The Coronavirus has spun us into unprecedented times. Every business is scrambling to stay alive. And in the psychotherapy world, that means practices have rapidly converted most clients to telemedicine therapy or phone therapy. It’s working. The doors are open, and payments are continuing. And now practice owners and managers face a new challenge. Some are wondering if massive unemployment will kill psychotherapy. Here is what we know.
The US economy has never had such massive layoffs in such a short time
The early data is startling. For example, see some recent headlines highlighting some dramatic unemployment events:
- US payrolls plunge 701,000 in March amid the start of a job market collapse, CNBC, April 3, 2020
- The Unemployment Rate Is Probably Around 13 Percent: It’s almost certainly at its highest level since the Great Depression. New York Times, April 3, 2020
- US employers shed 701,000 jobs in March, unemployment jumped to 4.4%, as coronavirus ravages economy: “It was the first decline in payrolls since September 2010, and the steepest since March 2009, in the midst of the Great Recession.” Fox Business, April 3, 2020
The data are changing so rapidly that no one is able to keep up. Here is a dramatic quote made less than a week after the headline above.
Janet L. Yellen, one of the world’s top economists, said the U.S. unemployment rate has jumped to at least 12 or 13 percent already, the worst level of joblessness the nation has seen since the Great Depression.Heather Long and Andrew Van Dam. “6.6 million Americans filed for unemployment last week, bringing the pandemic total to over 17 million.” The Washington Post. April 9, 2020.
What does this mean for mental health practice?
Alongside these economic headlines are additional ones about mental health. Here is a recent sample:
- Experts warn of mental health fallout from mass US unemployment. The Guardian, April 3, 2020.
- Coronavirus is harming the mental health of tens of millions of people in U.S., new poll finds. Washington Post, April 2, 2020.
- Indiana sees ‘alarming’ spike in mental health, addiction issues amid coronavirus, Indianapolis Star, April 3, 2020.
There is no doubt that the rapid changes in our work and personal routines are putting pressure on everyone’s lives. One thing is for sure; this increasing stress that will affect everyone’s mental and relational health. We already see it in therapists’ daily conversations with clients. Everyone is increasingly stressed, and the stress is wearing all of us down.
How to interpret these contradictory trends?
We know from previous experience that as unemployment goes up, fewer people have health insurance coverage for psychotherapy. Fewer people with coverage is terrible for psychotherapy practices. Clients’ need for therapy continues, but if they lose insurance many will stop therapy. From this vantage point, high unemployment rates threaten psychotherapy. From here, we might even fear they will kill psychotherapy.
And yet, demand for what we do will continue to increase. Indeed, this is especially true as the economic and disruptive effects of the Coronavirus linger on. And no one doubts that the longer these stresses continue, the greater the effects on our mental and relational health. So from this vantage point, high unemployment rates would seem to increase the demand for mental health services. And from here, it doesn’t seem that unemployment will kill psychotherapy at all.
Have we seen this pattern before?
No doubt this is a unique time. However, there have been times in the past with some similar features. For example, during the Great Recession of 2008 we had a similar pattern—massive layoffs, which increased mental health and relational stresses. How did mental health practices fair then?
During the time of the Great Recession, my practice had about 20 clinicians. Like everyone, we were worried about how our business would fare. We found several effects:
- The layoffs did cause some clients to drop out of therapy who had a need.
- We also saw many begin therapy, at least partly because of the increased economic stress.
- These two trends countered each other and were nearly equal in size. That is to say, we lost and gained about the same number of clients.
In 2018 I wrote a longer piece called How mental health businesses weathered the health care storms about several challenges to mental health practice. The Great Recession of 2008 was one of these. We survived them all. Furthermore, ten years after the Great Recession we had doubled in size to 40 clinicians. The recession was challenging, but in the long run it certainly did not hold us back.
Rather, my experience with the Great Recession makes me confident in our future. Yes, the economic upsets will leak into our conversations in therapy. But this is what happens in every crisis. Societal stresses always work their way into our clients’ lives in specific ways. And then we hear about those personal details in therapy.
So will unemployment kill psychotherapy this time around?
Several factors give me hope for the future of mental health practice. First, the demand for mental health services will not diminish any time soon. In truth, it is more likely that the need for mental health services will go up.
Second, society is increasingly aware of the importance of mental health services. The many news articles on how the Coronavirus/COVID-19 is affecting our mental health is just one indicator of the reduction of the stigma around mental health treatment. Increasingly, our society pays attention to how economic distress impacts mental health.
Third, our political classes are more sensitive than ever to the need to support the unemployed, even if only to secure their votes. Recently we saw the most rapid bipartisan legislative effort I can remember. The CARES Act is an attempt to help the unemployed, at least temporarily. I think that may help us with the unemployed too. (Here is one summary of the act from Forbes Magazine.)
Fourth, the Coronavirus crisis has triggered a nearly miraculous effort by insurance companies to reimburse for teletherapy and telemedicine. In many cases, insurance is temporarily paying for teletherapy at the same rates as for face-to-face therapy. Insurance support for teletherapy is very new. (I think we owe a huge thanks to all the teletherapy pioneers who built the infrastructure and policies that paved the way for this possibility. We love you as never before.)
Bottom line? We are very much in demand
Put all these factors together—the high need for our work plus the social, political, and insurance company support—and you can see why I am optimistic about mental health practices. We will weather this storm as we have so many before.
I do not see high unemployment rates killing psychotherapy now or ever.