The failure of the diversion process: the impact of transferring of patients to state hospitals.

The diversion of people with severe mental illness into the private sector is examined. The purpose of the diversion system is to reduce the number of admissions to the state hospitals by diverting patients into the private hospitals, which may offer more diverse treatment to these patients. Insurance is highlighted as an important factor in diverting patients from state hospitals. When the diversion system fails and the patient is transferred from the private sector to the state hospitals, continuity of care is disrupted. The failure of the diversion is more costly not only to the patient but to the federal and state governments as well. Policy issues such as cost to the mental health system and continuity of care are discussed.