Psychiatric hospitals have been accused of being both ineffective institutions and the main parties responsible for the chronic status of the mentally ill. However, there is a lack of research on the influence of mental health care facilities on either the communities in which they are located or the nearby out-patient services. Their presence may be a cause for increased psychiatric demand. This study investigates a possible association between the existence of such hospitals in given communities and an increase in hospitalization and demand for primary care services. The author compares the demand and client profile of out-patient services in similar communities, both with and without psychiatric hospitals Some evidence was found that in communities with such hospitals there is an increase in both hospital admittance and consultations in mental health care.