Severe mental illnesses (SMI) are associated with high mental healthcare and other healthcare costs. In 2012, mental healthcare labels were developed to create more transparency between insurance companies, municipalities, and mental healthcare. The labels are based on care intensity, and should provide a regional overview of the present groups of patients with SMI.<br/> AIM: Explore the functionality and validity of the used labels in relation to needs for care and psychosocial functioning.<br/> METHOD: The ROM data (needs for care, functioning) from 706 patients were tested per label by Chi-square tests and ANOVAs. For two high complex labels (alarming care avoiders and persons with safety risks), repeated measures ANOVAs and McNemar tests were used to analyse changes in functioning and needs over time.<br/> RESULTS: To a limited extent, the labels were distinctive in care needs and functioning. The most restrictions in functioning and (unfulfilled) needs were present in the labels 'alarming care avoiders' and 'avoiding danger'. These findings were stable over time.<br/> CONCLUSION: The labels are not sufficiently distinctive. To enhance regional care planning, it is desirable to combine existing information on healthcare labels with information on care needs and functioning. KEY WORDS functioning, mental healthcare labels, needs for care, routine outcome monitoring, severe mental illness.