A capitated payment system for involuntary mental health clients

This DataWatch examines an outpatient capitated payment system, in the state of Oregon, designed to enhance community services for persons with chronic mental illness who had repeatedly been hospitalized involuntarily. Special state funds and Medicaid dollars were used to pay providers prospectively on a risk-adjusted basis for the delivery of outpatient mental health services. During the three-year study period clients were able to be discharged from the state hospital. Although the data are not straightforward, capitated clients' use of the state mental hospital seems to have declined somewhat more than that of comparison subjects. Outpatient service use was modest and appeared to have little relationship to a client's level of illness severity. Indeed, it was not possible to predict prospectively these clients' outpatient mental health services expenditures.