Economic evaluation in mental disorders: community versus institutional care

Psychiatric illnesses have been shown to have a dramatic economic impact. The concept of economic efficiency is particularly relevant in the field of psychiatry because of different factors such as the high prevalence, the chronicity or cyclical nature of many mental disorders and the duration of most of their treatments. Despite the international diversity of healthcare systems, most developed nations spend approximately 10% of their total healthcare expenditures on the treatment of mental disorders. The current trends, including growth of the outpatient sector with no decline in institutional costs and increasing evidence of less expensive care in community based treatment facilities, have been confirmed by several studies. The costs of mental disorders consist largely of direct costs involving healthcare expenditures and indirect costs resulting from loss of productivity by individuals because of illness or death. Both direct costs with specific emphasis on hospital care, and indirect costs represent the major economic burden of psychiatric disorders. While increased detection and treatment might add to direct costs for the health delivery system, effective treatment might avert greater expenses that would be incurred as indirect costs. Therefore, to be efficient, any new therapeutic interventions in psychiatry would have to reduce both hospital costs (number or length of admissions) and indirect costs (loss of productivity). Increasingly, the chronic mentally ill are treated in community based facilities. Several studies support the cost effectiveness of community based social psychiatric treatment versus inpatient care.(ABSTRACT TRUNCATED AT 250 WORDS)