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The Relationship Between the Fiscal Structure of Mental Health Care Systems and Cost

Augusta Mental Health Institute, P.0.Box 724, Augusta, Maine, 04332, george.davisistate.me.us

Walter E. Lowell, EdD

State of Maine, Department of Mental Health, Mental Retardation, and Substance Abuse Services, Augusta, ME, 04332, walter.lowellistate.me.us

The authors, using State Mental Health Agency (SMHA) data from the National Association of State Mental Health Program Directors' Research Institute, show that the amount of state hospital (SH) expenditures is related to suicide rate (SR) as well as to cost per capita for mental health care. The relationship is much stronger for cost per capita especially when the range of SH expenditures is 31-55%, or 43 ± 12%, of total expenditures. This article hypothesizes that maximum system efficiency occurs when the funding structure of the delivery system reflects a 57%:43% (community [C]/SH) ratio. This ratio was the mean for the 50 states of the United States in 1997, when the national mean SR was 13 per 100,000 of general population. This ratio is identical to the C-to-SH inpatient bed ratio derived theoretically in a previously reported study focusing on fractal (self-similar on all scales) demand for mental health services. The potential for national saving with the redistribution of funding may be as high as $4.5 billion per year, or 23% of SMHA expenditures.

Key Words: Behavioral health • community • expenditures • fractal • funding • mental health • partition • state hospital • structure • suicide rate

American Journal of Medical Quality, Vol. 17, No. 5, 200-205 (2002)
DOI: 10.1177/106286060201700508


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