It is generally accepted that modern mental health care gives community treatment priority over partial or full inpatient treatment. The requirements for community treatment of severely ill and chronic psychiatric patients are complex and, together with financing by the different social insurance providers, may lead to a rather problematic fragmentation of health service supply. Schizophrenia is considered the most expensive mental illness in Germany. It is estimated that indirect costs (expressed in financial terms) are five times higher than the direct costs of treatment and care. Innovative concepts of psychosocial intervention show that case management and assertive community treatment reduce the hospitalisation rate and duration of inpatient treatment, enhance social integration, and find the approval of most patients. However, there is no empirical evidence supporting this "psychiatry with no beds". Consideration should be given to psychosocial interventions as an alternative to inpatient hospital treatment such as day hospital care, crisis houses, or acute home treatment.