Washington State Institute for Public Policy
Individual Placement and Support (IPS) for individuals with serious mental illness
Adult Mental Health: Serious Mental Illness
Benefit-cost estimates updated December 2016.  Literature review updated May 2014.
These studies assess the Individual Placement and Support (IPS) model of supported employment compared with typical vocational services for individuals with serious mental illness. The IPS model focuses on competitive employment, client interests, rapid job placement, and ongoing support by employment specialists. In contrast, the comparison groups typically received vocational services that focused on building job skills before employment placement.
BENEFIT-COST
META-ANALYSIS
CITATIONS
The estimates shown are present value, life cycle benefits and costs. All dollars are expressed in the base year chosen for this analysis (2015). The chance the benefits exceed the costs are derived from a Monte Carlo risk analysis. The details on this, as well as the economic discount rates and other relevant parameters are described in our Technical Documentation.
Benefit-Cost Summary Statistics Per Participant
Benefits to:
Taxpayers $558 Benefits minus costs $607
Participants $1,251 Benefit to cost ratio $1.76
Others ($2) Chance the program will produce
Indirect ($402) benefits greater than the costs 61 %
Total benefits $1,404
Net program cost ($797)
Benefits minus cost $607
1In addition to the outcomes measured in the meta-analysis table, WSIPP measures benefits and costs estimated from other outcomes associated with those reported in the evaluation literature. For example, empirical research demonstrates that high school graduation leads to reduced crime. These associated measures provide a more complete picture of the detailed costs and benefits of the program.

2“Others” includes benefits to people other than taxpayers and participants. Depending on the program, it could include reductions in crime victimization, the economic benefits from a more educated workforce, and the benefits from employer-paid health insurance.

3“Indirect benefits” includes estimates of the net changes in the value of a statistical life and net changes in the deadweight costs of taxation.
Detailed Monetary Benefit Estimates Per Participant
Benefits from changes to:1 Benefits to:
Taxpayers Participants Others2 Indirect3 Total
Labor market earnings associated with employment $568 $1,251 $0 $0 $1,819
Health care associated with psychiatric hospitalization ($10) $0 ($2) ($6) ($19)
Adjustment for deadweight cost of program $0 $0 $0 ($396) ($396)
Totals $558 $1,251 ($2) ($402) $1,404
Detailed Annual Cost Estimates Per Participant
Annual cost Year dollars Summary
Program costs $1,644 2001 Present value of net program costs (in 2015 dollars) ($797)
Comparison costs $1,027 2001 Cost range (+ or -) 60 %
The per-participant cost of IPS is based on the average annual cost found by Latimer et al., 2004. The cost of the comparison group is a weighted average of the costs to provide the services that the comparison group received in the studies we reviewed. Comparison group participants in these studies received enhanced vocational rehabilitation, traditional “train and place” vocational services or Clubhouse services. The ratio of the cost of enhanced vocational rehabilitation and traditional train and place vocational services compared to IPS was reported by Dixon et al., 2002 and the cost of Clubhouse vocational services was reported by Macias, 2001. Dixon et al., (2002). Cost-effectiveness of two vocational rehabilitation programs for persons with severe mental illness. Psychiatric Services, 53(9), 1118-1124. Latimer et al., (2004). The cost of high-fidelity supported employment programs for people with severe mental illness. Psychiatric Services, 55(4), 401-406. Macias, C. (2001). Massachusetts employment Intervention Demonstration Project: An experimental comparison of PACT and Clubhouse (Final Report). Retrieved from: http://www.massclubs.org/Docs/ComparisonPACandClubhouseModels2.pdf
The figures shown are estimates of the costs to implement programs in Washington. The comparison group costs reflect either no treatment or treatment as usual, depending on how effect sizes were calculated in the meta-analysis. The cost range reported above reflects potential variation or uncertainty in the cost estimate; more detail can be found in our Technical Documentation.
Estimated Cumulative Net Benefits Over Time (Non-Discounted Dollars)
The graph above illustrates the estimated cumulative net benefits per-participant for the first fifty years beyond the initial investment in the program. We present these cash flows in non-discounted dollars to simplify the “break-even” point from a budgeting perspective. If the dollars are negative (bars below $0 line), the cumulative benefits do not outweigh the cost of the program up to that point in time. The program breaks even when the dollars reach $0. At this point, the total benefits to participants, taxpayers, and others, are equal to the cost of the program. If the dollars are above $0, the benefits of the program exceed the initial investment.

Meta-analysis is a statistical method to combine the results from separate studies on a program, policy, or topic in order to estimate its effect on an outcome. WSIPP systematically evaluates all credible evaluations we can locate on each topic. The outcomes measured are the types of program impacts that were measured in the research literature (for example, crime or educational attainment). Treatment N represents the total number of individuals or units in the treatment group across the included studies.

An effect size (ES) is a standard metric that summarizes the degree to which a program or policy affects a measured outcome. If the effect size is positive, the outcome increases. If the effect size is negative, the outcome decreases.

Adjusted effect sizes are used to calculate the benefits from our benefit cost model. WSIPP may adjust effect sizes based on methodological characteristics of the study. For example, we may adjust effect sizes when a study has a weak research design or when the program developer is involved in the research. The magnitude of these adjustments varies depending on the topic area.

