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The Evolving Private Psychiatric Inpatient Market

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Abstract

The private psychiatric hospital market has exhibited great volatility over time. From 1976 to 1992, the number of hospitals more than doubled, while in the decade following, the number of facilities dropped by half. Recently, however, the industry has begun to grow again. The evolution of this market reflects the response of a private industry with access to capital markets to changes in both the supply of substitutes and the demand for services. Most recently, the limited supply of facilities and expanded demand for psychiatric services have spurred renewed growth. The two leading firms today, Universal Health Services, Inc., which rode the market crest and downturn since the 1980s, and Psychiatric Solutions, Inc., a newer entrant, have employed different strategies to take advantage of these opportunities. The rapid responsiveness of the private psychiatric hospital market, as exemplified by these two firms, presents significant potential for shaping future mental health policy.

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Authors and Affiliations

  1. Department of Health Policy and Management, Mailman School of Public Health, Columbia University, 600 West 168th Street, 6th Floor, New York, NY, 10027, USA

    Sherry A. Glied PhD

  2. 110 Sullivan Street, Apt. 1D, New York, NY, 10012, USA

    Erica C. Hutchins MPH, MBA

  3. Department of Health Care Policy, Harvard Medical School, 180 Longwood Avenue, Boston, MA, 02115, USA

    Richard G. Frank PhD

Authors
  1. Erica C. Hutchins MPH, MBA
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  2. Richard G. Frank PhD
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  3. Sherry A. Glied PhD
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Correspondence to Erica C. Hutchins MPH, MBA.

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Hutchins, E.C., Frank, R.G. & Glied, S.A. The Evolving Private Psychiatric Inpatient Market. J Behav Health Serv Res 38, 122–131 (2011). https://doi.org/10.1007/s11414-009-9199-6

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  • DOI: https://doi.org/10.1007/s11414-009-9199-6

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