Hospital ownership and psychiatric services

Dramatic increases have occurred in the proportion of for-profit hospitals in the general hospital sector; even more pronounced increases have occurred within the psychiatric sector. Concomitant with this changing mix of ownerships, revised reimbursement plans are being proposed for psychiatry. Thus, providers of acute psychiatric inpatient care, although loosely aggregated, constitute a service system that is experiencing dynamic revision. This article examines the implications of these changes for health policy analysts and planners in the design of hospital payment mechanisms and in planning for resources to meet the needs of the public. The state of California is viewed as a system, and data from the state are examined to test traditional assumptions of economic behavior when less costly substitute services are available. The availability of services such as outpatient clinics, emergency psychiatric services, and partial hospitalization are found to vary according to hospital ownership. Differences in availability of these services influence the access to inpatient care experienced by various populations within the defined system. Although these services may permit earlier discharge from the hospital, the poor insurance coverage of ambulatory psychiatric care relative to inpatient hospitalization^1–3 distorts this effect. The implications of these findings for public policy are discussed.