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Toward Greater Equity and Efficiency in Rate Setting: The Adult Residential Rehabilitation Programs in Massachusetts

Lee, A. James PhD; Cornish, Matthew R. MA, LADC I

Journal of Public Health Management & Practice: July/August 2008 - Volume 14 - Issue 4 - p 387–395
doi: 10.1097/01.PHH.0000324568.18275.2d
Commentary

In FY 2001, the Massachusetts Bureau of Substance Abuse Services contracted with 64 adult-only residential rehabilitation facilities. All were paid on an undifferentiated class rate basis at $55 per resident-day. This study uses cost and other information from program-submitted Uniform Financial Reports to measure the facility-specific costs of providing residential rehabilitation services, distinguish the program and site-specific factors responsible for the facility cost differences, and then use this information to suggest alternative, more equitable, and more efficient approaches to rate setting. This analysis finds that a uniform rate structure is substantially inefficient and inequitable.

This study uses cost and other information from program-submitted Uniform Financial Reports to measure the facility-specific costs of providing residential rehabilitation services and uses this information to suggest alternative, more equitable, and more efficient approaches to rate setting.

A. James Lee, PhD, is Associate Professor, Department of Community Health and Sustainability, School of Health and Environment, University of Massachusetts, Lowell.

Matthew R. Cornish, MA, LADC I, is Director of Policy for Purchase of Service, Massachusetts Executive Office of Health and Human Services.

Corresponding Author: A. James Lee, PhD, Department of Community Health and Sustainability, School of Health and Environment, University of Massachusetts, Lowell, MA 01854 (AJames_Lee@uml.edu).

The authors thank Deborah Klein-Walker, then Assistant Commissioner for the Massachusetts Department of Public Health, for her support and assistance with the project. The authors also thank the many residential rehabilitation providers who participated in site visits or otherwise contributed to study efforts.

© 2008 Lippincott Williams & Wilkins, Inc.