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.