Last Friday, the Trump administration quietly moved a little closer to granting temporary relief from Obamacare. That action is not useless, but it does appear to signal a wasted opportunity.

The administration is preparing a regulation to change how the federal government interprets the law governing so-called “short-term limited duration insurance,” or STLDI. Only a few million people enroll in STLDI plans. The market has outsized importance, however, because it is one of only two kinds of health insurance that are exempt from Obamacare’s costliest health insurance regulations, the other being health insurance in US territories. Unlike territorial plans, STLDI is exempt from both Obamacare and nearly all other federal health insurance regulations. That is why STLDI plans can offer comprehensive health insurance to many or most Obamacare enrollees at premiums 60 percent (Congressional Budget Office) to 66 percent (Kaiser Family Foundation) below the lowest-price Obamacare plans. 

Trump’s greatest health care victory was a 2018 regulation that provided relief from Obamacare by adding consumer protections to these plans. In 2016, President Obama tried to force reluctant consumers into overpriced, low-quality Obamacare plans by arbitrarily limiting STLDI plans to three months. The Obama rule tossed patients out of their coverage after they got sick, leaving them with nothing. In 2018, Trump clarified that it was perfectly consistent with federal law for STLDI contracts to last 12 months, for insurers to renew the initial contract for up to 24 additional months, and for insurers to issue separate renewal guarantees—so that when consumers reached the 36-month limit, they could enroll in a new STLDI plan at healthy-person premiums, even if they had fallen seriously ill. Trump clarified, and two federal courts affirmed, that federal law effectively leaves this market enough freedom to offer consumers long-term health insurance protection. 

The Trump rule was a success. Premiums for comprehensive coverage fell. Consumers could purchase health insurance free from Obamacare’s quality-reducing regulations. Obamacare premiums did not spike and enrollment did not fall, as critics predicted. Instead, while the Trump rule was in place from 2018 to 2024, Obamacare premiums stabilized and enrollment increased. 

I don’t think the rule caused either development. But neither did it produce the dire consequences critics feared.

Nevertheless, in 2024, President Biden rescinded the Trump rule. Like Obama, Biden wanted to force reluctant consumers into overpriced, low-quality Obamacare plans. He limited STLDI plans to four-month contracts and prohibited all renewals—federal court rulings notwithstanding.

The only flaw in the Trump rule is that it was not permanent. While it clarified that insurers were free to offer renewal guarantees, the fact that it came from administrative rulemaking rather than legislation meant that the next president could take that freedom away at the stroke of an autopen. So insurers did not have sufficient incentive to invest in renewal guarantees.

For months, the Trump administration has been debating how to promote health insurance affordability. On one side are those who support a regulation-only strategy by which the administration reissues the 2018 rule, even though the new rule may last as little as two years. This side is apparently unaware that tremendous gains in freedom and affordability would come from codifying the Trump rule, that they are sitting on a winning messaging strategy, and that experience with the Trump rule has already negated critics’ fearmongering. The savvier side of this debate advocates for a legislative strategy by which Trump pushes Congress to make his greatest health care victory permanent and pursues regulation only as a backup. Trump himself appeared to be on that side of the debate:

Unfortunately, the regulation-only side appears to be winning. The president’s Great Health Care Plan doesn’t mention STLDI, much less demand that Congress codify the Trump rule. I have seen no indication from the administration that it plans to push Congress to do its job. 

It is a tremendous waste of an opportunity. The administration can reissue the 2018 rule. It can even improve on that rule. But any relief it provides would disappear with the next Democratic administration. 

President Trump needs to push legislators to legislate. I’ve already provided the arguments, data, talking points, polling, poster child, graphs, and legislative language the administration needs.

People are still struggling under the high cost of Obamacare. They need permanent relief.

In a recent Cato blog post, I discussed several factors that may be contributing to the current and welcome drop in overdose deaths. I wrote:

“None of the most plausible explanations for the decline in overdose deaths involves intensifying the drug war. If anything, the evidence points toward lower-risk patterns of drug use, harm reduction, naloxone access, and behavioral adaptation in response to an increasingly dangerous illicit market.”

