A controlled study of the impact of brief, transitional acute care in reducing psychiatric treatment costs for people in rural areas is presented. Treatment emphasized home-based counseling and support, 24-hour rapid response, rural outreach, and intensive support management. The objective was to avert hospitalizations when possible, expedite discharge, and reduce likelihood of readmission, while maintaining comparable or superior clinical outcome. One-hundred eighty-two participants were randomly assigned to the experimental group or a routine care control group. Clinical and utilization data tracked at initial contact, 2 weeks, 6 months, and 12 months suggest substantially lower hospital utilization for the experimental group. Clinical outcomes were comparable between groups.