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Assessing cost-effectiveness in mental health : vocational rehabilitation for schizophrenia and related conditions

journal contribution
posted on 01.01.2005, 00:00 authored by M Chalamat, Cathy Mihalopoulos, Rob CarterRob Carter, T Vos
Objective: Existing evidence suggests that vocational rehabilitation services, in particular individual placement and support (IPS), are effective in assisting people with schizophrenia and related conditions gain open employment. Despite this, such services are not available to all unemployed people with schizophrenia who wish to work. Existing evidence suggests that while IPS confers no clinical advantages over routine care, it does improve the proportion of people returning to employment. The objective of the current study is to investigate the net benefit of introducing IPS services into current mental health services in Australia.

: The net benefit of IPS is assessed from a health sector perspective using cost–benefit analysis. A two-stage approach is taken to the assessment of benefit. The first stage involves a quantitative analysis of the net benefit, defined as the benefits of IPS (comprising transfer payments averted, income tax accrued and individual income earned) minus the costs. The second stage involves application of 'second-filter' criteria (including equity, strength of evidence, feasibility and acceptability to stakeholders) to results. The robustness of results is tested using the multivariate probabilistic sensitivity analysis.

Results: The costs of IPS are $A10.3M (95% uncertainty interval $A7.4M–$A13.6M), the benefits are $A4.7M ($A3.1M–$A6.5M), resulting in a negative net benefit of $A5.6M ($A8.4M–$A3.4M).

Conclusions: The current analysis suggests that IPS costs are greater than the monetary benefits. However, the evidence-base of the current analysis is weak. Structural conditions surrounding welfare payments in Australia create disincentives to full-time employment for people with disabilities.



Australian and New Zealand journal of psychiatry






693 - 700


Wiley Interscience


Malden, Mass.







Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

2006 The Authors; Journal compilation and The Royal Australian and New Zealand College of Psychiatrists