Profit Driven

Profits and no Privacy in Psychotherapy: Managed Care

Read the Reactions of:

- Two Presidents of the American Psychiatric Association

- President of the American Psychological Association, Division of Psychoanalysis

- Timothy McCall, M.D., author of Examining Your Doctor.

- Dr. Elliot Valenstein, University of Michigan Professor Emeritus of Psychology

- Dr. Lawrence Sack, President of the American Association of Private Practice Psychiatrists


Reactions of two Presidents of the American Psychiatric Association:

Herbert S. Sacks, M.D. (President-elect):The New York Times, Sunday, October 27, 1996, “Connecticut Section”.

Dr. Sacks is described as having led, in the 1970’s, the “successful battle to mandate group health coverage for outpatient psychiatric treatment…” However, Dr. Sacks now describes managed care as “…totally undesirable in terms of people getting adequate care… Managed care operations of course would like…extraordinary profit for insurance companies… The greed is daunting… As an example of greed, the C.E.O. of USHealthcare will get in excess of $900 million plus… Where does the money come from? It comes from the denial and interruption of … patient care.

Harold I. Eist, M.D. (current President):American Journal of Psychiatry (153:9), September 1996, pp. 1123-1125.

“Make no mistake, we are under attack by a rapacious, dishonest, destructive, greed-driven insurance/managed-care/big business combine that is in the process of decimating all health care in America, particularly … [psychotherapy and psychiatric care]….

“The market is controlled by a few large corporations and the health insurance industry, stifling competition and excluding the choices of the people who need care and those who provide it. The health market is an imprisoned market, controlled by corporations, which operate identically to totalitarian states, with gag rules, discharge-without-cause clauses, and so-called appeals processes deriving directly from Machiavelli…. Society needs to know that managed care is a false promise based on a false idol”. Dr. Eist continues by emphasizing the need for his profession to fight the threats to ethics and confidentiality posed by managed care.


Dr. Nathan Stockhamer, President of The American Psychological Association, Division of Psychoanalysis:

“We must state emphatically that managed care is inherently flawed. We simply cannot let private entrepreneurs decide whether they want to spend money on behalf of patients or keep the money in corporate profits.”


Timothy B. McCall, M.D., Physician commentator, author of Examining Your Doctor, on National Public Radio, May 20, 1998

“Mental health care benefits have been cut by more than 50% in the last ten years. In particular, managed care plans along with employers have been reluctant to pay the cost of ongoing psychotherapy. Even patients with serious disorders that stem from such things as childhood sexual abuse are being limited to just a few visits. That’s if they are seen by a therapist at all…

The only area of mental health coverage that employers and HMO’s seem interested in funding is drug therapy. They’d rather just throw Prozac, or better yet, some generic substitute costing pennies a pill, at mental health problems”.


Dr. Elliot Valenstein, Professor Emeritus of Psychology, University of Michigan, author of Blaming the Brain: The Truth about Drugs and Mental Health.

“For psychiatrists, medical insurance companies, and especially the pharmaceutical industry the benefit derived from promoting drug treatment and chemical theories of mental disorders is primarily economic. Of course, the argument is never framed in that way…

Psychotherapeutic drugs, like the other physical therapies before it, have served the interests of the psychiatric profession. Of course, psychiatrists are not all of one mind, but in various ways the profession as a whole tends to promote drugs by exaggerating what is known about the chemical basis of mental disorders and the effectiveness of drugs, and often by discrediting alternative treatment modalities…

By adjusting payment schedules, medical insurers are playing a major role in shifting treatment toward drugs and away from psychotherapy.”


Dr. Lawrence Sack, President, American Association of Private Practice Psychiatrists,
”What Will Managed Care Do to the Profession of Psychiatry?”, August, 1996

“The managed care assault on all but the most brief psychotherapies, not just psychoanalysis, include excessive review, destruction of the doctor-patient relationship and environment for treatment, invasion of privacy, excessive demands for record-keeping and supposed standards of treatment that have as their goal a reduction in the availability of care….

The future of psychiatry is in doubt. [Psychiatric] Residencies in America cannot be filled with graduates from U.S. medical schools. Medical students know that psychiatrists are being coerced by managed care not to provide needed and often expensive…services. In many training programs, residents are not even exposed to psychotherapy. [Psychiatric] Residents are being trained with little understanding of how to listen to patients, and how to understand their thoughts, motivations, fears and feelings. There exists a very real threat of a mindless psychiatry, in which only chemical treatment will be understood and practiced…

Reviews of the necessity for the treatment being provided are undertaken by clinicians who profit financially, directly or indirectly, in proportion to the reduction in health care they produce. Often, these reviews are executed by inexperienced clinicians….

Psychotherapy instruction for medical students and [psychiatric]residents is in short supply. The result is residents trained primarily in medication management and severely limited in their ability…to talk meaningfully with their patients.”