All over the world large sums of both public and private money are expended on the operation of psychiatric health care services. In most of the European countries mental health care expenditures, as well as the total health care budget, increased quite rapidly during the 80s. But in the 90s the economic recession has forced to cut down costs which has meant a decrease in mental health resources and, evidently, an increase of the unmet need for these services in the population.

The problem is that the development of mental health services has been, for the most part, merely accidental and random, usually not clearly planned and based neither on real knowledge of the population needs nor on setting priorities when all needs can not be satisfied. During the period of increasing resources there was no real need for priority setting; somewhat exaggerating one can say that every emerging demand for services could be met by allocating new resources. During the recession, on the other hand, the cutting of costs have been the main goal, leading again to an unplanned development: the cuts of resources have been rather forced and panicky, not based on consideration of true population needs or the consequences of the development.

It is well known that the prevalence of mental illness is not uniformly distributed. This has practical consequences for the planning, financing and evaluation of public mental health services. Areas likely to have greater morbidity are likely to require more resources. The question is by how much? This essay describes a method devised in the context of the English health service to provide practical help to mental health planners faced with this type of question.

Severe and long term mental disorders, like schizophrenia, show in general a wide range of psychiatric signs and symptoms, psychological and physiological impairments and social disablement (Shepherd, 1994; Wing, 1982) reflecting a variety of mental health needs. Many studies provide only a cross-sectional view of the clinical and social problems of the patient population, for example at intake or admission to a mental hospital. Longitudinal studies following patients after discharge for some period of months or years show in general the expected improvement of functioning (e.g. Nienhuis et al., 1994), but as far as only chronic patients are concerned such a positive change is much less noted. The concept of chronicity of mental disorders would presume that after some time needs are fairly predictable and stable and do not change much over time. Our investigation on the long-term course of schizophrenia (Wiersma et al., 1996; 1997) enables us to study over a period of two years, from 15 to 17 years since first onset of psychosis, the stability or variability of needs in schizophrenic disorder. We are not aware of empirical studies on changes in needs among patients with long-term disorders.

“The debate is over” claimed a heading in a newspaper on the 1991 Amsterdam WHO conference ‘Changing mental health care in the cities of Europe’: “After half a century of debate of the issue of deinstitutionalisation the question is not any more if we should close the large mental hospitals, but what follows the closure and how to develop adequate community mental health care which replaces the functions of the mental hospital” (Gersons & Burns, 1992).

These ‘functions’ have actually secured the long-lasting success of the mental hospital which has been in the past and, to a certain extent, still is in a number of countries, the cornerstone of psychiatric care. It incorporates all the functions of a psychiatric system in a single, usually isolated facility, including crisis intervention, evaluation, treatment, aftercare, long-term custodial care, rehabilitation, etc. In order to phase down the mental hospital these functions have to be supplemented by newly established, discrete services disseminated in the community. The process is clearly a complex one, since it implies a transition from a system of care provided only in mental hospitals under medical direction, to one that is comprehensive in scope, community-orientated, and staffed by multidisciplinary teams.

In theory, the utilization of health resources would vary with need. In an ideal world, health care providers would configure their resources and target their treatment programmes according to validated predictors of need. Such models would be based upon socio-demographic variables in the population known to correlate closely with psychiatric morbidity, which had been derived from large data sets having wide applicability and generalizability. They would include technology allowing locality adjustments for small areas with high densities of homelessness, residential accommodation for the severely ill, or areas with problems of substance abuse. Our ideal model would be continually monitored against reliable data derived from real time service use, fed back to providers and ‘fine tuned’ to reflect secular trends in socio-demographic risk factors and changing patterns of need.

The concept of need and the development of methods for measuring population needs represent, in a way, a new paradigm in evaluative research and planning of mental health services.

As with all new paradigms, this one has arisen as a way of overcoming a conceptual crisis: the crisis that has resulted from the application of the curative and medical model to the organisation and evaluation of mental health care, and from the traditional way of planning mental health services according to factors more centred on services and staff problems than on the actual problems of the populations.

As is the case with all new paradigms, the concept of needs also represents a radical change at the epistemological level. In fact, this concept integrates a new perspective on: 1. The nature and range of the problems experienced by the mentally ill (seen not only in terms of symptoms and behavioural problems but also in terms of social disability problems); 2. The interventions required to reduce or contain those problems(integrating the dimension of treatment in a more comprehensive dimension of care); 3. The principles of mental health services organisation (seen from a more community-centred perspective).

In the United Kingdom, national policy and local service provision both direct provision towards people with a severe mental illness (NHS and Community Care Act, 1990; Department of Health, 1993, 1994). An independent report by the Mental Health Foundation (1994), a leading mental health charity, recommended that the Department of Health “promulgates a practical definition of severe mental illness (SMI) in order to concentrate attention and services on those in greatest need”.

