The Effects of a Large-Scale Mental Health Reform: Evidence from Brazil
Luiz Felipe Fontes
American Economic Journal: Economic Policy (Forthcoming)
This paper studies the Brazilian Psychiatric Reform, which reorganized
the public mental health care provision by introducing mental health
centers (CAPS) as a community-based substitute for inpatient care.
Our research design exploits the roll-out of CAPS in a difference-indifferences
framework. We show that these centers increased outpatient
mental health care production and reduced psychiatric hospitalizations.
These reductions were more pronounced for long-stay admissions and
among patients with schizophrenia. We find that the savings implied by
fewer admissions do not offset the cost of the policy. Also, the reform did
not reduce mental health mortality and it increased violent crimes.