This month, as part of our 50th anniversary observance, we look back on 1965 and the creation of Medicare and Medicaid, which dramatically changed the role of the federal government in financing health services and led to a major restructuring of the mental health service delivery system. A conference report reprinted from the October 1965 issue summarizes the discussion at an American Psychiatric Association conference called to formulate recommendations for standards of psychiatric care in institutions that wished to participate in Medicare programs (see page 461). Health economist Richard G. Frank, Ph.D., traces the changes in health care that followed the enactment of Medicaid and Medicare and describes how the two programs encouraged the emergence of markets for mental health care and the delivery of services by private-sector providers (see page 465)…. In the Taking Issue column, Mark Schiller, M.D., contends that Medicaid and Medicare have created an overregulated, inefficient medical market in which the cost of care is far too high (see page 415).

Managed care companies are widely perceived as attempting to reduce expenditures by denying payment for medically necessary care. Brian Cuffel and his associates at United Behavioral Health, a large managed care organization, examined that perception in a survey that asked 190 patients and their providers why outpatient treatment was terminated. They found that in more than 75 percent of the cases, treatment ended because patient and provider agreed that treatment goals had been partly or completely met. Only a small percentage said treatment ended because the managed care organization had denied ongoing treatment. Generally, however, individual patients and their providers showed little agreement about the reason treatment was terminated (see page 469).

Substance use disorders are common among patients who seek treatment in psychiatric emergency services, but opinion is divided over whether all patients should routinely be given urine tests for substance use. Mark J. Schiller, M.D., M.S., and his coauthors report on a study of the utility of mandatory urine screening among nearly 400 psychiatric emergency service patients who were randomly assigned to mandatory drug screening or usual care. They found that mandatory urine screening did not affect referral decisions, that the two groups did not differ in length of inpatient stay, and that emergency service clinicians were generally accurate in assessing substance use. In view of those findings, they conclude that there are no compelling reasons to use urine screens routinely in the psychiatric emergency service (see page 474).

Two papers in this issue examine the long-term effectiveness of supported housing programs for homeless persons in New York City. Frank R. Lipton, M.D., and associates conducted a five-year follow-up of almost 3,000 homeless persons placed in high-, moderate-, and low-intensity supported housing sponsored by the city. They found that 75 percent were continuously housed for one year and 50 percent for five years (see page 479). Sam Tsemberis, Ph.D., and Ronda F. Eisenberg, M.A., report on a five-year study of the Pathways to Housing program, which provides immediate access to independent scatter-site apartments for persons with psychiatric disabilities who are homeless and living on the streets. The study found that 88 percent of the program's tenants remained housed after five years, compared with 47 percent of residents in the city's residential treatment system (see page 487).

The high cost of many of the newer psychotropic medications has led some state mental health programs and managed care organizations to restrict access to the drugs, but a study by Carl I. Cohen, M.D., and Sara I. Cohen proposes another option: pill splitting. Their analysis of 12 of the new drugs shows that up to $1.45 billion can be saved annually if psychiatrists and other physicians would write prescriptions for higher-strength pills that patients could split in half (see page 527).

•Thomas Grisso, Ph.D., writes about the growing trend toward treating juvenile offenders charged with criminal offenses as adults (see page 425).

•In the Economic Grand Rounds column, Martin Fleishman, M.D., Ph.D., discusses why increased government scrutiny of the use of Medicare's medication management procedure code is detrimental to patient care (see page 457).

•The books section opens with a review of Girl, Interrupted, along with comments on the recent film, followed by a review of the second edition of Psychiatry and the Cinema (see page 536).