Economic evaluation of a liaison psychiatry service
Parsonage M and Fossey M Centre for Mental Health, London. 2011

This report provides an independent economic evaluation of the Rapid Assessment Interface and
Discharge (RAID) psychiatric liaison service operating in City Hospital, Birmingham. It is based
mainly on a critical scrutiny and re-analysis of data collected as part of a wider internal review.
We conclude that the service generates significant cost savings and is excellent value for money.
Psychiatric liaison services provide mental health care to people being treated for physical health
conditions in general hospitals. The co-occurrence of mental and physical health problems is very
common among these patients, often leading to poorer health outcomes and increased health
care costs. An effective liaison psychiatry service offers the prospect of saving money as well as
improving health.
RAID is an award-winning service which offers comprehensive mental health support, available
24/7, to all people aged over 16 within the hospital.
The analysis of cost savings in the internal review of RAID focused on the ability of the service to
promote quicker discharge from hospital and fewer re-admissions, resulting in reduced numbers of
in-patient bed-days.
Based on a comparison of lengths of stay and rates of re-admission in similar groups of patients
before and after RAID was introduced in December 2009, in place of a previous, smaller liaison
service, the internal review estimated that cost savings are in the range of £3.4 – £9.5 million a year.
Most of these savings come from reduced bed use among elderly patients.
To allow for uncertainty in these estimates, we undertook a cost-benefit analysis of RAID based
on very conservative assumptions, seeking to address the question of whether the service is
demonstrably good value for money even if its claimed benefits are put at the bottom end of a
plausible range.
This should provide decision makers with a sound starting point for future planning, including the
review of possible options for service re-design.
Our analysis indicates that the incremental cost of RAID (i.e. the additional cost of the service
compared with its predecessor) is around £0.8 million a year. In comparison, we estimate on
conservative assumptions that RAID generates incremental benefits in terms of reduced bed use
valued at £3.55 million a year, implying a benefit:cost ratio of more than 4:1.
The service also offers some potential savings in addition to reductions in bed use, such as fewer
discharges of elderly patients to institutional care rather than their own homes.
We conclude that the RAID service is good value for money, particularly as the benefits included in
the assessment are over and above any improvements in health and quality of life which are the
fundamental justification for health spending. Unlike most health care interventions, RAID actually
saves money as well as improving the health and well-being of its patients.
We identify possible areas for further work at the end of the report.

Investing in Recovery: Making the Business Case for Effective Interventions for People with Schizophrenia and Psychosis
Knapp M, Andrew A, McDaid D, et al Personal Social Services Research Unit and Centre for Mental Health, London. 2014

The health service spent £2.0 billion on services for people with psychosis in
2012/13. Over half (54%) of this total was devoted to inpatient care. This means
that spending is currently skewed towards the more expensive parts of the
system, at £350 average cost per day for inpatient care compared with £13
average cost per day in community settings.

Peer Support in Mental Health Care: Is it Good Value for Money?
Trachtenberg M, Parsonage M, Shepherd G Centre for Mental Health, London. 2013

Peer support workers – people with their own lived experience of mental illness – provide mutually supportive relationships in secondary mental health services. Increasing numbers are being employed, both in this country and elsewhere.

This paper makes a first attempt at assessing whether peer support provides value for money, looking specifically at whether peer support workers can reduce psychiatric inpatient bed use. Because of the very high cost of inpatient care, the savings that result from even small changes in bed use may be sufficient to outweigh the costs of employing peer workers.

The Social and Economic Costs of Mental Health Problems in Scotland
Scottish Association for Mental Health Scottish Association for Mental Health, Glasgow. 2011

In 2006, the Scottish Association for Mental Health published a report, What’s It Worth?, which presented high-level estimates of the social and economic costs of mental health problems in Scotland for the year 2004/05.

What’s it Worth Now? updates the estimates of social and economic costs given in that publication, with a particular focus on the employment-related costs of mental ill health, both in work and out of work. The report also reviews the main policies, interventions and other actions that the available evidence shows to be effective in reducing the scale of these work-related costs.