Some observers fear that increasing reliance on managed care and capit
ated payment will reduce access to vocational rehabilitation services
particularly bose provided within public mental health systems. Howeve
r data from two studies suggest that under conditions of fiscal restra
int vocational services could actually reduce costs. This article iden
tifies the mechanisms by which costs might be reduced (improved functi
oning and substitution), examines some preliminary evidence, ann discu
sses the implications for integrated vocational services under managed
care and/or capitated payment systems.