CONRAD HOUSE OFFERS PATIENT-RESIDENTS COUNSELING, GROUP SOCIAL ACTIVITIES, EMPLOYMENT OPPORTUNITIES, REFERRAL TO OTHER SERVICE AGENCIES, AND A HOMELIKE SURROUNDING. THE PROGRAM EMPHASIZES PATIENT INTERACTION WITH NONPATIENT RESIDENTS--STUDENTS AND YOUNG ADULTS NEW TO THE CITY. THE NONPATIENTS ACT AS CATALYSTS FOR SOCIALIZATION AND BEHAVIOR MODELS FOR THE PATIENT-RESIDENTS. A COMBINATION RESEARCH-DEMONSTRATION PROJECT WAS UNDERTAKEN AT CONRAD HOUSE. RATING INSTRUMENTS WERE DEVELOPED, GROUP DYNAMICS WITHIN THE HOUSE WERE OBSERVED, TECHNIQUES FOR COORDINATING THE HALFWAY HOUSE'S SERVICES WITH OTHER COMMUNITY AGENCIES WERE EXPLORED, AND CLIENT OUTCOMES WERE ASSESSED. DURING THE COURSE OF THE PROJECT, 53 PATIENT-RESIDENTS LEFT CONRAD HOUSE WITH EMPLOYMENT, 35 RETURNED TO THE COMMUNITY UNEMPLOYED, AND 16 WENT BACK TO THE HOSPITAL. THE FOLLOWING TYPOLOGY WAS DEVELOPED: WAY-STATIONERS, WHO OBTAINED A JOB AND REENTERED THE COMMUNITY IN LESS THAN 4 MONTHS AFTER COMING TO CONRAD HOUSE (14 PATIENTS); SATURATED GRADUATES, WHO WERE INITIALLY LOW IN STRENGTH AND RESOURCES BUT, AFTER STAYING THE 1-YEAR MAXIMUM, LEFT CONRAD HOUSE EMPLOYED AND SOCIALLY IMPROVED (31 PATIENTS); FENCE-RIDERS, WHO STAYED AT THE HOUSE THE MAXIMUM 1 YEAR, IMPROVED LITTLE, AND MOVED INTO THE COMMUNITY UNEMPLOYED OR RETURNED TO THE HOSPITAL (14 PATIENTS); AND PREMATURE DEPARTEES, WHO, BECAUSE OF EXTREME IMPAIRMENT, POOR MOTIVATION, OR FAMILY INTERFERENCE, LEFT THE HOUSE WITHIN A FEW MONTHS EITHER TO RETURN TO THE HOSPITAL OR TO GO INTO THE COMMUNITY WITHOUT A JOB (45 PATIENTS). A RATING SCALE DEVELOPED SPECIFICALLY FOR CONRAD HOUSE WAS EFFECTIVE IN PREDICTING PATIENT OUTCOMES AND PROVED USEFUL IN FOLLOWING PATIENTS' PROGRESS. WORK-RELATED SCALES OF THE CONRAD HOUSE INSTRUMENT AND OF THE MINNESOTA MULTIPHASIC PERSONALITY INVENTORY WERE THE BEST PREDICTORS OF PATIENT-RESIDENT SUCCESS. A 1-YEAR FOLLOWUP STUDY OF FORMER CONRAD HOUSE PATIENT-RESIDENTS AND A MATCHED SAMPLE OF 15 FORMER PSYCHIATRIC PATIENTS WHO HAD NOT LIVED IN A HALFWAY HOUSE SHOWED THAT SIGNIFICANTLY MORE CONRAD HOUSE CLIENTS THAN CONTROL-GROUP SUBJECTS SUSTAINED EMPLOYMENT. A SURVEY OF OTHER MENTAL HEALTH AGENCIES IN THE COMMUNITY REVEALED THAT MOST AGENCY WORKERS FELT THAT CONRAD HOUSE WAS MAKING A POSITIVE CONTRIBUTION, EVEN THOUGH THE PROGRAM WAS EXPERIMENTAL AND ITS EFFICACY UNKNOWN. IT WAS CONCLUDED THAT THE MIXTURE OF PATIENT AND NONPATIENT RESIDENTS SEEMED INSTRUMENTAL IN THE GENERAL IMPROVEMENT OF THE PATIENTS' SOCIALIZATION AND SELF-UNDERSTANDING. IN DETERMINING WHAT TYPES OF PATIENTS HAVE THE GREATEST POTENTIAL FOR REHABILITATION IN A HALFWAY HOUSE SETTING, THE PATIENT'S ACTUAL FUNCTIONING LEVEL IS CONCLUDED TO BE MORE IMPORTANT THAN THE FORMAL DIAGNOSIS. ORGANIZED SOCIAL ACTIVITIES SEEMED LESS IMPORTANT THAN INFORMAL INTERACTIONS AS A MEANS OF IMPROVING SOCIALIZATION. THE CONRAD HOUSE EXPERIENCE HAS IMPLICATIONS FOR UNDERSTANDING THE ROLE OF HALFWAY HOUSES AND FOR IMPROVING THEIR CONTRIBUTIONS TO AFTERCARE FOR PSYCHIATRIC PATIENTS. SUPPORTING TABULAR DATA ARE INCLUDED. (LKM)