Multiple studies show significant reductions in hospital admissions and length of stay for patients on atypical antipsychotics when compared to patients taking typical antipsychotic medications.
Increased costs for medications... may reflect a shifting of costs from provider driven services to pharmaceutical costs.

Between July 1, 1996 and March 31, 1997, 13,083 patients received antipsychotic medications (ADHS, DBHS) with 11,081 categorized as SMI. This is approximately one half of the 22,454 SMI patients served through state programs; thus they constitute a disproportionate share of the SMI population.

Schizophrenia is one of the primary psychotic conditions. Schizophrenic patients are usually diagnosed during adolescence or young adulthood, just about the time they are ready to enter the work force to become productive citizens. The disease is characterized by "positive" symptoms such as delusions, hallucinations, or disorganized speech and behavior. Other symptoms are "negative" or deficit symptoms, such as withdrawal, apathy and a flattened affect, hopelessness and severe depression with thoughts of suicide and problems with logical thinking and attention (NIH 1995, No. 95:3929). Control of "positive" psychotic symptoms is not enough to return patients to normal functioning. The other symptoms surrounding schizophrenia still offer significant barriers to patient social and rehabilitative therapy and reintegration to society. The full range of symptoms must be controlled if the patient is to function satisfactorily (or at all) in either the family or societal settings.

Schizophrenia is a permanent condition with patients experiencing periodic flare-ups. Medications in the right dosage and over the correct length of time can help control the disease, reduce the rate of relapse, and improve the potential for more normal functioning. There is no time limit on schizophrenia, and many schizophrenics' lives continue to be compromised by their illness.

Antipsychotic Medications

Antipsychotic medications (neuroleptics) are grouped as the older "typical" drugs and the newer "atypical" drugs. Both sets of medications are effective in reducing positive psychotic symptoms. It is the newer atypical drugs, however, that have an appreciable effect on the negative mood and cognitive symptoms. Some negative symptoms that patients experience may actually be caused by the older medications, thereby making use of the newer medications even more important if patients are to resume social roles and live more comfortably with self, family, and the community (Tollefson 1997 and Interviews).

The ability to maintain the right dosage of a medication over time depends largely on whether a patient is willing to continue taking the medication. All of the antipsychotic drugs have some side-effects, or unintended consequences.

  • Typical antipsychotics often "caused neurological (hence the term 'neuroleptic') symptoms such as unwanted muscular movements (or extrapyramidal reactions), dizziness, and dry mouth." (Gelenberg 1999, p.1). The unwanted muscular movements can become severe. There is no effective treatment available once the condition develops (NIH: No 95.3929). An estimated 50 percent or more of patients may drop out of treatment in the first year (Kane 1987). Of those that remain in treatment, 70 percent are estimated to respond to the medications (Kane 1993).

  • Atypical antipsychotics "do not appear to cause the neuroleptic or extrapyriamidal symptoms seen in the older generation of medicines." (Gelenberg 1999, p.11). Sleepiness, dizziness, headache, sexual dysfunction and other symptoms may occur, but the severity is usually at a level where patients can, and will, continue taking the medications. An extensive clinical literature on these medications has established their efficacy and safety. Emerging clinical guidelines and guidance from the Health Care Financing Administration (HCFA), the Federal administrator of Medicare and Medicaid, (DHHS/HCFA letter, February, 1998) suggest new patients should be started on the "atypical" drugs because of their greater impact on all symptoms and the patient's ability to better tolerate the drug. If patients are well managed on their medications, however, switching them from older to newer drugs or from one new drug to another new drug may pose a risk simply by disrupting the existing balance (Interviews). Decisions on which drugs to use must be made on a case by case clinical basis.

In 1990, medications represented 2 percent of the direct cost of care for schizophrenics, but they are expected to represent nearly 10 percent of the cost by 2000 (Glazier 1998). (Expenditures for all pharmaceuticals grew 14.1 percent in 1997 compared to an overall growth in National Health Expenditures of 4.8 percent. {Willis 1999}). Older drugs average $25 per person/per month (Value Options 1999). The Arizona Department of Health Services used a monthly estimated cost of $270 per person/per month in its 1999 budget request for additional funding of "atypical" medications. Ten million dollars in new money was subsequently appropriated, which is projected to allow approximately 70 percent of the population in need to have access to the newer antipsychotics This is nearly five million dollars less than the amount projected to allow up to 90 percent of the patients who need these medications to receive them.

Schizophrenics consume a higher proportion of hospital bed days than any other mental illness (Loebel et. al. 1998). Multiple studies show significant reductions in hospital admissions and length of stay for patients on atypical antipsychotics when compared to patients taking typical antipsychotic medications. (Meltzer et a. 1993; Lindstrom et al. 1995; Viale et al. 1997; McCollum 1997). Differences in hospital usage and length of admissions by state programs, fee-for-service and managed care delivery systems make it difficult to generalize about the number of days saved when a patient uses atypical antipsychotic medications. Any reduction in bed utilization, however, results in reductions in direct care costs and an opportunity for schizophrenic patients to live in the community rather than an institutional setting.

The final 1999 ADHS budget request assumed use of three fewer hospital days, on average, for patients on atypical medications. Wulkan (1999) conducted a study of patients on atypical medication in the Nevada Division of Mental Hygiene and Mental Retardation, a neighboring state. He found an average of four days reduction in the length of hospital stay and an overall 46.4 percent reduction in costs. He also found increases in housing days (12.7 percent ) and costs (13.2 percent) for patients on atypical antipsychotics who were able to live in the community instead of the hospital. Costs for ambulatory crisis management dropped 15.5 percent while counseling services increased 59.7 percent. Overall, Nevada's costs for services (not related to hospital or medication costs) for patients taking atypical antipsychotics increased 13.3 percent, or $5.44 per day.

Studies on costs, or cost savings, for SMI patients in settings outside the hospital are limited, of short duration, or are still underway. Increased costs for medications, however, may reflect a shifting of costs from provider driven services to pharmaceutical costs. (Loebel et al. 1998), Olfson (1999), McFarland (1996) and Druss & Rosenheck (1997) suggest there may be only limited cost savings or offset for medical rather than mental health care for SMI patients. Clinical effects of the newer medications result in a significant improvement in patient satisfaction, perceived quality of life and ability to be productive. Proactive studies are needed, however, to demonstrate the impact on patients and systems as new antipsychotic medications allow these individuals to more actively participate in community based care and living settings.

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