The impact of realignment on utilization and cost of community-based mental health services in California

Decentralization of California's public mental health system under program realignment has changed the utilization and cost of community-based mental health services. This study examined a sample of 75,951 users, representing 1.5 million adults who visited California's public mental health services during a 6-year period (FY 1988-1990 and FY 1992-1994). Regression analysis was performed to examine cost and utilization reduction over time, across regions, and across psychiatric diagnoses. Overall utilization and cost of community-based mental health services dropped significantly after the implementation of realignment. They were significantly lower for (a) 24-hour services in the urban industrialized Southern Region and (b) outpatient services in the agricultural Central Region of the state. Users diagnosed with mood disorders took a greater portion, but were associated with significantly less treatment and cost than other users in the post-realignment period. When local communities bear the financial risks and rewards, they find more efficient methods of delivering community-based mental health services.