilities will survive, but those that do will be more effective in providing treatment and in containing costs. Facilities that have the flexibility to address the issues as they arise, or even before they arise, will be in prime position to continue offering their services in the coming decade.

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