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Cost-benefit analysis of psychological therapy

Published online by Cambridge University Press:  26 March 2020

R. Layard ,
D. Clark ,
M. Knapp  and
G. Mayraz
R. Layard*
Affiliation:
Centre for Economic Performance, London School of Economics
D. Clark
Affiliation:
Centre for Economic Performance, London School of Economics
M. Knapp
Affiliation:
Centre for Economic Performance, London School of Economics
G. Mayraz
Affiliation:
Centre for Economic Performance, London School of Economics
*
e-mail: R.Layard@Ise.ac.uk
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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 work. 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 therapy 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 some 8,000 extra psychological therapists withing the NHS over the six years.

Keywords

Depressionanxietycost-benefit analysiscognitive behavioural therapypsychological therapistsH5I1
Type
Articles
Information
National Institute Economic Review , Volume 202 , October 2007 , pp. 90 - 98
Copyright
Copyright © 2007 National Institute of Economic and Social Research

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Footnotes

This study has been funded by the Care Services Improvement Partnership.

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