ESTIMATING THE CAPITAL COMPONENT OF MENTAL-HEALTH-CARE COSTS IN THE PUBLIC-SECTOR

This study describes methods for determining the cost of buildings and grounds in public sector facilities. Two methods for estimating the cost of capital (one using local office rents; the other based on estimates of the replacement cost of hospital buildings) are applied to six types of health care service at nine VA medical centers. Results indicate that capital costs for psychiatric inpatient care were about one-third those for surgical services and one-half those for medical services. Overall, capital costs add 6% to average inpatient costs and 4% to outpatient costs.