One of the core principles in the System of Care philosophy is for youth mental health services to be provided in the least restrictive setting needed to facilitate behavior change and improve functioning. Following this principle means that residential care is used as a last resort, when alternatives are inappropriate, unavailable or in other ways not possible.
There is increasing research indicating that when there are positive outcomes from residential care, they are often short-lived after discharge due to insufficient coping skills training, lack of family involvement in treatment, and inadequate after-care planning. Although a considerable number of youth placed in residential care have failed other placements and viewed as the worst cases (e.g., primary diagnosis of conduct disorder), there is growing evidence of better functioning for these youth when treatment is provided in family or foster home settings rather than group homes. It is also important to note the emerging research which reflects the negative impact of residential care on younger children's development. With attachment to a primary caregiver being critical for brain development and normative socio-emotional functioning, younger children in residential care settings are at risk, due to high staff turnover and constant shifts in child-care providers. Intensive In-Home and other wraparound services reduce the need for residential care, except for specialty populations in which safety is a primary concern.
Home- and community-based services are less expensive and have been found to be equally effective or exceed the performance of residential care in terms of youth outcomes. The cost of residential care is incredible, with some states reporting that 60 to 75 percent of their total mental health service budget is spent on children in long-term residential treatment and psychiatric hospitals.
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