Community mental health program efficiency

Six urban community mental health centers participated in a capitated payment system designed for persons with severe mental illness who frequently used the state hospital. The centers and their funding agency agreed that a chief outcome measure would be the length of time clients were able to remain enrolled in the outpatient program. Clients of the six agencies were quite similar to one another. During the 18-month study length of enrollment in the outpatient program did not vary among the agencies whereas agency expenditures varied by more than three-fold. Although some of this expenditure variation was due to economies of scale at larger agencies, different practice styles also contributed to variable efficiency.