October 19, 2001

Managed care has become an integral and expanding part of the U.S. health care system. The structure of managed care in the behavioral health system continues to undergo change. Many public sector and other substance abuse and mental health programs are now managed by public sector agencies or public or private partnerships rather than by private managed care organizations.1 Contracts between State Medicaid and managed care organizations have increased in complexity. There is growing concern about the impact of managed care on substance abuse treatment2 and, indeed, one of the strategic goals of the Substance Abuse and Mental Health Services Administration (SAMHSA) is to improve managed care outcomes.  This report uses information from SAMHSA’s Uniform Facility Data Set (UFDS) survey to examine trends in the number of substance abuse treatment facilities that contract with managed care organizations. UFDS is an annual survey of all facilities in the United States, both public and private, that provide substance abuse treatment. Information on managed care contracts has been collected in the UFDS survey since 1995. The number of facilities reporting to UFDS increased by 42 percent between 1995 and 1999 (Table 1). SAMHSA has continued efforts to expand survey coverage and to improve response rates. Prior to 1995, UFDS surveyed only facilities that were administratively monitored by State or Federal agencies. In that year, SAMHSA began to identify and survey other facilities, such as privately owned and hospital-based treatment facilities, that had not been included in the UFDS survey universe.

Facility Ownership Ownership indicates the type of entity owning or responsible for the operation of the facility. Categories used in the UFDS survey are private for-profit, private non-profit, and local, State, Federal, or tribal government (Table 1). Expanded survey coverage resulted in an increase of 70 percent between 1995 and 1999 in the number of private for-profit facilities. The number of private non-profit facilities increased by 39 percent. Despite these substantial increases, the overall structure of the treatment system (as reflected in UFDS ownership data) remained relatively constant. In 1999, private non-profit facilities made up the bulk of the system (60 percent), followed by private for-profit (26 percent), local government (7 percent), State government (4 percent, Federal government (2 percent), and tribal government (1 percent).

Table 1. Number of Substance Abuse Treatment Facilities, by Ownership: 1995-1999	Figure 1. Percent of Facilities with Managed Care Contracts, by Ownership: 1995-1999
1995 1996 1997 1998 1999  Total 10,746 10,641 10,860 13,455 15,239 Private Non-profit 6,514 6,482 6,498 7,489 9,077 Private For-Profit 2,342 2,373 2,550 3,775 3,976 Local Government 877 868 887 1,105 1,134 State Government 522 455 483 589 555 Federal Government 339 323 293 317 321 Tribal Government 152 140 149 180 176

Source: SAMHSA Treatment Episode Data Set (TEDS).