Ownership and Mental-Health Services

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Abstract
The mental-health system in the United States is undergoing marked "privatization" — a growth in the importance of both private nonprofit and for-profit providers. Analyzing data collected in earlier surveys, we found that the type of ownership was linked to a number of important aspects of institutional performance: (1) private facilities, both for profit and not-for-profit, are more likely to screen out nonpaying patients than are government-owned providers; (2) services provided under public auspices are more expensive than those provided in private institutions; and (3) compared with private nonprofit facilities, for-profit providers devote fewer staff resources to patient care and offer fewer services with community-wide benefits. We conclude that ownership affects the organizational behavior of mental-health facilities. The contemporary shift from public to private provision of mental-health care raises important questions about ensuring adequate access to care, maintaining the supply of needed services, and adapting systems of reimbursement and regulation to the heterogeneous motivations of providers operating under different forms of ownership. (N Engl J Med 1984; 311:959–65.)

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