The Impact of Realignment on Utilization and Cost of Community-Based Mental Health Services in California

Decentralization of California's public mental health system under program realignment has changed the utilization and cost of community-based mental health services. This study examined a sample of 75,951 users, representing 1.5 million adults who visited California's public mental health services during a 6-year period (FY 1988–1990 and FY 1992–1994). Regression analysis was performed to examine cost and utilization reduction over time, across regions, and across psychiatric diagnoses. Overall utilization and cost of community-based mental health services dropped significantly after the implementation of realignment. They were significantly lower for (a) 24-hour services in the urban industrialized Southern Region and (b) outpatient services in the agricultural Central Region of the state. Users diagnosed with mood disorders took a greater portion, but were associated with significantly less treatment and cost than other users in the post-realignment period. When local communities bear the financial risks and rewards, they find more efficient methods of delivering community-based mental health services.