Four assumptions underlie the stereotyped view of use of outpatient mental health services: 1) all use is alike, 2) any use leads to high use, 3) all high use is discretionary, and 4) insurance encourages excessive use. The authors refute the first three assumptions and suggest that different types of treatment episodes vary in their responsiveness to price. Diagnosis appears to be a poor indicator of inpatient needs; some coverage limits outpatient benefits according to type of treatment. The authors favor a combination of pricing strategies, as well as case management and clinical review for high users, which would not impede initial treatment but would limit excessive use of mental health services.