New Study Finds Assisted Outpatient Treatment Saves Money. Why Aren’t More States Using It?

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It just got a lot harder for opponents of court-ordered outpatient treatment for mental illness to argue that it costs too much to use.

A study of mandatory outpatient treatment costs published today in the American Journal of Psychiatry found that use of assisted outpatient treatment (AOT) can vastly reduce overall costs of mental health services for persons with serious mental illness.

“Common sense has always argued that treating people with severe mental illness is a lot cheaper than arresting, jailing and/or hospitalizing them – not to mention more humane,” said Doris A. Fuller, executive director. “Now Duke University and its research partners have produced the numbers to validate it.”

“The cost of assisted outpatient treatment: Can it save states money?” by Dr. Jeffrey W. Swanson of Duke and six other researchers reports that service costs for 634 frequently hospitalized patients with severe mental illness declined 50% in New York City – from $104,753 to $52,386 – in the first year they received AOT after psychiatric hospitalization and dropped another 13% the second year.

Even larger cost savings were reported in five suburban New York counties also analyzed in the study.

Swanson and fellow researchers analyzed the costs of providing program, selected legal and court services, mental health and other medical treatment, and criminal justice involvement to people who met the strict criteria for New York’s involuntary outpatient treatment program (“Kendra’s Law”). Dramatic  savings were realized even though the cost of providing outpatient services to people under Kendra’s Law AOT orders was higher.

The researchers said that by saving money with greater use of AOT, mental health agencies could actually find themselves with more resources to meet other mental health needs.

“Unfortunately, compassion for those suffering these consequences as a result of untreated symptoms of severe mental illness has not been enough to motivate most communities to put their AOT laws to work,” Fuller said. “We hope the prospect of saving their taxpayers money will.”

Read the Abstract

Abstract identifies one of SARDAA’s conference speakers, Marvin Swartz, MD

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