OBJECTIVE: This study examines the outcomes of a statewide implementation of Intensive Psychiatric Rehabilitation (IPR) for improving residential and employment status and earnings among individuals with severe mental illnesses and also examines its implementation with respect to mental health service utilization and costs.

METHODS: This study employs a pre-post design with participants acting as their own controls for rehabilitation outcomes (residential status, vocational outcomes and earnings) comparing those who "completed" or had a sufficiently intense dose of IPR (one year) to those who dropped out early (before six months of service) and those who dropped out later in service (6-12 months). A separate analysis was conducted examining the relationship of IPR to other mental service use and costs using a quasi-experimental design that contrasted IPR completers with a control group matched via propensity scores.

RESULTS: The results suggested significant improvement in residential status, employment status and gross monthly earnings for IPR completers relative to other groups. IPR completers also tended to use more mental health services or have more shallow decreases in use and cost of services relative to matched controls.

CONCLUSIONS AND IMPLICATIONS FOR PRACTICE: Gains in rehabilitation outcomes can be expected for those who engage in and complete IPR services, but IPR cannot be expected to result in reduced overall mental health service use and costs. Rather, IPR may improve service access or perhaps ameliorate any containment effect of managed care on service use.