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July 1971

Financing Mental Health CareAn Appraisal of Various Models

Author Affiliations

Santa Clara, Calif
From the Department of Psychiatry, Kaiser Foundation Hospital-Permanente Medical Group, Santa Clara, Calif.

Arch Gen Psychiatry. 1971;25(1):49-55. doi:10.1001/archpsyc.1971.01750130051005

The financing of psychiatric care is an important variable in determining the type of treatment, the duration of hospitalization, and the length of outpatient psychotherapy. Despite many clinical innovations, new legislation, and increased federal funding in the last decade, there are only scant research data on new methods of financing mental health care. Current economic models include (1) fee for service, (2) commercial and governmental insurance plans, (3) prepayment plans, and (4) public subsidy. The advantages and disadvantages of each economic model are analyzed. I conclude that there is a close relationship between economic models and the types of delivery of mental health services and that there is an urgent need for systematic studies of cost, utilization, and clinical effectiveness within the framework of each economic system.