Psychiatrist Helped Demonstrate Psychotherapy Is Cost-Effective

If psychotherapy has a place in the American health care system of tomorrow, give some credit to psychiatrist Susan Lazar, M.D., and other clinician-researchers who helped establish the evidence base for the cost-effectiveness of psychotherapy beginning more than 16 years ago.

That was when Hillary Rodham Clinton's Health Care Task Force was at work. Though the exact content of health insurance benefit packages hasn't yet been a focus of today's health care debates, a decade and a half ago task force members were weighing the relative value of any health care service as a criterion for inclusion in mandated benefits.

And “value” meant cost-effectiveness—the cost of providing the service compared with the benefits derived from the service.

“My own work on establishing the cost-effectiveness of psychotherapy really began in 1992 during the presidential campaign when people were worried about what Clinton was thinking about for health system reform,” said Lazar, a clinical professor of psychiatry at Georgetown University School of Medicine, George Washington University School of Medicine, and Uniformed Services University of the Health Sciences and a supervising and training analyst at the Washington Psychoanalytic Institute. “I said, ‘Let's study it to see if we can justify it.’ That led to the study group at the Washington Psychoanalytic Society to which I belonged beginning to read the mainstream medical, psychiatric, and psychological literature for cost-effectiveness studies.”

In fact, there was a fledgling literature on the subject going back to before the early 1980s. And in time Lazar's work on the subject earned her a role as a consultant to Bernard Arons, M.D., who was named the chair of the Work Group for Mental Health of the Health Care Task Force. And so Lazar became a regular at the task force's White House meetings.

“I soon realized that when you called researchers who had looked at cost-effectiveness of psychotherapy, they were eager to contribute what they had,” Lazar told Psychiatric News. “We created a network of interested researchers and clinicians.”

This included leading lights in research on all kinds of psychotherapy and psychiatric services such as Kenneth Wells, M.D., of Rand; Willard Manning, Ph.D., then of the University of Minnesota; Myrna Weissman, Ph.D., of Columbia University; Glen Gabbard, M.D., then with the Menninger Foundation; Lenore Terr, M.D., of the University of California, San Francisco; Jacob Lindy, M.D., of Cincinnati; Judith Herman, M.D., of Cambridge Hospital; and David Spiegel, M.D., of Stanford University, who had done research on psychotherapy and group therapy for women with breast cancer.

“They came on their own nickel to present data about cost-effectiveness,” Lazar said.

As they went along, they learned how to argue their case. “We learned that you had to talk about the effect of a specific service on a specific medical budget within a given period of time,” Lazar said, a feat that was difficult when discussing psychotherapy because the benefits might accrue many years out. “Most budget people can't think in terms of five or 10 years, only the next budget year.”

Lazar said she and her colleagues were able to present data about “cost-offset”—that is, data showing that psychotherapy saves money elsewhere, such as medical costs for disorders exacerbated by untreated depression. It was ultimately more meaningful, however, to present data reflecting cost-effectiveness, a measure of the economic value of a service obtained per dollar spent, she said.

“Cost-offset is interesting, but it is not a moral standard,” Lazar said. “It holds psychotherapy to a more stringent standard if you need to demonstrate cost-offset before you will provide psychotherapy benefits. You would not ask a surgeon or internist to prove they will lower other medical costs before you would reimburse for their care, especially for urgent services.”

The group's message began to be heard. “We found that in speaking with people and to staffers, when you make a cost-effectiveness argument with good data, you are really making two points at once,” she said. “So many people said, ‘Wait—you mean it works at all?’ ”

Since that time, the study of the cost-effectiveness of psychotherapy has matured. Today, Lazar is the editor and coauthor of Psychotherapy Is Worth It: A Comprehensive Review of Its Cost-Effectiveness with other members of the Committee on Psychotherapy of the Group for the Advancement of Psychiatry (GAP). The book is in press with American Psychiatric Publishing Inc.

(GAP's Web site describes the organization as a “think tank” for psychiatry. “The goal of GAP is to continue to germinate new and exciting ideas which will impact on the thinking and practice of mental health clinicians,” according to the Web site.)

The book includes chapters reviewing the literature on the cost-effectiveness of all kinds of psychotherapy in the treatment of schizophrenia, borderline personality disorder, posttraumatic stress disorder, anxiety disorders, depression, substance abuse, and psychotherapy of patients with medical illness. The book also covers psychotherapy for children and adolescents and the place of long-term and intensive psychodynamic psychotherapy and psychoanalysis.

“While there are perhaps still too few large-scale studies addressing the cost-effectiveness of psychotherapy for specific diagnostic groups of patients, we can arrive at some important impressions from the studies that we do have,” Lazar and colleagues write in their book. “Those that exist do confirm that, for many conditions, psychotherapy works, is cost-effective, can at times provide a significant cost-offset in other medical and hospital expenses, and is not overused or ‘abused’ by those not truly in need. Also, it is important to understand that a treatment that is cost-effective is not ‘cheap’, may not save money in other treatment costs, but does provide effective medical help at a cost acceptable to society, both in comparison to other effective treatments for the same condition and to medical treatments for other classes of medical disorder.”

Following the collapse of the Clinton health reform effort, Lazar continued to publish on the subject of psychotherapy and cost. In one publication in 1997, she joined Gabbard, Spiegel, and Jeffrey Hornberger, M.D., M.S., in writing “The Economic Impact of Psychotherapy,” which was the cover article for the February 1997 American Journal of Psychiatry.

Lazar said she believes the new book represents an up-to-date compendium of what has been learned about costs, cost-effectiveness, and psychotherapy since the subject first began to be studied in a formal way.

“What you see in the past 10 years is a much more sophisticated measure of cost-effectiveness, including measures of work productivity, and such measures as quality-adjusted life years,” she pointed out.

(Quality-adjusted life years is a measure of disease burden, including both the quality and the quantity of life lived.)

And she believes the book presents a case that will be difficult to ignore. “I think it can be a very powerful tool if you are talking to those designing medical insurance benefits,” she said. “It presents an unassailable argument.”

“The Economic Impact of Psychotherapy: A Review” is posted at <http://ajp.psychiatryonline.org/cgi/reprint/154/2/147>. GAP's Web site is <www.ourgap.org/default.aspx>.