Research on psychiatric hospital admissions shows that a small group of patients use a disproportionate amount of inpatient services. In the late 1980s Washington State developed initiatives to target outpatient community mental health services to mentally ill persons with high rates of inpatient psychiatric service use. Services to the targeted group are provided by regional support networks under contract with the state. Diverse funding sources were consolidated to give the regional authorities flexibility to tailor funding to local needs, and new appropriations were tied to the region's commitment to increase capacity for community mental health services. To support those initiatives, the state developed a specialized client-focused database to identify individuals with high rates of hospital utilization, provide information to regional authorities about use of hospital services by those individuals, and assess whether they were receiving outpatient services. Analyses of statewide data showed wide variation among regions in hospital use and delivery of community services.