Costs, needs, and outcomes.

There is a tendency in discussions of mental health policy and psychiatric practice to talk of the cost of a treatment, facility, or policy and to ignore variations. These variations can be considerable, which alone suggests they should not be overlooked, and they can be explored and perhaps exploited to improve the delivery of services. This article describes a theoretical framework for the examination of cost differences, applies it to a particularly rich data base on people with long-term mental health problems moving from hospital to the community, and uses the empirical evidence to address four key policy questions. The study finds encouragingly strong positive associations between costs, needs, and outcomes. It also uncovers significant cost-effectiveness differences between the public and private sectors and between community accommodation types.