THE MENTAL-HEALTH HMO - CAPITATION FUNDING FOR THE CHRONICALLY MENTALLY-ILL - WHY AN HMO

Excesses associated with deinstitutionalization during the 1970s provided a legacy of homelessness, revolving door rehospitalization, and gridlock in metropolitan hospital emergency rooms. To allow for the seriously and persistently mentally ill to move planfully into community life, caregivers must utilize new and improved care models. One option is the HMO capitation model being tested in the Monroe/Livingston County Mental Health Demonstration in New York State. Experience indicates positive results for patients and lower than anticipated costs. Integrated Mental Health (IMH) is the local authority for this locally designed demonstration in New York State. Community Mental Health Centers (CMHCs) act as "Lead Agencies" to manage care and rehabilitation for seriously mentally ill patients previously dependent totally on the State hospitals' services. Both improvements in patient functioning and in reduced cost of appropriate community care are being documented by this demonstration project.