OBJECTIVES: It is important for the management of a psychiatric hospital having an acute-care ward to estimate medical practice revenues under different conditions. We developed a system dynamics (SD) simulation model for the treatment of acute schizophrenia to investigate the effect of the treatment of patients with acute schizophrenia on the hospital management. METHODS: We developed an SD simulation model for patient admission and discharge at a psychiatric acute-care ward. The model assumed an imaginary, newly built psychiatric hospital consisting of 3 types of wards: a psychiatric acute-care ward, a general psychiatric ward, and a psychiatric nursing-care ward. The rates of discharge were set at 40%/month, 30%/month and  20%/month for a psychiatric acute-care ward, a general psychiatric ward, and a psychiatric nursing-care ward, respectively. The number of newly admitted patients was supposed to be 10 per month. We compared the total medical practice revenues at 36 months. RESULTS: Up to 9 months of outpatient treatment, the total medical practice revenues increased and then decreased at 12 months. A 2-way sensitivity analysis on the first-time admissions and the duration of outpatient treatment revealed that the total medical practice revenues were higher when the number of newly admitted patients was 5-11 at 9 months of outpatient management; however, when the number of newly admitted patients was 12-15, the maximum medical practice revenue was obtained at 12 months of outpatient management. CONCLUSIONS: Total medical practice revenues change depending on the rates of discharge from a psychiatric acute-care ward, the duration of outpatient treatment and the number of newly admitted patients. A budget plan for each psychiatric hospital having a psychiatric acute-care ward should be based on the calculation of those parameters and a systematic approach to patient management is important.