MANAGING COMPETITION IN PUBLIC AND PRIVATE MENTAL-HEALTH AGENCIES - IMPLICATIONS FOR SERVICES AND POLICY

The merits of public versus private health care agencies have been vigorously debated, particularly as states increasingly contract with community mental health agencies to serve people who need care. Management practices and performance in 452 public and private community mental health agencies in 49 states were examined to ascertain the impact of ownership on an agency's response to competitive pressures. Significant differences emerged in the use of management practices by public and private agencies to maximize efficiency and revenue, but not in measures of public orientation, such as provision of subsidized care. Competition from private practitioners increased the use of some management practices in both public and private agencies, bur instituting management practices to increase efficiency and revenue did not affect the degree of public service. Ownership alone seems to predict management process better than it does public service orientation.