Expenditures. Expenditures by the 8 types of mental health organizations covered in this report totaled $23.1 billion in 1988 in the United States and territories. Three States (California, New York, and Pennsylvania) accounted for 30 percent of this total. Nationally, State and county mental hospitals (hereafter called State mental hospitals) accounted for the largest proportion of all expenditures (30 percent, down from 34 percent in 1986). Private psychiatric hospitals and multiservice mental health organizations had the next largest expenditures, each accounting for 20 percent of the total, followed by the separate psychiatric services of non-Federal general hospitals at 16 percent. Department of Veterans Affairs (VA) mental health services, residential treatment centers (RTCs) for emotionally disturbed children, freestanding psychiatric outpatient clinics, and freestanding psychiatric partial care organizations accounted for 6 percent, 6 percent, 3 percent, and less than one-half percent of total expenditures, respectively. State mental hospitals represented the largest expenditures of any single type of mental health organization in 23 States; expenditures of private psychiatric hospitals were largest in 12 States; and expenditures of multiservice mental health organizations were the largest in 10 States. The $23.1 billion total for 1988 represented a 25 percent increase over the 1986 figure but, when adjusted for inflation, the estimated increase (expressed in constant dollars) was only 10 percent overall and 8 percent on a per capita basis. Constant dollar expenditures of most types of mental health organizations increased between 1986 and 1988, with the largest increase occurring among private psychiatric hospitals (54 percent). In contrast, constant dollar expenditures decreased for State mental hospitals and VA mental health services. Sources of Funds In 1988, the funds received by mental health organizations totaled $23.4 billion. Of this total, $8.8 billion (38 percent) was provided directly by State governments, predominantly by State mental health agencies. Direct Federal funds, plus Medicare and Medicaid (including the State and local share of Medicaid), provided $6.5 billion (28 percent) of total funding. Fees from clients (including private insurance) provided $5.2 billion (22 percent); direct local government funds provided 7 percent; and all other sources, 5 percent. State governments provided 77 percent of the funds received by State mental hospitals and were also the largest single source of funds for multiservice mental health organizations (51 percent) and freestanding psychiatric partial care organizations (44 percent). VA mental health services were funded by the Federal government, while 62 percent of funding for private psychiatric hospitals came from client fees (including private insurance).(ABSTRACT TRUNCATED AT 400 WORDS)