Development and utilization of incentive systems for mental health operations: successful and unsuccessful knowledge...

Based on the effort to develop a comprehensive and effective management system for mental health services in Los Angeles, an incentives model is proposed as a general managerial approach for any mental health organization. The successes and failures of strategies to improve a large state (California) and county (Los Angeles) mental health delivery system are reviewed and evaluated. During a six-year period ending in 1984, using an incentives approach, Los Angeles County services to the seriously mentally ill increased, staff morale improved, hospital utilization decreased, residential treatment facilities increased by six times, and high costs per unit of service fell to competitive levels. Care shifted from the hospital to the community, and regional resources were partially redistributed to become more in line with patient needs. However, severe budget cuts consumed operational economies and political resistance hampered efforts to redistribute regional resources. A radical state-level reorganization is proposed to focus responsibility and to avoid county governance.