In order to assess the extent to which a provider or a purchaser has focused attention upon the SMI, definitions are being developed in most services in the UK; this will facilitate the quantification of the number and proportion of SMI in contact with services. The definitional approach uses a (variable) number of criteria to determine status as a severely mentally ill person. It is essentially categorical because the individual is placed in one of two categories, SMI or not-SMI.

The focus of mental health care has seen a significant shift from institutional care to community based care and has been well described (Thornicroft & Bebbington, 1989). This shift has necessitated the development of new and flexible models for ensuring that patients' needs are met. Mental health professionals have to operate across a wide range of community contexts dealing with a complex range of needs. Intensive Case Management (ICM) also known as Assertive Community Treatment is a model of service provision to the long term mentally ill in the community. The Programme of Assertive Community Treatment (ACT) developed by Stein & Test (1980) in the United States has a number of Key elements (figure 1).

ACT-based ICM is unusual in that it has been extensively researched (principally in the United States of America), and programmes are relatively well described. Such descriptions, especially of programmes outside America, often focus on underlying principals and philosophies and do little to measure practice. Teague et al. (1995), however, devised clear criteria for measuring practice components and McGrew et al. (1994) asked ACT “experts” to rate the “key” elements of PACT and related a number of these to levels of hospital use. In the United Kingdom, Thornicroft (1991) listed twelve axes for describing the central practice characteristics of case management (a broad concept including ICM). These UK ‘practice characteristics’ also focus more on macro-level programme description rather than on the practices of programme staff. There is a pressing need for research into exactly what teams do.

An abundant literature has been published about mental services evaluation and was used for purpose of comparisons between services.

Comparisons have mainly concerned care in the traditional psychiatric hospital based mode versus community mental health (Tansella et al., 1982; Kraudy et al., 1987; Kovess et al., 1995) or care in different areas or countries (Sytema et al., 1989).

Those comparisons have to rely on crude description of services (Tansella et al., 1986) like psychiatric hospitalisation, day hospitalisation or out patient intervention. Intensive international collaboration underpinned the importance of a more precise description about services which could have extremely different components under the same label.

In fact services in mental health are complex to describe to allow meaningful comparisons because they cover many different actions given by a variety of providers and grouped into various structures as:

• • hospitals: specialised or general, large or small;

• • day hospitals and centre;

• • out patients clinics, crisis centres.

Care could also be provided by independent workers from the diverse medical and non medical professions involved in the mental health fields in private practice settings.

In past years the study of service utilization has given a great contribution to the evaluation of mental health services. Nowadays, the challenge that must be faced is to obtain from service utilization research useful knowledge for clinical practice and service planning.

Psychiatric care organization should be based on coherent and comprehensive assessments of the population's morbidity and needs for care, and take into account costs and benefits of different forms of treatments in relieving mental disorders and meeting mental health needs. While the former issue has been widely studied, the last two are mostly unexplored. Specifically, there is limited amount of information available on the significance that certain patterns of service utilization, or changes in service utilization, may have for the patient, his/her relatives and the community, and on the correlation between certain characteristics of service utilization and the overall quality of care.

In this perspective, service utilization must not be considered an isolated step in the patient's career; the causal link between needs, use, and outcome of services should be identified. A full understanding of the role of service utilization in psychiatry thus necessitates taking into consideration events occurring at various steps of a person's history:

step 1: a person develops a mental disorder;

step 2: in certain cases this will determine a mental health service need;

step 3: in certain cases the service need will determine mental health service utilization;

step 4: use of mental health services will have a certain outcome.

In a seminal study, Elizabeth Bott (1957) investigated relationships between family roles and social networks in a small group of families in London. The author was an anthropologist, and the field of social network research, in psychiatry, has received major input from methods of social anthropology. Tolsdorf (1976) investigated social networks of patients with schizophrenia. Since then, many studies have focused different aspects of social networks and social support in patients with psychotic disorders.

Service utilization research is not a homogenous field of research. One might distinguish between the evaluation of treatments and the evaluation of mental health systems. I will restrict myself to the mental health system approach. The first statement that has to be made is that the study of service utilization is not an aim in itself. The ultimate goal is to learn how systems of mental health care function or dysfunction. This knowledge should be helpful for planners to plan services at a more scientific basis.

Another introductory statement is that the objective of system service utilization research is the study of the relationships of a described population with the mental health system available for this population. Otherwise stated, this is an epidemiological approach of service utilization research. In this we will further distinguish between the pathway to care and the pathway through care or patterns of care. The basic questions in the pathway to care are related to the proportion of the population using mental health services; the treated prevalence and incidence. A topic is for example the inequality in service use in different social-economic-status or socio-demographic subgroups. The basic questions in the pathway through care are related to the way in which patients use the mental health system in terms of duration, intensity, setting and relapse for example. In the present paper we will focus on the latter topic mainly.

