As California faces another year of fiscal difficulties, the Governor's budget has signaled AB 34 as one of three community mental health programs for praise in its ability to achieve significant cost savings. The statement in the Governor's budget reflects the success of the program in keeping consumers off the streets and out of hospitals, jails and prisons. The $55 million budget allocated for AB 34 has been offset by an estimated cost avoidance of $24.7 million from reduced psychiatric inpatient and incarceration days.

Here are several key highlights in the 2003 Legislative Report released by the Department of Mental Health:

• A 56% reduction in the number of days hospitalized

• A 72% reduction in the number of days incarcerated

• A 67% reduction in the number of days spent homeless

• A 65% increase in the number of days employed full-time, and

• A 53% increase in the number of days employed part-time

The reduction in hospital, jail and prison days is extremely significant from the perspective of cost savings to the system. Depending on your estimate for the cost of a hospital day and the cost of a prison day, it suggests that the AB 34 programs are saving millions of dollars through our ability to reduce hospitalizations and incarcerations. And although there are no direct cost savings by reducing homelessness, the literature suggests that there are millions of dollars of indirect costs that we are reducing through our ability to get and keep people off the streets. Finally, increases in employment translate to less reliance of welfare and disability payments and an increase in tax revenues. As the Legislative Report will detail, there are significant cost offsets and savings that result from the investment in this program.

To view the entire Legislative Report, click here to the California Department of Mental Health web site. You will need the Adobe Acrobat reader to view the report.