One possible contributor I did not discuss is a temporary fentanyl supply shock. In an excellent paper published earlier this year in Science, Kasey Vangelov and colleagues present evidence that disruptions in the illicit fentanyl supply may have contributed to the decline in overdose deaths that began in mid-2023. 

The Fentanyl Supply Shock Hypothesis

Vangelov et al. make an important point. Changes in fentanyl purity and availability could well be contributing to the decline in overdose deaths. However, I think the authors may place too much emphasis on Chinese precursor controls and too little on illicit drug markets’ ability to adapt to supply disruptions.

The authors point to several indicators suggesting that the illicit fentanyl market experienced a significant supply disruption beginning in mid-2023. They note declines in fentanyl purity, reductions in fentanyl seizures, and a surge in online discussions among drug users reporting fentanyl shortages. Because overdose deaths began falling around the same time in both the United States and Canada, they speculate that increased Chinese enforcement against manufacturers and exporters of fentanyl precursor chemicals may have disrupted fentanyl production throughout North America.

One would expect this to be only a temporary phenomenon, as precursor production in other countries will increase to meet demand. Vangelov et al. might be overemphasizing China’s role in supplying fentanyl precursors. As I wrote here in 2024:

“The Times reported that Trump believes China can do a better job stopping the flow of Chinese-made fentanyl precursors to the transnational drug cartels located in Mexico, where they synthesize fentanyl in underground labs. But fentanyl precursors also come from India, Myanmar, and other parts of Southeast Asia. If China cracks down on domestic precursor labs, that means increased business for dealers in those countries. Waging a war on drugs is like playing a game of whack-a-mole.”

The authors acknowledge that traffickers adapt to supply disruptions but do not consider the possibility that producers may respond by shifting to synthetic opioids that rely on different chemical pathways and precursor materials. Benzimidazole opioids such as nitazenes are already appearing with increasing frequency in toxicology reports, and other novel synthetic opioids may follow. A disruption in fentanyl production does not necessarily translate into a lasting reduction in the availability of potent synthetic opioids.

A Longer-Term Perspective

After reading my recent post on the decline in overdose deaths, Donald S. Burke, MD, Professor and Dean Emeritus of the University of Pittsburgh School of Public Health and a co-author of the landmark study showing that overdose mortality has followed a remarkably stable exponential growth trajectory since at least the late 1970s, wrote to say that he found my analysis broadly consistent with his own thinking on the subject. He also drew my attention to a forthcoming commentary that he co-authored with Hawre Jalal in the International Journal of Drug Policy, titled “Long-term Perspective on the Recent Abrupt Decline in Drug Overdose Mortality.”

The paper, currently in press, directly responds to the Vangelov analysis. Notably, Burke and Jalal do not rule out the possibility that a fentanyl supply shock contributed to the decline in overdose deaths. Rather, they argue that the supply-shock explanation captures only part of a much larger story.

Burke and Jalal argue that the recent decline should be understood in the broader context of the overdose epidemic’s long-term trajectory. In their view, overdose deaths during the COVID era were a temporary departure from that trajectory, driven by social disruption, changes in treatment access, labor-market volatility, income shocks, and other pandemic-related factors. As those forces receded, overdose mortality would be expected to return toward its historical trend. They also raise the possibility of “mortality displacement”—the idea that the pandemic accelerated overdose deaths among the most vulnerable, leaving a temporarily smaller population at highest risk. As Burke put it in his email to me, the excess overdose deaths during the pandemic may have consumed some of the “fuel for the fire.” Under that interpretation, the recent decline may reflect a correction after the pandemic-era surge rather than evidence of a lasting break from the epidemic’s underlying dynamics.

The mortality displacement hypothesis also aligns with an observation by my frequent co-author, Josh Bloom, Director of Chemical and Pharmaceutical Science at the American Council on Science and Health. Bloom has wondered whether the pandemic-era surge in overdoses substantially reduced the population of active drug users, while younger cohorts have not replenished that population at historical rates. Gen Z reports lower rates of alcohol, tobacco, and many forms of drug use than previous generations. If that demographic shift is occurring, it could help explain part of the recent decline in overdose deaths and further suggest that no single explanation fully accounts for the trend.

