A venture-backed start-up in Fairfax, Va., claims to have a new cure for upward-spiraling mental-health-care costs. In June American Day Treatment Centers, which offers partial-hospitalization programs, opened a third center providing outpatient education, therapy, and recreation to adolescents who might otherwise be hospitalized at three to four times the cost. Part-time hospitals cut overhead by using smaller facilities and only one work shift, says CEO James K. Don. As mental-health-care costs continue to soar and insurers limit hospital stays, he expects day treatment will win over more patients, their families, and insurers. -- Anne Murphy

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