This study linked all claims data for reimbursable medical services and drugs of a cohort of 16,227 Medicaid-eligible recipients diagnosed with schizophrenia residing in the State of Georgia, with the treatment history file and Hospital Medical Information System file of each of the ten Georgia State psychiatric hospitals (Georgia Department of Human Resources [DHR]), which do not routinely bill Medicaid for services rendered. This provided a comprehensive picture of the medical resources consumed for each schizophrenia patient, allowing determination of expenditure use patterns, as well as forecast of future medical costs. Patient-level data were aggregated by category of service and reported as costs per member per month (PMPM). Autoregressive integrated moving average time series models described the temporal pattern of expenditures for 8 years of total cost data and were used to forecast expenditures 5 years into the future. From 1990 to 1997, total cumulative expenditures were over 1.09 billion dollars, expressed in 1995 constant dollars. DHR institutional care dominated the cost of care, but expenditures significantly decreased over time. Apparently offsetting this decrease was an increase in prescription drug cost between 1990 and 1995, from 5.7 percent of total expenditures to 10.5 percent. Total Medicaid and Medicare expenditures in 1995 dollars were relatively constant at approximately 700 dollars PMPM. Prescription expenditures increased from 50 dollars in 1990 to 100 dollars PMPM in 1997 and were projected to increase to 150 dollars in 2002. Expenditures were lower for persons continuously eligible for Medicaid than for the total cohort. Trends include a significant increase in prescription expenditures over time concurrent with decreases in inpatient expenditures and relatively stable changes in community mental health center expenditures.