Planning Public Expenditures on Mental Health Service Delivery

by Frank A. Sloan


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An economic analysis of mental health services, especially community centers, prepared for New York City policymakers' use. Delivery of mental health services may be improved by refining existing market mechanisms. More effort can be made to improve consumer knowledge by means of publications describing service alternatives, without major use of public funds. Cost-benefit analysis can demonstrate the relative worth of programs, but efficiency analysis based on production-function analysis, even evaluation of output effectiveness, is for the future, because prerequisite data are lacking. A pilot study was conducted at two community mental health centers. It demonstrates that persons with widely different educational backgrounds perform the same function; inputs are highly substitutable; diseconomies of scale exist; reduction in the several sources of inefficient production unrelated to scale would mean operational cost savings; personnel-patient ratios must change markedly to alter direct patient care; and patient contact costs more in some community mental health centers than in private psychiatric practice.

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