An analysis of the costs and benefits of two strategies to decrease length of stay in children's psychiatric hospitals.

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OBJECTIVE. We analyze the costs and benefits of two strategies-intensive home-based services and increased remuneration for providers of community-based placements--to decrease excessive length of stay in a children's psychiatric hospital. DATA SOURCES AND STUDY SETTING. Clinical, demographic, and financial data were collected retrospectively on all children discharged during 1987 through 1989 from the state children's psychiatric hospital that serves Wayne County, Michigan. Characteristics of the discharged children were similar to those reported in other studies of intensive home-based services. STUDY DESIGN. A sample of 22 children was used for a simulation analysis. Excessive length of stay was defined as the duration of hospitalization after readiness for discharge and associated planning were indicated in the record. For the simulated analysis of the intensive home-based program, costs included estimated charges for the program and charges for the children hospitalized due to failure of the intervention. For analysis of the increased remuneration strategy, costs included charges for the out-of-home placement and charges for hospitalization. For both strategies benefits were defined as averted hospitalization charges. DATA COLLECTION/EXTRACTION METHODS. Charts of the discharged children were reviewed and 21 clinical, demographic, and financial variables were extracted. PRINCIPAL FINDINGS. Analysis of costs and benefits of intensive home-based services produced a favorable cost-benefit ratio of .47. Analysis of the strategy to increase remuneration for providers of community-based placements resulted in a cost-benefit ratio of 1, indicating no financial savings. CONCLUSIONS. Intensive home-based services represent an efficient strategy to decrease excessive length of stay for children in psychiatric hospitals by averting hospitalization altogether. Although increased remuneration to providers of community-based placements in order to increase the supply of placements as a means to hasten discharge from the hospital has a neutral cost-benefit ratio, the opportunity to provide care in the "least restrictive" environment argues in its favor as well.

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