Toward the financial integration of public mental health services.

The public treatment of seriously mental ill patients continues to be frustrated by the lack of administrative and financial integration of state and community mental health services. Several states have initiated attempts to improve the cost-effectiveness of public mental health services through mechanisms that create financial incentives fostering community-based alternatives to psychiatric hospitalization. Examples of such mechanisms include capitation financing systems, performance contracts, regional mental health authorities, utilization review, and bed-targets. This paper reviews evidence supporting the need for and success of these efforts, and also addresses their limitations.