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ACT Cost Summary

ACT & ISSUES OF COSTS:

  1. As a guiding principal, it is most accurate to think of the implementation of an ACT demonstration program in terms of creating one ACT team to serve one specific group of client/participants. The cost formula would run: $800,000.00 to $1,000,000.00 = 100 clients = 10 - 12 staff for one year.

  2. These costs are offset by the fact that the ACT model replaces several existing, fractured services and programs currently used by the clients. Once the individual is part of an ACT program, the team itself provides the services.  ACT is designed as one-stop shopping for people with the most severe mental illnesses. ACT effectively serves people that most treatment models shy away from: those who have a co-occurring substance abuse disorder, criminal justice involvement, and people who are homeless.

  3. Beyond the one-time start-up expenses (consultation on design, training of team, training of supervisory mental health authority) of $25,000 to $50,000, the program’s ongoing funding mechanisms are the same as those currently being utilized: Medicaid, Medicare, mental health block grant funds, state and county mental health funds, and in some states tobacco settlement funds.

  4. Some of the specific, concrete realized savings from ACT are in the tremendous reduction of time that ACT clients spend in institutional settings (psychiatric hospitals, or psychiatric wards in med/surg hospitals). In higher fidelity (to the model) programs, hospital days are reduced by 23% points over those plans that attempt to do "ACT lite" models or traditional office-based care. (Economic Impacts of Assertive Community Treatment: A Review of the Literature by Eric Latimer, Ph.D. in The Canadian Journal of Psychiatry, Vol. 44, June 1999.)

  5. In detailed studies of high fidelity ACT models vs. Intensive Case Management models of service delivery, the evidence has been that to break even, or experience savings, PACT should be the program of choice for clients who have been high users of hospital services. (Lattimer, June,1999).

  6. In the early 1980s, 70% of each dollar spent on mental health services in the United States was spent in hospitals. At the same time in Dane County, Wisconsin, (birthplace of PACT), only 17% of mental health funding was spent on hospitals. 83% of MH dollars was spent on community-based treatment.(Stein & Diamond, 1985).

  7. Santos et al,(1993 study) concluded that the cost per patient per year for hospital care was $18,800 (plus) the cost of traditional outpatient care. That overall cost in hospital care DECREASED to $11,300 once ACT teams were in place in the community shows a reduction of 40% in dollars spent on hospital care.

  8. In concluding his review of the published studies comparing ACT with other models of service delivery, William Hughes (Health & Social Work, May, 1999) said, "Extensive studies in public and non-profit agencies have shown PACT to be the most cost-effective option for treating populations with serious illnesses and disabilities now being enrolled in Medicaid managed behavioral health plans."

  9. In the published findings on the cost-effectiveness of ACT as compared with standard case management as conducted by Susan Essock, et al (American Journal of Orthopsychiatry, (4/98) there was no difference in cost to the public mental health system, the state or society between ACT and case management. In particular, the evidence showed that ACT teams increased clients days in the community as opposed to days in the hospital and those savings on hospital bed days offset the additional costs associated with ACT.

  10. In 1999, a study of capitated ACT services was published by Daniel Chandler, et al (Psychiatric Rehabilitation Journal, spring 1999,Vol. 22 no. 4). The conclusion was that with a capitated ACT system, the per person gross costs were 25% lower and the net costs were 67% lower than the comparison group receiving traditional services through Alameda County (Calif.). Again, the largest savings came from the reduction in clients recycling through and lengths of stay in hospitals.

The NAMI ACT Technical Assistance Center


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