Vangelov and colleagues have identified a plausible factor behind the recent decline in overdose deaths. Burke and Jalal suggest that the decline may also reflect the unwinding of pandemic-era distortions and the effects of mortality displacement. They also point to a broader set of contributing factors, including wider naloxone availability, harm reduction efforts, lower-risk patterns of drug use, and behavioral adaptation to an increasingly dangerous illicit market.

The encouraging news is that overdose deaths have fallen substantially. The less encouraging news is that no one can say with confidence whether the decline will continue. If Burke and Jalal are correct, overdose mortality could eventually return to its historical trajectory. If Vangelov and colleagues are correct, illicit drug markets may adapt to current supply constraints by sourcing new precursors or shifting to other synthetic opioids.

For now, the evidence points to a more complex story than either a drug-war success narrative or any single-cause explanation can capture. The recent decline likely reflects the interaction of several forces rather than a single dominant cause. Changes in drug markets, drug-use behavior, harm reduction, treatment access, naloxone availability, and the lingering effects of the pandemic all appear to be contributing factors. Assertions that intensified drug-war enforcement deserves substantial credit for the decline remain unsupported by the available evidence.

To address physician shortages and help make health care more affordable, many states have enacted laws granting provisional licenses to international medical graduates (IMGs) who have been licensed and practicing in their country of origin, have legally emigrated to the US, and have an offer to join a medical practice or a local medical clinic. 

These laws allow IMGs to practice without requiring them to repeat their postgraduate (residency) training in a US program accredited by the Accreditation Council on Graduate Medical Education (ACGME), to which most state licensing boards grant near-monopoly accrediting authority. After a period of practice and after passing all three steps of the US Medical Licensing Exam (USMLE), the provisional licenses become unrestricted, allowing the physician to practice throughout the state and provide services to all residents. 

Tennessee was the first state to enact such a law in 2023. As of this writing, the Federation of State Medical Boards (FSMB) reports that 23 states, along with Guam and the Northern Mariana Islands, have enacted similar laws. California now appears poised to become the 24th state, as the California Assembly passed the California Physician Expansion Act (AB 2386) and sent it to the state senate.

California’s Mexico Physician Program

California’s earlier Mexico physician program helped set a precedent for allowing experienced internationally trained health professionals to practice without having to repeat the full US residency requirement.

California created the Licensed Physicians and Dentists from Mexico Pilot Program in 2002 through AB 1045 to help expand access to health services in underserved communities. The program allowed a limited number of physicians and dentists licensed in Mexico to practice at California community clinics without having to repeat postgraduate training in domestically accredited residency programs. Instead, participants could receive three-year nonrenewable provisional licenses, rather than permanent California licensure. In 2024, California revised and expanded the program through AB 2860, modernizing language-testing and training requirements while preserving the program’s limited-duration licensing structure. A useful overview is available from UC Davis Health.

The California Physician Expansion Act

The California Physician Expansion Act builds on California’s earlier Mexico physician program by expanding eligibility beyond Mexico to internationally trained physicians worldwide who have completed postgraduate medical training and practiced in good standing abroad. Like the earlier Mexico program, the bill would allow qualified physicians to practice in California without repeating residency training in domestically accredited programs. 

Unlike the original pilot, however, the California Physician Expansion Act would also provide a pathway to unrestricted California licensure after a period of supervised practice, aligning California with the 23 other states identified by the Federation of State Medical Boards that have adopted similar licensure pathways for internationally trained physicians. While the bill expands the earlier Mexico physician program into a broader pathway for internationally trained physicians, it does not create a comparable provisional licensing pathway for internationally trained dentists.

Opposition to IMG Licensing Reform

Not all states have embraced these reforms as readily. In several states, proposals to create alternative licensing pathways for internationally trained physicians have faced resistance from entrenched physician organizations and lawmakers wary of expanding competition from “foreign doctors.” Groups such as the American Medical Association have argued that internationally trained physicians should still complete traditional US residency training, often citing concerns about patient safety, quality of care, and the need for adequate supervision. Critics of reform have instead favored expanding taxpayer support for domestic medical schools and graduate medical education by adding Medicare-funded residency positions rather than reducing licensing barriers for physicians already trained abroad. At times, opposition has also intersected with broader anti-immigration sentiment in debates over internationally trained physicians.

