A unique approach to mental health services in an HMO: indemnity benefit and service program.

Three years' experience with a unique combination of an indemnity benefit plus an in-house service program in a prepaid group practice plan's psychiatric department demonstrates enhanced accessibility and increased utilization among formerly unserved segments of the membership plus the flexibility of freedom of choice in choosing service provider and the ability to tailor treatment to patient needs. Overall costs were similar to those reported for other prepaid plans despite the addition of benefits for long-term therapy outside the plan. Flexible use of inpatient and day hospital services enabled the program to migrate, to a large extent, major increases in hospital charges while providing greater continuity of care. This combination of benefits offers the advantages of both an indemnity benefit (Freedom of choice in treatment) and an in-house service program (greater continuity of care, more flexible use of resources, reduction of reliance on hospital care).