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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.

Employment outcomes are examined in a three year controlled study of two Integrated Service Agencies (ISAs) for a cross-section of severely mentally ill clients. At each site significantly more ISA members than comparison clients obtained some paid employment. At the urban site the difference was dramatic: 73 vs 15 percent worked during the study period, and 29 percent of the ISA clients worked competitively. The significant but still limited ISA results argue for increased employment opportunities for all seriously mentally ill clients.

This article explores the cost implications of the capitated integrated service agency (ISA) model for persons with severe and persistent mental illness. Two demonstration sites in California were chosen for a randomized comparison between an ISA model and usual care under the existing county service system. Each ISA demonstration program assumed fiscal and service responsibility for approximately 100 clients. Cost information was collected during a 3-year study period. The capitated ISAs reduced the previously skewed distribution of resources to clients and reduced family economic burden (in one site). However, they did not reduce law enforcement, health, and other nontreatment public costs. Although capitated funding enabled programmatic effectiveness and the shifting of services toward rehabilitation, it did not itself ensure such results.

Objective: In a three-year controlled study, two California integrated service agency demonstration programs that combined structural and program reforms were tested to see if they produced improved outcomes for a cross-section of clients with severe and persistent mental illness., Methods: Clients at an urban site and a rural site were randomly assigned to an integrated service agency program or to a comparison group who received the usual services. Data on client outcomes, were drawn from databases and client and family interviews., Results: Compared with the comparison groups, clients served by the integrated service agencies had less hospital care, greater workforce participation, fewer group and institutional housing arrangements, less use of conservatorship, greater social support, more leisure activity, less family burden, and greater client and family satisfaction. Clients in the urban demonstration program, but not those in the rural program, did better than the comparison group on measures of financial stability, personal well-being, and friendship. At the urban site, 72.6 percent of clients participated in the work force during the three-year study period, compared with 14.6 percent of the clients in the comparison group. No differences were found at either site in rates of arrest and conviction and in self-reported ratings of self-esteem, symptoms, medication compliance, homelessness, and criminal victimization. The capitated costs for demonstration clients were much higher than the costs for services used by comparison clients., Conclusions: Three-year outcomes for a cross-section of clients with severe mental illness in the integrated service agencies were broadly favorable, but costs of services for those clients were high relative to costs for clients receiving the current standard of care.

Objective: Client outcomes for the first year of a three-year study were measured in two integrated service agencies (ISAs) for severely mentally ill persons to test the effectiveness of a model combining financing reform (consolidated funding and capitation) with an assertive continuous treatment team approach., Methods: Clients referred to pilot ISAs at an urban and a rural site in California were randomly assigned to the ISA programs or to comparison groups receiving usual services. Objective data from clients' records as well as subjective information from interviews were compared., Results: At both sites, demonstration clients' participation in the work force was significantly higher than that of the comparison groups. At the urban ISA, clients' participation in the work force rose from a baseline rate of 11 percent to 36 percent. Both ISAs decreased use of hospital care, particularly the rural ISA, which reduced admissions from a baseline rate of 40 percent to 21 percent in the study year. Both ISAs retained clients in treatment with significantly more success than did comparison programs, and urban ISA clients reported participating in more leisure and social activities than did clients in the comparison group. No differences were found at either site in rates of long-term hospitalization, arrest, or conviction or in measures of self-esteem, symptomatology, substance use, homelessness, or quality of life., Conclusions: After 12 months of a 36-month program, demonstration clients spent less time in hospitals, were more likely to have worked for pay, and were more likely to have remained in treatment.