Patient Choice and Medical Licensing

Yet beneath many of these objections lies a more fundamental issue: whether lawmakers and incumbent professional organizations should decide which qualified clinicians autonomous adults may consult for medical advice and treatment. As I explain in Your Body, Your Health Care, patients routinely make individualized risk-benefit decisions throughout health care. Restrictive licensing laws prevent patients from choosing experienced, internationally trained physicians who have already completed postgraduate training abroad and are willing to serve communities facing physician shortages. In this respect, some opponents of provisional licensing reforms appear less interested in protecting patients from harm than in using the legislative process to shield incumbent practitioners from competition and limit patients’ choices.

California’s experience with its Mexico physician program has already shown that experienced internationally trained clinicians can safely help expand access to care in underserved communities without repeating years of redundant training. At a time when patients across California face growing physician scarcity, long wait times, and rising health care costs, the California Physician Expansion Act offers policymakers an opportunity to expand patient choice and improve access to care while preserving supervision, testing, and accountability requirements. The bill also recognizes that competent physicians do not become unqualified simply because they completed their training outside the United States. 

Patients benefit when lawmakers remove unnecessary barriers between people seeking care and qualified professionals willing to provide it.

The Centers for Disease Control and Prevention (CDC) recently reported that overdose deaths during the 12-month period ending in December 2025 declined by 13.9 percent compared to the previous year, reaching a total of 69,973, the overwhelming majority of which were due to fentanyl. While a drop in overdose deaths is welcome news, it is important to keep in mind that the total number of overdose deaths for the year ending in December 2019 was 70,630. Researchers at the University of Pittsburgh found that the pre-pandemic trend line had grown exponentially since the late 1970s before the COVID pandemic disrupted that trend with spikes in overdose deaths, substance use, and suicide rates. The new numbers may signal a return to that trend.

Younger Americans Are Using Fewer Drugs

Another factor that may be contributing to the decline in overdose deaths is that younger Americans appear to be using many psychoactive substances less than previous generations. Federally funded surveys, such as the Monitoring the Future survey, have documented substantial long-term declines in adolescent cigarette smoking, alcohol use, and many illicit drugs, while CDC Youth Risk Behavior Survey data show major reductions in teen alcohol use and cigarette smoking over the past two decades. Even youth vaping rates have fallen from their 2019 peak, according to the FDA/CDC National Youth Tobacco Survey. 

Researchers increasingly describe Gen Z as engaging in less risk-taking behavior overall than earlier cohorts, including less drinking, smoking, and drug use. While this trend alone probably does not fully explain the recent decline in overdose deaths, particularly since most fatal overdoses occur among adults in their 30s to 50s, it may reduce the number of younger people who progress into the highest-risk patterns of substance use associated with overdose mortality.

As pandemic-era supply chain and transportation disruptions eased, illicit drug markets also have become more diversified. During the pandemic, fentanyl largely displaced heroin in many regions of the country. More recently, some researchers and harm-reduction workers have reported signs that heroin availability has modestly rebounded in certain markets. Because heroin is less potent and generally longer-acting than fentanyl, some opioid users who developed tolerance to fentanyl may prefer heroin when it is available, potentially reducing exposure to the highly concentrated fentanyl products that drove record overdose deaths during the pandemic.

Smoking Instead of Injecting

Another possible contributor has received far less media attention: more drug users appear to be smoking drugs rather than injecting them.

There is a growing body of evidence suggesting that part of the recent decline in US overdose deaths may reflect a shift in routes of drug administration away from injection and toward smoking, particularly with fentanyl. Researchers and harm-reduction experts caution against overstating the effect, because smoking fentanyl can still be highly dangerous and potentially fatal. Yet several studies suggest smoking may carry a lower overdose risk than injection. 

