Center for Health Policy and Research (CHPR) Publications


Cost-effectiveness of two vocational rehabilitation programs for persons with severe mental illness

UMMS Affiliation

Department of Family Medicine and Community Health; Center for Health Policy and Research; Clinical and Population Health Research

Publication Date


Document Type



Cost-Benefit Analysis; Employment, Supported; Humans; Mental Disorders; Rehabilitation, Vocational; Treatment Outcome


Health Services Administration | Health Services Research | Public Health


OBJECTIVE: This study sought to determine differences in the cost-effectiveness of two vocational programs: individual placement and support (IPS), in which employment specialists within a mental health center help patients obtain competitive jobs and provide them with ongoing support, and enhanced vocational rehabilitation (EVR), in which stepwise services that involve prevocational experiences are delivered by rehabilitation agencies.

METHODS: A total of 150 unemployed inner-city patients with severe mental disorders who expressed an interest in competitive employment were randomly assigned to IPS or EVR programs and were followed for 18 months. Wages from all forms of employment and the number of weeks and hours of competitive employment were tracked monthly. Estimates were made of direct mental health costs and vocational costs. Incremental cost-effectiveness ratios (ICERs) were calculated for competitive employment outcomes and total wages.

RESULTS: No statistically significant differences were found in the overall costs of IPS and EVR. Participation in the IPS program was associated with significantly more hours and weeks of competitive employment. However, the average combined earnings-earnings from competitive and noncompetitive employment-were virtually the same both programs. The ICER estimates indicated that participants in the IPS program worked in competitive employment settings for an additional week over the 18-month period at a cost of $283 ($13 an hour).

CONCLUSIONS: The analyses suggest that IPS participants engaged in competitive employment at a higher cost. When combined earnings were used as the outcome, data from the statistical analyses were insufficient to enable any firm conclusions to be drawn. The findings illustrate the importance of choice of outcomes in evaluations of employment programs.


Psychiatr Serv. 2002 Sep;53(9):1118-24.

Journal/Book/Conference Title

Psychiatric services (Washington, D.C.)

Related Resources

Link to Article in PubMed