Abstract
Many U.S. employers have carved substance abuse and mental health services out of their medical plans, changing the way millions of people access care. Employers that take this approach contract directly with specialized vendors, bypassing their general health plans. Since carving out may alter access and treatment, there is a need to understand why employers take this approach. This article reviews various hypotheses about why purchasers carve out and tests them using data from a survey of America's largest employers, the Fortune 500 firms. Size is the strongest predictor of an employer's decision to carve out behavioral health once other characteristics are controlled for. Employers that report they value coordination are less likely to carve out, while those that value special expertise are more likely to carve out. Employers are less likely to carve out enrollees in health maintenance organizations (HMOs) than those in other types of plans.