A CDC study found that by 2022, smoking had overtaken injection as the most commonly documented route of drug use in overdose deaths, while injection-related overdose deaths declined. A 2024 study published in the International Journal of Drug Policy reported that people who inject fentanyl face a higher risk of nonfatal overdose than people who primarily smoke it. Researchers studying users in San Francisco likewise found that many who transitioned from injecting heroin to smoking fentanyl described smoking as producing a more gradual effect rather than the rapid “bolus” effect associated with injection, potentially lowering overdose risk. Their findings were published in the journal Drug and Alcohol Dependence. A recent STAT News report noted that many experts view this transition from injecting to smoking as “a promising development that could help extend the decline in deaths.” Harm-reduction organizations similarly acknowledge that while smoking fentanyl remains dangerous, injecting “carries the highest risk for overdose.” 

Evidence also suggests this shift toward smoking has become increasingly common nationwide. A 2024 study examining treatment admissions nationwide found that injection of heroin and synthetic opioids has declined while smoking has steadily increased, with Arizona among the states showing especially high smoking rates. That study appeared in the International Journal of Drug Policy. The director of an Arizona harm reduction organization described similar trends during my 2024 interview.

Europe’s Harm Reduction Advantage

Smoking heroin and other opioids has long been more common in the UK and much of Europe than in the US, where injection has become far more entrenched. The European Union Drugs Agency reports that injection has steadily declined across Europe for years, while smoking and inhalation have become increasingly common routes of administration. Some researchers believe this difference may partially explain why overdose death rates in many European countries historically have remained lower than in the US. The European Union Drugs Agency notes that facilities serving people who inhale drugs report fewer emergency incidents than those serving people who inject.

But the route of administration is only part of the story. European countries have also embraced harm-reduction strategies far more aggressively than the US for decades, including syringe services programs, heroin maintenance programs, supervised consumption sites (also called “overdose prevention centers”), and widespread methadone treatment. Those policies likely play a much larger role in explaining the longstanding overdose mortality gap between the US and many European countries.

In recent years, federal and state public health institutions have begun to embrace harm-reduction strategies as well. Many states have reformed their drug paraphernalia laws to permit the sale and distribution of fentanyl test strips. Some have authorized overdose prevention centers despite their federal prohibition. The Food and Drug Administration (FDA) has allowed pharmacies to sell the nasal-spray version of the overdose antidote naloxone over the counter, and harm reduction organizations have widely distributed it in both nasal-spray and injectable forms to a drug-using population that is far more aware of the presence and potency of powerful synthetic drugs than it was when fentanyl first began infiltrating the illicit drug supply roughly 15 years ago. While it is difficult to quantify their precise impact, these harm-reduction measures almost certainly contribute to the recent decline in overdose deaths.

What Isn’t Driving the Decline

None of the most plausible explanations for the decline in overdose deaths involves intensifying the drug war. If anything, the evidence points toward lower-risk patterns of drug use, harm reduction, naloxone access, and behavioral adaptation in response to an increasingly dangerous illicit market. One factor that clearly has not contributed to the decline in overdose deaths is the extrajudicial killing of people operating small speedboats off the coast of South America by US warplanes, begun last September, based on suspicions of cocaine trafficking. 

Washington will almost certainly try to claim credit for the decline in overdose deaths. But nothing in the evidence suggests that bombing suspected traffickers, intensifying interdiction, or escalating prohibition deserves the credit. If bombing traffickers and escalating interdiction were meaningfully reducing supply, illicit drug prices should be rising. Instead, black markets continue to deliver cheaper, more potent, and more easily transported substances. After more than 50 years of failure, the drug war remains far better at generating black markets than saving lives.

Suppose Congress funds Social Security entirely by taxing the wealthy, who would never spend money in a casino. Then Congress gives that money to people who frequent casinos. Obviously, the enrollees who receive that money are receiving a subsidy.

Do the casinos receive a subsidy? If those transfers raise the incomes of casinos, we must answer yes: casinos are receiving an indirect but very real subsidy.

