The Evolving Private Psychiatric Inpatient Market

  • Erica C. HutchinsEmail author
  • Richard G. Frank
  • Sherry A. Glied


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.


Psychiatric Hospital Occupancy Rate Market Leader Behavioral Health Care Prospective Payment System 
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Copyright information

© National Council for Community Behavioral Healthcare 2009

Authors and Affiliations

  • Erica C. Hutchins
    • 2
    Email author
  • Richard G. Frank
    • 3
  • Sherry A. Glied
    • 1
  1. 1.Department of Health Policy and Management, Mailman School of Public HealthColumbia UniversityNew YorkUSA
  2. 2.New YorkUSA
  3. 3.Department of Health Care PolicyHarvard Medical SchoolBostonUSA

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