Cost-effectiveness of alternative approaches in treating severely mentally ill in California

Given the rising costs of health care and the decrease in public expenditures on mental health care, policy-makers and program managers must identify cost-effective approaches for treating severely mentally ill patients. During the last year, there have been two major cost-effectiveness studies implemented in California. One initiated by Santa Clara County and funded by the National Institute of Mental Health compares the cost-effectiveness of two existing community-based treatment and case-management approaches. The other study, which compares the cost-effectiveness of capitation funding of services for the severely mentally ill, was initiated by the State of California and is currently being implemented in two counties. This article describes the cost-effectiveness evaluations of these two programs and provides preliminary results of the case-management program.