RESISTANCE TO EVALUATION OF MENTAL HEALTH SERVICES HAS AT LEAST FOUR MAJOR COMPONENTS: (1) ADMINISTRATORS WHO WERE FORMERLY CLINICIANS WITH LITTLE TRAINING IN SOPHISTICATED MANAGEMENT PRACTICES, (2) A CONCEPT OF PROFESSIONALISM AMONG MENTAL HEALTH PERSONNEL THAT RESENTS 'OUTSIDE' INVOLVEMENT IN ANY PHASE OF THEIR WORK, (3) THE DIFFICULTY OF MEASURING THE INTANGIBLE ACHIEVEMENTS OF MENTAL HEALTH SERVICES, AND (4) LIMITED FUNDS AVAILABLE FOR EFFECTIVE EVALUATION. THE ESSENTIAL ELEMENTS REQUIRED FOR EVALUATING ANY HUMAN SERVICE PROGRAM ARE A STATEMENT OF PROGRAM OBJECTIVES, A FORMULATION OF THE ACTIVITIES OR SERVICES TO BE IMPLEMENTED, SPECIFICATION OF THE TARGET POPULATION, DETERMINATION OF PROGRAM EFFECTIVENESS, AND DETERMINATION OF PROGRAM EFFICIENCY. EACH OF THESE ELEMENTS IS BRIEFLY DISCUSSED. A PROPOSED INSTRUMENT FOR EVALUATING PSYCHIATRIC PATIENTS IS CALLED THE FUNCTIONAL BASELINE SYSTEM (FBS). THE FBS FOCUSES EXCLUSIVELY ON THE CLIENT'S FUNCTIONING IN VOCATIONAL, EMOTIONAL, AND SOCIAL AREAS. IT IS CONSTRUCTED TO ALLOW FOR RAPID ASSESSMENT OF A PATIENT BASED ON OBSERVATIONS AND INFORMATION SOLICITED DURING AN INTERVIEW. THE FBS CONSISTS OF THREE EIGHT POINT SUBSCALES--SKILL/TASK VOCATIONAL FUNCTIONING SCALE, SOCIAL FUNCTIONING SCALE, AND EMOTIONAL FUNCTIONING SCALE--AND AN EIGHT-POINT COMPOSITE SCALE, THE OVERALL FUNCTIONING AND DISPOSITIONAL SCALE. A SAMPLE OF EACH OF THESE SCALES IS PROVIDED, AND RELIABILITY AND VALIDITY ARE DISCUSSED. RESULTS OF A PILOT STUDY TESTING AN EVALUATION MODEL AT THE DAY TREATMENT CENTER OF THE READING HOSPITAL AND MEDICAL CENTER ARE REPORTED. THE EVALUATION STRUCTURE PROVIDES THAT PATIENTS BE ASSIGNED TO ONE OF FOUR GROUPS, DEPENDING ON ILLNESS TYPE, WITH EACH GROUP ORIENTED TOWARD REALISTIC BEHAVIORAL OBJECTIVES APPROPRIATE FOR THE MEMBERS OF THAT GROUP. RESULTS OF THE EVALUATION ARE REPORTED FOR EACH GROUP. TABULAR DATA AND REFERENCES ARE PROVIDED.