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This paper examines the impact of the Kansas Mental Health Reform Act of 1990 on the mental health care system, on the budget of the state, and on the budgets of the Community Mental Health Centers. Both the successes and the failures of Mental Health Reform suggest that coordination of institutional and financial arrangements are needed to improve the outcomes of care. From a budgetary perspective, Mental Health Reform demonstrates the central role of Medicare and Medicaid in financing services for vulnerable populations. The reform also demonstrates that shifting costs to Medicare and Medicaid is a component of prudent financial management by the states.

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