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psychotherapy works and saves money

A review of research into the value of psychotherapy carried out in the late 1990s, shows that for most clients psychotherapy has a positive affect on their well-being. This improvement in people's psychological health produced cost savings for society by substantially reducing the costs of ongoing medical care and lost work days. The review noted that better outcomes were acheived when clients could decide how much therapy they needed, and that clients didn't make unnecessary use of free therapy. The full article is posted below.

Efficacy and Cost Effectiveness of Psychotherapy

Prepared by Glen O. Gabbard MD and Susan G Lazar MD for the American Psychiatric Association (APA) Commission on Psychotherapy by Psychiatrists

Psychotherapy Works

  • At the end of psychotherapy, the average treated patient is better off than 80% of untreated patients. (1)

  • The magnitude of effect of psychotherapy is equivalent to a level that justifies the interruption of clinical trials on the grounds that it would be unethical to withhold such a highly effective treatment from patients. (2)

  • Family therapy reduces the relapse rate in patients with schizophrenia to the same extent (50%) as antipsychotic medications. (3)

  • For children with anxiety and depressive disorders and for those with severe or multiple pathologies, intensive psychoanalytic treatment at 4-5 times per week is more efficacious than 1-3 time per week therapy, and treatment length is positively correlated with better outcomes. (4,5)

  • A Consumer Reports survey of 2900 readers who received psychotherapy from mental health professionals showed that longer length of treatment was associated with better outcomes, and worse outcomes were linked to insurance or managed care plans that artificially limited the frequency and length of the psychotherapy. (6)

  • Results of the NIMH Treatment of Depression Research Program showed that short-term treatments were inadequate for most patients. In particular, work-impaired and perfectionistic patients require a longer course of psychotherapy for recovery. (7,8,9) 

  • Patients with metastatic breast cancer and malignant melanoma have statistically significant --movements in survival and morbidity when treated with group therapy.(10,11)

  • Dynamic therapy of opiate-dependent methadone maintenance patients allows them to maintain their gains at 6-month follow-up compared to standard drug counseling.(12)

Psychotherapy Saves Money

  • A review of the English-language literature between 1984 and 1994 found that in 88% of studies, psychotherapy contributes to cost savings when used for patients with severe psychiatric disorders and substance abuse by reducing hospitalizations, medical expenses, and work disability. (13)

  • Twice-weekly psychotherapy over a 12-month period is highly cost effective with borderline personality disorder patients because it decreases use of psychiatric inpatient services, emergency room care, and appointments with other medical specialists. Work performance is also improved. Savings have been calculated at $10,000 per patient per year. (13,14,15)

  • Comparing Australia's mental health care delivery system with its unlimited coverage of psychotherapy, including psychoanalysis, to the limited coverage of psychotherapy in New Zealand, the cost of psychiatric care per capita in New Zealand is 44% higher because of greater use of psychiatric hospitalization. (16)

  • The expansion of psychotherapy coverage (accompanied by utilization review) for the U.S. military dependents by CHAMPUS resulted in a net savings of $200 million over 3 years through reductions in psychiatric hospitalization. For every $1 spent on psychotherapy, $4 were saved.(17)

  • A recent German study of 666 dynamic psychotherapy and psychoanalytic patients found that treatment decreased medical visits by one-third, lost work days by two-fifths, and hospital days by two-third's. Successful outcomes were linked to longer duration treatment.(18)

Benefits for Psychotherapy Are Not Abused

  • Even when psychiatric care is free, only 4.3% of the population uses outpatient psychotherapy, and the average length of treatment is 11 sessions. (19)

  • Studies have documented that higher co-payments for outpatient therapy frequently puts treatment out of the reach of those in greatest need. (20,21)


1. Lambert MJ & Bergin AE: The effectiveness of psychotherapy. In Handbook of psychotherapy & Behavior Change (4-h ed.). Bergin A & Garfield S (eds). New York: John Wiley & Sons, 1994, pp. 141-150

2. Ursano R & Silberman EK: Psychoanalysis, psychoanalytic psychotherapy, and supportive psychotherapy. In The American Psychiatric Press Textbook of Psychiatry (2nd ed.) Hales E, Yudofsky SC, Talbott J (eds). Washington, DC: American Psychiatric Press, 1994

3. Hogarty GE et al: The environmental-Personal Indicators in the Course of Schizophrenia (EPICS) Research Group: Family psychoeducation, social skills training, and maintenance chemotherapy in the aftercare treatment of schizophrenia. II: two-year effects of a controlled study on relapse and adjustment. Arch Gen Psychiatry 48:340-347, 1991

4. Fonagy P & Target M: Predictors of outcome in child psychoanalysis: a retrospective study of 763 cases at the Anna Freud Centre. J. Am. Psychoanalytic Assoc. 44:27-77, 1996

5. Target M & Fonagy P: Efficacy of psychoanalysis for children with emotional disorders. Am Acad Child Adolesc Psychiatry 33:1134-1144, 1994

6. Consumer Reports. Mental Health: Does therapy help? November 1995, pp. 734-739

7. Blatt S et al: Impact of perfectionism and need for approval on the brief treatment of depression: the National Institute of Mental Health Treatment of Depression Collaborative Research Program revisited. J Consult Clin Pychol 63:125-132, 1995

8. Elkin I: The NLMH Treatment of Depression Collaborative Research Program: where we began and where we are. In, Handbook of psychotherapy & Behavior Change (4,h ed.). Bergin A & Garfield S (eds). NewYork: John Wiley & Sons, 1994

9. Mintz j et al: Treatment of depression and the functional capacity to work. Arch Gen Psychiatry 49:761768, 1992

10. Spiegel D et al: Effective psychosocial treatment on survival of patients with metastatic breast cancer. Lacet. 2:888-891, 1989

11. Fawzy F et al: Malignant melanoma effects of an early structured psychiatric intervention: coping and affective state on recurrence and survival 6 years later. Arch Gen Psychiatry 50:681-689, 1993

12. Woody GE et al: Psychotherapy in community methadone programs: a validation study. Amer J Psychiatry 152:130-1308, 1995

13. Gabbard G et al: The economic impact of psychotherapy: a review, Am J Psychiatry, 154:147-155, 1997

14. Linehan M et al: A cognitive-behavioral treatment of chronically parasuicidal borderline patients. Arch Gen Psychiatry 48:1060-1064, 1991

15. Stevenson J & Meares R: An outcome study of psychotherapy for patients with borderline personality disorder. Am J Psychiatry 149:358-362, 1992

16. Andrews G: Private and public psychiatry: a comparison of two health care systems. Am J Psychiatry 146:881-886, 1989

17. Zients A: Presentation to the Mental Health Work Group, White House Task Force for National Health Care Reform, April 23, 1993

18. Dossman R et al: The long-term benefits of intensive psychotherapy. A view from Germany, in S Lazar (ed) Psychoanalytic Inquiry Supplement, Intensive dynamic psychotherapy: making the case in an era of managed care, pp. 74-86, 1997

19. Manning WG Jr et al: How cost sharing affects the use of ambulatory mental health services. JAMA 256:1930-1934,1986

20. Landennan L et al: The relationship between insurance coverage and psychiatric disorder in predicting use of mental health services. Am J Psychiatry 151:1785-1790, 1994

21. Simon G et al: Impact of visit co-payments on outpatient mental health utilization by members of a health maintenance organization. Am J Psychiatry 153:331-338, 1996

© American Psychiatric Association
Article pubslished by: Amercian Psychiatric Association (APA)

Article posted 30 July 2006