WSIPP may also adjust the second ES measurement. Research shows the magnitude of some effect sizes decrease over time. For those effect sizes, we estimate outcome-based adjustments which we apply between the first time ES is estimated and the second time ES is estimated. We also report the unadjusted effect size to show the effect sizes before any adjustments have been made. More details about these adjustments can be found in our Technical Documentation.

Meta-Analysis of Program Effects
Outcomes measured Primary or secondary participant No. of effect sizes Treatment N Adjusted effect sizes (ES) and standard errors (SE) used in the benefit-cost analysis Unadjusted effect size (random effects model)
First time ES is estimated Second time ES is estimated
ES SE Age ES SE Age ES p-value
Employment 5 403 0.358 0.283 40 0.000 0.000 41 0.358 0.206
Hospitalization (psychiatric) 2 222 -0.003 0.288 40 0.000 0.000 41 -0.003 0.993
Earnings 6 417 0.385 0.123 40 0.000 0.000 41 0.385 0.002
Competitive employment 13 963 1.075 0.105 40 0.000 0.000 41 1.075 0.001
Hours worked 4 347 0.303 0.196 40 0.000 0.000 41 0.303 0.121
Psychiatric symptoms 1 74 -0.136 0.164 40 0.000 0.000 41 -0.136 0.404
Citations Used in the Meta-Analysis

Bond, G.R., Salyers, M.P., Dincin, J., Drake, R., Becker, D.R., Fraser, V.V., & Haines, M. (2007). A randomized controlled trial comparing two vocational models for persons with severe mental illness. Journal of Consulting and Clinical Psychology, 75(6), 968-982.

Burns, T., Catty, J., Becker, T., Drake, R.E., Fioritti, A., Knapp, M., . . . Wiersma, D. (2007). The effectiveness of supported employment for people with severe mental illness: A randomised controlled trial. The Lancet, 370(9593), 1146-1152.

Burns, T. Catty, J., White, S., Becker, T., Koletsi, M., Fioritti, A., . . . Lauber, C. (2009). The impact of supported employment and working on clinical and social functioning: Results of an international study of individual placement and support. Schizophrenia Bulletin, 35(5), 949-958.

Davis, L.L., Leon, A.C., Toscano, R., Drebing, C.E., Ward, L.C., Parker, P.E., Kashner, T.M., ... Drake, R.E. (2012). A randomized controlled trial of supported employment among veterans with posttraumatic stress disorder. Psychiatric Services, 63(5), 464-470.

Drake, R.E., McHugo, G.J., Becker, D.R., Anthony, W.A., & Clark, R.E. (1996). The New Hampshire Study of Supported Employment for People With Severe Mental Illness. Journal of Consulting and Clinical Psychology, 64(2): 391-399.

Drake, R.E., McHugo, G.J., Bebout, R.R., Becker, D.R., Harris, M., Bond, G.R., & Quimby, E. (1999). A randomized clinical trial of supported employment for inner-city patients with severe mental disorders. Archives of General Psychiatry, 56(7), 627-633.

Heslin, M., Howard, L., Leese, M., McCrone, P., Rice, C., Jarrett, M., ... & Thornicroft, G. (2011). Randomized controlled trial of supported employment in England: 2 year follow up of the Supported Work and Needs (SWAN) study. World Psychiatry, 10(2), 132-137.

Hoffmann, H., Jackel, D., Glauser, S., & Kupper, Z. (2012). A randomised controlled trial of the efficacy of supported employment. Acta Psychiatrica Scandinavica, 125(2), 157-67.

Latimer, E., Lecomte, T., Becker, D.R., Drake, R.E., Duclos, I., Piat, M., . . . Xie, H. (2006). Generalisability of the individual placement and support model of supported employment: Results of a Canadian randomised controlled trial. The British Journal of Psychiatry, 189(1), 65-73.

Lehman, A.F., Goldberg, R., Dixon, L.B., McNary, S., Postrado, L., Hackman, A., & McDonnell, K. (2002). Improving Employment Outcomes for Persons With Severe Mental Illnesses. Archives of General Psychiatry, 59(2): 165-172.

Mueser, K.T., Clark, R.E., Haines, M., Drake, R.E., McHugo, G.J., Bond, G.R., . . . Swain, K. (2004). The Hartford study of supported employment for persons with severe mental illness. Journal of Consulting and Clinical Psychology, 72(3), 479-488.

Tsang, H.W.H., Chan, A., Wong, A., & Liberman, R.P. 2009). Vocational outcomes of an integrated supported employment program for individuals with persistent and severe mental illness. Journal of Behavior Therapy and Experimental Psychiatry, 40(2), 292-305.

Twamley, E., Narvaez, J., Becker, D., Bartels, S., & Jeste, D. (2008). Supported employment for middle-aged and older people with schizophrenia. American Journal of Psychiatric Rehabilitation, 11(1), 76-89.

Wong, K.K., Chiu, R., Tang, B., Mak, D., Liu, J., & Chiu, S.N. (2008). A randomized controlled trial of a supported employment program for persons with long-term mental illness in Hong Kong. Psychiatric Services, 59(1), 84-90.

For more information on the methods
used please see our Technical Documentation.
360.664.9800
institute@wsipp.wa.gov