Two prominent features of mental health policy in the UK in recent years ha
ve been the rundown of hospital provision and the changing of the balance b
etween public and other provider sectors. This article examines the cost, q
uality of care and outcome implications. Public,voluntary and private provi
ders of mental health care are compared, based on a long-term study of peop
le moving out of psychiatric hospitals in London. Costs are found to be low
est in the private (for-profit) sector, and highest in the NHS and consorti
um (NHS and voluntary sector partnership) sectors. However, quality of care
indicators suggest that the lowest cost sector is performing least well, a
nd the highest cost sectors offer the best quality. These are associated wi
th some differences in user outcome.