Mental healthcare: expand with caution. There is more involved than financial incentives

Increased needs, insurance coverage, and physical expansion are evidence of mental healthcare's growth. Greater societal acceptance, the demand for more local care with deinstitutionalization, and liberal reimbursement have expanded mental health services. However, reduced federal funding and competition demand specialization in such areas as geriatric services. Ambulatory services make mental healthcare more affordable and accessible. Providers must target populations who use such outpatient care and study local trends before planning these programs. Inpatient mental health services continue to expand, although at a slower rate. Thus organizations and professionals have begun selective contracting, and capitation reimbursement based on case management is developing. Providers considering expansion or initiation of mental health services confront competitive marketing and must recognize trends in outpatient, chronically ill patient, and after-care services. Strategic planning is essential to uncover opportunities and potential risks. Other issues to consider include the psychiatrist shortage, uncertain payment systems, and a possible reversal of growing mental health services and declining acute care needs.