How to ensure that the money follows the patient: a strategy for funding community services

Although the vast majority of chronic mentally ill patients now live in the community, most of the funds for mental health services have remained in the budgets of large state institutions. As a result, adequate community support systems have not been developed for chronic patients. The author developed a strategy that permits funds to follow the patients from the hospital to the community. He explains how, within a single fiscal year and without increased funds, a treatment program's budget can be divided between hospital and community services, patients can be moved into community residential settings, and institutional staff can be absorbed into existing vacancies. The strategy was implemented for a treatment program in a Louisiana state hospital, resulting in substantial savings in the per diem cost of care.