Inpatient utilization before and after implementation of psychosocial rehabilitation programs: Analysis of cost reductions

Research on psychosocial rehabilitation (PSR) interventions generally indicates that these approaches are effective in facilitating improved functioning for persons with serious mental illness (SMI; schizophrenia,schizoaffective disorder, bipolar disorder, and other psychotic disorders). In this quasi-experimental study, we assessed the effectiveness of PSR interventions through a records review of 311 veterans who received outpatient services for SMI. From 2002 to 2008, a midwestern VA Medical Center implemented a number of PSR interventions. By 2008, veterans who used PSR interventions demonstrated reductions in their use of inpatient psychiatric care, whereas veterans who did not access PSR interventions showed no change in inpatient psychiatric care use. Analyses revealed that the provision of PSR services to veterans with SMI who had been hospitalized was associated with decreased duration of hospitalizations and costs savings of $17,739 per veteran per year in total mental health care. Findings are consistent with implementation of PSR programs within VA Medical Centers yielding the greatest cost savings through creation of effective outpatient services that reduce inpatient service needs for veterans with SMI.