Cost-Effectiveness of Assertive Community Treatment for Homeless Persons with Severe Mental Illness

BACKGROUND: Homelessness is a major public health problem among persons with severe mental illness (SMI). Cost-effective programmes that address this problem are needed. AIMS: To evaluate the cost-effectiveness of an assertive community treatment (ACT) programme for these persons in Baltimore, Maryland. METHODS: A total of 152 homeless persons with SMI were randomly allocated to either ACT or usual services. Direct treatment costs and effectiveness, represented by days of stable housing, were assessed. RESULTS: Compared with usual care, ACT costs were significantly lower for mental health in-patient days and mental health emergency room care, and significantly higher for mental health out-patient visits and treatment for substance misuse. ACT patients spent 31% more days in stable housing than those receiving usual care. ACT and usual services incurred $242 and $415 respectively in direct treatment costs per day of stable housing, an efficiency ratio of 0.58 in favour of ACT. Patterns of care and costs varied according to race. CONCLUSION: ACT provides a cost-effective approach to reducing homelessness among persons with severe and persistent mental illnesses. (April 1999)