Policy-makers have long suspected that greater barriers to care result in d
epressed rural residents being less likely to receive high-qualify treatmen
t. This study recruited 470 depressed community residents in a 1992 telepho
ne survey, followed 95 percent of them through one year, and abstracted add
itional data on their health care utilization from insurance claims, medica
l and pharmacy records. Bivariate and multivariate models demonstrated that
during the year following the baseline there were no significant rural-urb
an differences in the rate (probability of any outpatient depression treatm
ent), type (probability of receiving general medical depression care only),
or quality (completion of guideline-concordant acute-stage care) of outpat
ient depression treatment. Annual expenditures for outpatient depression tr
eatment were lower for rural subjects compared with their urban counterpart
s. Rural subjects had 3.05 times the odds of being admitted to a hospital f
or physical problems and 3.06 times the odds of being admitted to a hospita
l for mental health problems during the year following baseline compared wi
th urban subjects. Cost-offset analyses demonstrate that every dollar inves
ted in depression treatment was associated with a $2.61 decrease in the cos
t of treating physical problems in depressed rural residents. Limited insur
ance coverage and limited availability of services were the most significan
t barriers to speciality and general medical outpatient treatment for depre
ssion in both rural and urban residents. More than 80 percent of depressed
residents in both rural and urban areas visited a primary care provider dur
ing the year following baseline. The potential cost offset of depression tr
eatment in rural populations plus the improvement in productivity observed
in both rural and urban populations indicate that it may be economically po
ssible to improve quality of care for depression without bankrupting an alr
eady strained health care budget.