Public, private and voluntary residential mental health care: is there a cost difference?

To determine how public (NHS or local government), private (for-profit) and voluntary (non-profit) providers of residential mental health care compare. Do they support different clienteles? And do their services cost different amounts?

Based on a cross-sectional survey of residential care facilities and their residents in eight English and Welsh localities, the characteristics and costs of care in the different sectors (NHS, local government, private, voluntary) were compared. Variations in cost were examined in relation to residents' characteristics using multiple regression analyses, which also allowed standardisation of results before making inter-sectoral comparisons.

Private and voluntary providers of residential care support different clienteles from the public sector. The patterns of inter-sectoral cost differences vary between London and non-London localities. In London, voluntary sector facilities may be more cost-efficient than the other sectors, but local government/private sector comparisons show no consistent difference. Outside London, the results suggest clear cost advantages for the private and voluntary sectors over the local government sector.

Private and voluntary providers may have some economic advantages over their public counterparts. However, outcomes for residents were not studied, leaving unanswered the question of comparative cost-effectiveness.