ObjectiveThis report estimates the treatment costs, cost-offset effects, and cost-effectiveness of Collaborative Care of depressive illness in primary care.Study DesignTreatment costs, cost-offset effects, and cost-effectiveness were assessed in two randomized, controlled trials. In the first randomized trial (N = 217), consulting psychiatrists provided enhanced management of pharmacotherapy and brief psychoeducational interventions to enhance adherence. In the second randomized trial (N = 153), Collaborative Care was implemented through brief cognitive-behavioral therapy and enhanced patient education. Consulting psychologists provided brief psychotherapy supplemented by educational materials and enhanced pharmacotherapy management.ResultsCollaborative Care increased the costs of treating depression largely because of the extra visits required to provide the interventions. There was a modest cost offset due to reduced use of specialty mental health services among Collaborative Care patients, but costs of ambulatory medical care services did not differ significantly between the intervention and control groups. Among patients with major depression there was a modest increase in cost-effectiveness. The cost per patient successfully treated was lower for Collaborative Care than for Usual Care patients. For patients with minor depression, Collaborative Care was more costly and not more cost-effective than Usual Care.ConclusionsCollaborative Care increased depression treatment costs and improved the cost-effectiveness of treatment for patients with major depression. A cost offset in specialty mental health costs, but not medical care costs, was observed. Collaborative Care may provide a means of increasing the value of treatment services for major depression.