The 2001 Washington State Legislature directed the Institute to analyze the outcomes of public mental health consumers. This report examines the relationship between public mental health services and mental health-related hospitalizations and emergency departments. In 2007, one out of five adult hospital stays involved a mental health or substance abuse (MHSA) diagnosis in Washington State. A greater percentage of MHSA-related hospitalizations come from the emergency department and a disproportionate number are paid for by Medicare or Medicaid. Among Medicaid clients, those with frequent or high-cost emergency department visits are more likely to have an MHSA diagnosis. This report also explores the extent to which these clients may receive treatment from the public mental health system. Given the close relationship between these two systems, potential costs to public mental health and the state’s community hospitals should be evaluated as new mental health policies are considered and adopted in Washington State.