Mental Health Cost Models: Refinements and Applications

This paper describes a 2-year study whose goal was to refine Burton Weisbrod's cost model for public programs for the chronically mentally ill. The authors made comprehensive cost assessments of all the resources, including treatment programs, used by a small sample of severely disturbed chronically ill patients. Refinement of the model included a method to assess capital costs of public facilities. The use of disaggregated patient information permitted analysis of cost differences between patients when adjusted for case mix. Patient costs over the study period ranged from $24,000 to $99,000. Patient characteristics and change in clinical status account for 30% of the variance.