Comparing the Medical Productivity of Providers Treating Elderly Patients with and without Mental Illness

Abstract In this paper, a Medical Productivity Index (MPI) is applied as a metric to capture the value of care received by mental health patients from medical providers.  Specifically, a metric of the welfare gains of care financed by insurance on individual consumers is needed.   For the health sector, such a metric could address the growing concern that medical care expenditures are sapping the economic vitality of a nation if these outlays show a productivity gain.  The conceptual model behind a productivity metric is based on an economic production function for health outcomes at a patient level. 

The MPI is applied to a national sample of US commercial, Medicare fee for service and Medicare Advantage 2007-2011 claims data representing over 52 million covered lives.  Application of the MPI shows both a cyclical and long term trend in medical care productivity.  We find patients with mental health conditions experience 75% (p<.05) less productivity than patients without mental health conditions over a three year period of time.  There are substantial regional variations in MPI as well.  Extensions of the MPI could provide disease and insurance contract specific sub-sector component comparisons in future applications.  They could also be used to gauge the effectiveness of mental health parity law changes in the US.  The use of MPI to retrospective claims and contemporary claims data provides a technology to track changes in medical productivity for mental health patients to gauge the impact of future health reform and medical technologies as well as an aging society to patients and the health care industry.