Background: Early intervention in psychosis is an accepted policy internationally. When 'A Vision for Change', the national blueprint for mental health policy in Ireland, was published in 2007 there was one Irish pilot service for early intervention in psychosis. The National Clinical Mental Health Programme Plan (2011) identified early intervention in psychosis as one of three areas for roll out nationally. There is limited economic evaluation in the field of mental health in Ireland to guide service development. This is in part due to lack of robust patient level data.Aims of the Study: The aim of the study was to investigate whether the introduction of an early intervention service in psychosis resulted in any change to the number and duration of admissions in people with first-episode psychosis.Methods: We examined two prospective epidemiological cohorts of individuals presenting with first-episode psychosis to an urban community mental health service (population 172,000). The historical cohort comprised of individuals presenting from 1995 to 1998 and received treatment as usual (n=132). The early intervention cohort presented to the same catchment area between 2008 and 2011 (n=97) following the introduction of an early intervention service in 2005.Results: We found significant reductions in the rates admitted for treatment across the two time periods. Reduction in the rate of admission was larger in this catchment than the reduction in the rate of admission in the country as a whole. There were significant reductions in the duration of untreated psychosis arising from the early intervention programme. Significant reductions in length of stay were accounted for by differences in baseline age and marital status. The average cost of admission declined from 15,821 to 9,398 in the early intervention cohort.Discussion and Limitations: The comparison pre and post early intervention service showed cost savings consistent with other studies internationally. Key issues are whether changes in the admission pattern were due to the implementation of early intervention or were explained by other factors. Examination of local and national factors showed that the dominant effect was from the implementation of early intervention. Limitations are that this is a comparison with a historical cohort and analysis is limited to inpatient costs only.Implications for Health Care Provision and Use: While there are cost savings, these represent opportunity cost savings, as the majority of costs associated with in-patient care are fixed. Studies such as this provide evidence that it is feasible to consider disinvestment strategies such as home care in the community.Implications for Health Policies: It is difficult to generalize interventions shown to work in one country to other countries, as health service structures differ and there are both local and national variations in service structure and delivery. It remains important to evaluate whether a policy is applicable within its local context.Implications for Further Research: Further research in this area is required to evaluate contemporaneous services and to examine whether increased costs in the community incurred through implementation of early intervention negate the savings made through reduction of admissions.