Technical and allocative efficiency in production of outpatient mental health clinic services

This paper presents an analysis of production of ambulatory mental health services in free standing outpatient clinics. The study empirically addresses several issues including: the nature of returns to scale, the impact of differing organizational forms on the volume of service produced and the efficiency of staffing patterns used by psychiatric clinics. An appraisal of two popular production functions is offered based on predictive performance. The results suggest the existence of decreasing retirns to scale; input hiring decisions that depart from cost minimization; and the potential important of a decentralized clinic organization for expansion of access to mental health services.