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Cost-benefit analysis of psychological therapy

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Author Info

  • R. Laynard

    (Centre for Economic Performance, London School of Economics, UK,)

  • D. Clark

    (Centre for Economic Performance, London School of Economics, UK,)

  • M. Knapp

    (Centre for Economic Performance, London School of Economics, UK,)

  • G. Mayraz

    (Centre for Economic Performance, London School of Economics, UK,)

Abstract

At present six million people are suffering from clinical depression or anxiety disorders, but only a quarter of them are in treatment. NICE Guidelines prescribe the offer of evidence-based psychological therapy, but they are not implemented, due to lack of therapists within the NHS. We therefore estimate the economic costs and benefits of providing psychological therapy to people not now in treatment. The cost to the governement would be fully covered by the savings in incapacity benefits and extra taxes that result from more people being able to worl. On our estimates, the cost could be recovered within two years – and certainly within five. And the benefits to the whole economy are greater still. This is not because we expect the extra theropy to be targeted especially at people with problems about work. It is because the cost of the therapy is so small (£750 in total), the recovery rates are so high (50 per cent) and the cost of a person on IB is so large (£750 per month). These findings strongly reinforce the humanitatian case for implementing the NICE Guidelines. Current proposals for doing this would require som8,000 extra psychological therapists withing the NHS over the six years.

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Bibliographic Info

Article provided by National Institute of Economic and Social Research in its journal National Institute Economic Review.

Volume (Year): 202 (2007)
Issue (Month): 1 (October)
Pages: 90-98

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Handle: RePEc:sae:niesru:v:202:y:2007:i:1:p:90-98

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Keywords: Depression; anxiety; cost-benefit analysis; cognitive behavioural therapy; psychoogical therapists;

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  1. Alejandro Cuñat & Marc J. Melitz, 2007. "Volatility, Labor Market Flexibility, and the Pattern of Comparative Advantage," CEP Discussion Papers dp0799, Centre for Economic Performance, LSE.
  2. Henry G. Overman & Patricia Rice & Anthony J. Venables, 2010. "Economic linkages across space," LSE Research Online Documents on Economics 30779, London School of Economics and Political Science, LSE Library.
  3. Christos Genakos & Tommaso Valletti, 2011. "Testing The “Waterbed” Effect In Mobile Telephony," Journal of the European Economic Association, European Economic Association, European Economic Association, vol. 9(6), pages 1114-1142, December.
  4. Giulia Faggio, 2007. "Job destruction, job creation and unemployment in transition countries: what can we learn?," LSE Research Online Documents on Economics 19716, London School of Economics and Political Science, LSE Library.
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Cited by:
  1. Böckerman, Petri & Johansson, Edvard & Saarni, Samuli I., 2011. "Do established health-related quality-of-life measures adequately capture the impact of chronic conditions on subjective well-being?," Health Policy, Elsevier, vol. 100(1), pages 91-95, April.
  2. Layard, Richard & Chisholm, Dan & Patel, Vikram & Saxena, Shekhar, 2013. "Mental Illness and Unhappiness," IZA Discussion Papers 7620, Institute for the Study of Labor (IZA).
  3. Richard Layard, 2010. "The Greatest Happiness Principle: Its Time Has Come," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 8(4), pages 26-31, 01.
  4. David M. Clark & Richard Layard & Rachel Smithies, 2008. "Improving Access to Psychological Therapy: Initial Evaluation of the Two Demonstration Sites," CEP Discussion Papers dp0897, Centre for Economic Performance, LSE.
  5. Richard Layard & Dan Chisholm & Vikram Patel & Shekhar Saxena, 2013. "Mental Illness and Unhappiness," SOEPpapers on Multidisciplinary Panel Data Research 600, DIW Berlin, The German Socio-Economic Panel (SOEP).

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