As part of a longitudinal evaluation study on the effects of psychiatric `private-house' facilities, the identity of chronic patients living in small-scale psychiatric units and patiens living in hospital wards was examined. The research population consisted of long stay patients with the exception of oligophrenic and psyscho-geriatric patients. Patients living in nearly normal circumstances, not unlike the average family situation, showed a markedly lesser degree of loss of identity. In the small-scale facilities of modern dutch psychiatric hospitals, the ego strength of the inmates seems to be enhanced. This therapeutic effect manifests itself despite the fact that this `private-house-psychiatry' stresses the residential aspect rather than psychiatric treatment.