The aim of this study was to show the usefulness of adding cost inform
ation to a routine data collection provided by a case register for ana
lysing the association between patients' characteristics and the direc
t costs of the psychiatric care actually provided. All patients (n = 7
06) who in 1992 had at least one contact with services which report to
the South Verona psychiatric case register and who received an ICD-10
diagnosis were included in the study. The costs of specialist psychia
tric care provided during the 365 days following the first contact in
1992 were calculated using a unit cost list. A bespoke software, linke
d to the case register, was designed to produce the individual informa
tion on costs directly. For each patient, costs were categorized as in
-patient costs, sheltered accommodation costs, day-care costs, out-pat
ient costs and community costs. All costs, grouped by service type, we
re found to differ significantly (P < 0.01) between diagnostic groups
(affective disorders, neurotic and somatoform disorders, schizophrenia
and related disorders, and other diagnoses). The multivariate analyse
s showed that costs are significantly higher for patients with a diagn
osis of schizophrenia and related disorders than for patients belongin
g to the other diagnostic groups. However, only 6% of the variation co
uld be explained by diagnostic group alone. On the other hand, between
40 and 50% of the costs of mental health care was predicted by patien
ts' personal characteristics and other measures recorded on the case r
egister. The results of the present study show that, where service use
is monitored regularly, the base from which decisions on community pr
ovision and placement are made can be informed by careful analysis of
routinely or easily available data on direct costs.