Most of the studies that are frequently cited as examples of effective comprehensive community care, (i.e. they reduce the demand for hospital beds without any loss in treatment efficacy (Stein & Test, 1980; Hoult & Reynolds, 1984; Muijen et al., 1992) were carried out before the introduction of the Care Programme Approach (CPA) in 1991 (Department of Health, 1990) which at present only applies to England. As the CPA derives from these earlier studies the discrepancies between hospital and community based aftercare might be expected to become less, as now all services in England are expected to include a significant community element. However, there can still be important differences between those services focusing on community care as the main priority and those in which the hospital system is paramount.

The psychiatric services in the area covered by North West London Mental Health Trust (NWL Trust) represented a natural test of these two approaches as they had parallel hospital and community based teams covering the same catchment areas respectively, North Paddington, in Westminster and Brent, in outer London.

At this point it is useful to provide more detailed description of the two geographical areas at the time of the study and the community and hospital based teams that were involved.

Partial hospitalization (PH) fulfills four different functions in the mental health care system. First it can be a continuation of full-time hospitalization (FH). Secondly it functions as a rehabilitation oriented day care facility for the chronically ill. Thirdly it can be an extension of an outpatient treatment for patients without any indication for FH. And lastly it can be an alternative to (sub)acute FH (Schene & Gersons, 1986). Of course a particular PH service can fulfill different functions at the same time. However, based on data from a nationwide survey in The Netherlands we found clear differences between PH services that were specialized in one of the four functions mentioned (Schene et al., 1988).

PH might be regarded as a real and useful alternative to FH, provided it adheres to the original inpatient treatment objectives and their related functions, without any loss of quality. It should accommodate the same, or at least a comparable, patient population. Only under those conditions can PH really replace FH.

It is no longer a pleasant surprise (to most health economists) or an unwelcome shock (to most non-economists) to find costs on the core conference agenda of a mental health conference. In the Amsterdam ENMESH conference in 1994, economics appeared as a late but welcome addition to the programme, effectively on the margins but - and this was unusual at the time - it had formal representation. In Verona in 1996, as at a growing number of conferences (and in more books and academic journals), economics has moved rather closer to the mainstream. In this paper I offer a short historical account of this ‘mainstreaming’ and tease out its implications for mental health care evaluation.

In many European countries today there are rapidly growing demands for cost information, cost-effectiveness evaluation, and analyses of systems and the incentives within them. It is useful to distinguish between underlying needs for a costs perspective linked to scarcity of resources (latent demands) and expressed wants for actual cost or cost-effectiveness evaluations or insights (manifest demands) (Knapp, 1997). The latent demands stem from scarcity, in turn linked to a variety of factors.

This study was primarily designed as a cost effectiveness analysis, comparing the costs and outcomes of day hospital and in-patient care for acute psychiatric illness. There are a growing number of this type of study in mental health (Knapp et al., 1994; McCrone et al., 1994; Wiersma et al., 1995; Merson et al., 1996). The costing methodology used in such studies is becoming more consistent, but economic evaluation in mental health care is still developing and there remain several unanswered questions which will be considered in this paper. The wide variation in the costs of care of people with mental health problems is a critical factor in these studies (Gray et al., 1996).

The cost effectiveness study is based on a previous randomised controlled trial conducted at Manchester Royal Infirmary which showed the feasibility and effectiveness of day patient treatment for acutely ill patients (Creed et al., 1990). In the current study 187 patients were randomly allocated, 94 to day hospital care and 93 to in-patient care. The method and results of the main cost effectiveness analysis are described in detail elsewhere (Creed et al., 1996a). This paper concentrates on reviewing the methods used to collect cost data, and further analysis of the data exploring variations in costs.

Psychiatric case registers are systematic health information systems of a geographically delimited area that record the contacts with designated medical and social services of patients or clients from the area. The information is stored in a linked and cumulative file so that the care of any individual or group can be followed over time, no matter how complex the pattern of service attendance (Wing, 1989). They represent the evolution of older systems for recording data of clinical relevance, such as disease registers to which hospitals and physicians used to report all cases of a certain diagnosis and hospital-based registers, which in general are based on aggregate data concerning patients who received care by a particular hospital or clinic (Häfner & an der Heiden, 1986).

Bennett & Trute (1983) pointed out that the term “information” has substantially wider connotations than the term “data”. In order to become “information”, data have to be placed within a framework and interpreted. This is true for all medical information systems, including those that collect limited data set, such as those about births, deaths, admissions to hospital, etc. (Wing, 1986).

A WHO Working Group held in Mannheim provided an agreed definition of a Psychiatric Case Register (PCR) which resulted in the following: “a Psychiatric Case Register is a patient-centered longitudinal record of contacts with a defined set of psychiatric services, originating from a defined population” (WHO, 1983).