Therapy Versus Income: Their Comparative Effects on "Happiness"

If your organization is looking at increasing its private pay services, a new study, “Money or Mental Health: The Cost of Alleviating Psychological Distress With Monetary Compensation Versus Psychological Therapy” published in Economics Policy and Law and summarized in Science Daily’s "Psychological Therapy 32 Times More Cost Effective at Increasing Happiness Than Money" provides some powerful ammunition. The study found that four months of therapy increased "happiness" (as defined by the researchers Christopher J. Boyce and Alex M. Wood at the universities of Warwick and Manchester) as much as a $40,000 raise. The researchers concluded that "The research therefore demonstrates that psychological therapy could be 32 times more cost effective at making you happy than simply obtaining more money."

Despite the happy news for psychotherapy practices and the many vagaries of calculating well-being and happiness, the study speaks to the struggle of government policymakers in determining the 'relative value' of funding health services. "The researchers further draw on two striking pieces of independent evidence to illustrate their point—over the last 50 years developed countries have not seen any increases to national happiness in spite of huge economic gains. Mental health on the other hand appears to be deteriorating worldwide. The researchers argue that resources should be directed towards the things that have the best chance of improving the health and happiness of our nations—investment in mental health care by increasing the access and availability of psychological therapy could be a more effective way of improving national well-being than the pursuit of income growth."

These cost-benefit analyses, in health care analyzed through the lens of comparative effectiveness, will become more frequent as we have more data available through inoperable EMRs and there is greater pressure to reduce health care costs.