Prior hospitalization and age as predictors of mental health resource utilization in Israel

A two-part demand model based on data from a psychiatric case registry was estimated in order to search for predictors of hospital-based psychiatric care utilization. Using only age as an independent variable, explanation of future resource utilization is considerably weaker than when number of cumulative days of psychiatric hospital-based service use during the previous five years is also included. Only a small marginal gain is achieved by also adding diagnoses. Prospective remuneration by capitating sick funds according to age and past hospital-based service utilization records is recommended to avoid the twin pitfalls of cream-skimming and a distorted allocation of resources for psychiatric services.