Agency relationships in psychotherapy: An economic analysis

Abstract

This paper takes the economist's point of view for explaining why psychotherapy seems to be a particulary difficult discipline and what could be done about it. Whereas the so-called agency relationship (i.e. a specialized agent acting on behalf of an uniformed client) can be counted upon to resolve some of the problems in somatic care, it risks to fail in psychic care because the client frequently expresses inconsistent preferences. For this reason, family members and general practioners may serve as comparatively good agents in ambulatory care, while in the inpatient segment of psychotherapy, patient-oriented objectives tend to be thwarted. An important condition for agency relationships to perform well, however, is that the client carry a sufficient ‘price tag’, implying that his treatment contributes to the economic objectives of the agent in charge. The conclusion of agency relationships, even if resulting in seemingly wasteful parallel treatment, gives rise to competition between agents for patients and thus may serve as one of the best safeguards of patients' interests in psychotherapy.