Techniques of economic analysis in psychiatric practice.

Since there is a limit to the amount of money that society can and will spend on health care, economic analysis is becoming increasingly important. This article attempts to review the use that has been made of economic analysis in psychiatric practice. It has been shown that treatment costs are a small part of the total cost of mental ill health, although 'expensive treatments' may reduce the cost of illness to society. In the USA the treatment of schizophrenia has been studied from the economic viewpoint. The economics of the alternatives of hospital and community care have been investigated. Cost-benefit analysis has been modified for application to the monitoring and assessment of psychiatric treatment. Economic analysis can and should be used, in conjunction with clinical analysis, to determine policies for better mental health care.