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Aust N Z J Psychiatry. 2005 Aug;39(8):693-700.

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

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Program Evaluation Unit, School of Population Health, University of Melbourne, Parkville, Victoria 3010, Australia.



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.


The costs of IPS are 10.3M Australian dollars (95% uncertainty interval 7.4M-13.6M Australian dollars), the benefits are 4.7M (3.1M-6.5M Australian dollars), resulting in a negative net benefit of 5.6M Australian dollars (8.4M-3.4M Australian dollars).


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.

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