The economic consequences of deinstitutionalisation of mental health services: lessons from a systematic review of European experience

Many European mental health systems are undergoing change as community-centred care replaces large-scale institutions. We review empirical evidence from three countries (UK, Germany, Italy) that have made good progress with this rebalancing of care. We focus particularly on the economic consequences of deinstitutionalisation. A systematic literature review was conducted using a broad search strategy in accordance with established guidelines. We searched the International Bibliography of the Social Sciences, Health Management Information Consortium, British Nursing Index and PUBMED/Medline to 2008. The on-line search was supplemented by advice and assistance from contacts with government departments, European Commission, professional networks and known local experts. Community-based models of care are not inherently more costly than institutions, once account is taken of individuals’ needs and the quality of care. New community-based care arrangements could be more expensive than long-stay hospital care but may still be seen as more cost-effective because, when properly set up and managed, they deliver better outcomes. Understanding the economic consequences of deinstitutionalisation is fundamental to success. Local stakeholders and budget controllers need to be aware of the underlying policy and operational plan. Joint planning and commissioning or devolving certain powers and responsibilities to care managers may aid development of effective and cost-effective care. People’s needs, preferences and circumstances vary, and so their service requirements and support costs also vary, opening up the possibility for purposive targeting of services on needs to improve the ability of a care system to improve well-being from constrained resources. As the institutional/community balance shifts, strategic planning should also ensure that the new care arrangements address the specific contexts of different patient groups. Decision-makers have to plan a dynamic community-based system to match the needs of people moving from institutions, and must take the long view.