A capitated model for a cross-section of severely mentally ill clients: hospitalization.

Hospitalization outcomes are examined in a three year random assignment controlled study of two capitated Integrated Service Agencies (ISAs) in California. Study participants were a cross-section of severely mentally ill clients. Using the flexibility of capitated funding, the urban ISA reduced inpatient length of stay and days, but not admissions. Elements of the capitated ISA model worked together to produce clinically appropriate and less costly use of inpatient services. At the rural ISA, admissions were reduced substantially during the first two years of the demonstration but not costs.