Cost and cost-effectiveness of hospital vs residential crisis care for patients who have serious mental illness

BACKGROUND: This study evaluates the cost and cost-effectiveness of a residential crisis program compared with treatment received in a general hospital psychiatric unit for patients who have serious mental illness in need of hospital-level care and who are willing to accept voluntary treatment. METHODS: Patients in the Montgomery County, Maryland, public mental health system (N = 119) willing to accept voluntary acute care were randomized to the psychiatric ward of a general hospital or a residential crisis program. Unit costs and service utilization data were used to estimate episode and 6-month treatment costs from the perspective of government payors. Episodic symptom reduction and days residing in the community over the 6 months after the episode were chosen to represent effectiveness. RESULTS: Mean (SD) acute treatment episode costs was $3046 ($2124) in the residential crisis program, 44% lower than the $5549 ($3668) episode cost for the general hospital. Total 6-month treatment costs for patients assigned to the 2 programs were $19,941 ($19,282) and $25,737 ($21,835), respectively. Treatment groups did not differ significantly in symptom improvement or community days achieved. Incremental cost-effectiveness ratios indicate that in most cases, the residential crisis program provides near-equivalent effectiveness for significantly less cost. CONCLUSIONS: Residential crisis programs may be a cost-effective approach to providing acute care to patients who have serious mental illness and who are willing to accept voluntary treatment. Where resources are scarce, access to needed acute care might be extended using a mix of hospital, community-based residential crisis, and community support services.