A comprehensive cost comparison was made of resource utilization by seriously disabled chronic psychiatric patients randomly assigned to inpatient care and to an experimental residential program that provided an intermediate level of 24-hour care. At the end of the two-year study period, no significant changes in patients' clinical condition were observed, but costs for the experimental group averaged about $14,500 less (in 1981 dollars) than for the controls. The cost model included all treatment costs and nontreatment costs such as medical care, community services, case management, law enforcement and fire safety, maintenance outside the mental health system, and collateral costs. The study findings suggest that a program such as this one may be a viable alternative to back-ward long-term care for seriously disabled chronic patients.
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