The carrott and the stick: inducing local programs to serve long-term patients.

Both financial and philosophical considerations have led to the dramatic shift in California of long-term patients from state hospitals to the community. Unfortunately local mental health programs frequently give low priority to the severely and chronically mentally ill. The state chose not only to engage in the wholesale discharge of patients from state hospitals but also to provide a number of financial inducements and penalties to motivate local programs to serve these patients. Although there have been many problems, local programs have developed a wide range of community treatment and rehabilitation programs for long-term patients.