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Deinstitutionalization has left hospitals with a modified role, in which coercion and violence are a particularly common problem. Numerous studies, often based on comprehensive data sets, have investigated predictors of outcome such as rehospitalization rate, duration of stay and violent incidents. The variance explained by patient characteristics and baseline variables has been rather small, however, rendering it of little use for predicting individual cases. Clinical practice in hospitals varies - even more so in partial hospitalization programmes - and seems to depend more on the ideology and policy of the hospital and on the quality of community care services than on patient factors. How policy interventions can influence practice, however, and ultimately improve individual outcome, is still poorly understood. In the rehabilitation of schizophrenia patients, the relation of specific cognitive deficits to differential outcomes may facilitate the development of targeted interventions. However, advances in empirical research worthy of the prevailing optimism in the field are still eagerly awaited though. In vocational rehabilitation, individual placement and support in competitive employment has been shown to be a more effective alternative than conventional strategies. In general, there is a trend towards more intensive and individualized specific rehabilitation programmes.