American Economic Journal: Economic Policy · 2021 · Mateus Dias、Luiz Felipe Fontes
Abstract
This paper studies the 2002 Brazilian Psychiatric Reform, which reorganized the public mental healthcare provision by introducing Psychosocial Care Centers (CAPS) as a community-based substitute for inpatient care. Our research design exploits the roll-out of CAPS in a difference-in-differences framework. We show that these centers increased the outpatient mental healthcare production and were effective in reducing hospitalizations due to mental and behavioral disorders. These reductions were more pronounced for long-stay admissions and among patients with schizophrenia. We find that the implied savings from less admissions does not totally offset the cost of the policy. Also, the reform had no effects on mental health mortality, but increased violent crime.