Some factors complicate the analysis. The additional money comes to the casinos not directly from the government, but via intermediaries (the enrollees). Also, it’s not just a handout: to receive the additional money, casinos must provide enrollees with something they value. Even so, the government is redistributing income in a manner that raises the incomes (producer surplus) of casinos.

Other factors clarify the issue. If the casinos are lobbying to preserve and expand Social Security, it indicates they know they are receiving a subsidy. If those transfers were not increasing the casinos’ incomes, they wouldn’t bother.

Suppose the government instead writes checks directly to casinos, such that casinos are the only way enrollees can receive this particular subsidy. That would further clarify the issue. Not only would the government be redistributing income in a manner that raises the incomes of casinos, but it would also be sending money directly to them.

If this change alters the enrollees’ incentives, casinos could receive even larger subsidies. If an in-kind subsidy to enrollees made them less price-sensitive, the quantity and prices of casino services would rise (e.g., “return to player” ratios could fall).

Also, the casinos are far more likely to lobby to preserve and expand these subsidies.

Suppose, finally, as often occurs with in-kind subsidies, the subsidies for card games end up being more lucrative than those for other casino services. The casinos respond by hiring dealers and adding card tables to capture more of those subsidies.

But when dealers launch their own card-game-only casinos, the incumbent casinos complain. They claim that people trust dealers more than casinos, which enables dealers to refer easy marks to their own dealer-owned casinos while sending card sharps to general casinos. They get Congress to prohibit government payments to DOCs.

The dealers go berserk. Even though dealers can still open their own casinos, they accuse Congress of banning DOCs. They demand that Congress change the law.

Are the DOCs subsidy-seeking? Again, we must answer yes.

Their own behavior reveals it. They want to limit their DOCs to card games because implicit government subsidies make those games unusually profitable.

Again, the lobbying clarifies the issue. The DOCs are lobbying to change the law for the same reason the incumbent casinos are lobbying against changing it: there’s subsidies in them thar hills, and each side wants to capture them.

That is the physician-owned hospitals’ issue in a nutshell.

President Trump’s proposal to treat employer-paid fertility treatments as a “limited excepted benefit” is good, to the extent it would exempt those arrangements from various federal regulations. Under the proposal, large employers could, for example, offer fertility-treatment coverage with higher cost-sharing and lower annual and lifetime coverage limits than federal law otherwise allows. Employers would therefore have more flexibility to offer the treatments workers prefer, often at a lower premium.

At the same time, the proposal doesn’t exactly give workers more control over their lives or health care. Congress creates federal income and payroll taxes, then excludes income in the form of employer-sponsored health insurance from both. The result is that the government effectively penalizes workers for every dollar of income they don’t (1) let their employer control and (2) spend on health insurance. To the extent the proposed rule would deregulate employer-purchased fertility-treatment coverage, it would allow more such arrangements to qualify for that tax exclusion. For every $1 of tax savings workers enjoy, however, they must sacrifice control of $3 of their earnings to an employer. 

So while this is a deregulatory proposal, and it would result in tax savings for some workers, it’s not much of a win for liberty, consumer sovereignty, or free markets.

Not unrelated to that disappointing conclusion is this gem from the proposed rule:

“… the expansion of pre-tax benefits decreases overall tax receipts, constituting a transfer from the government to individuals and employers.”

That assertion holds only if all income belongs to the government, even income it never collects. If the worker never gives that $1 to the government in the first place, however, it means that a transfer is not taking place between the two. (Yes, the tax code implicitly subsidizes ESI. But the subsidy does not necessarily equal the $1 tax savings; it is an indeterminate portion of the aforementioned $3. Even if implicit subsidy exactly equals the $1 of tax savings, that $1 does not “transfer from the government to individuals and employers.”) 

The rhetoric of “tax expenditures” claims another logical casualty.

Recently, Health and Human Services Secretary Robert F. Kennedy Jr. expressed concern about psychiatric overprescribing, especially among children and adolescents. Critics quickly accused him of oversimplification and of stigmatizing mental illness or undermining psychiatric treatment.

But whatever one thinks of Kennedy’s broader views, his comments raise a legitimate question: why has modern psychiatry become so heavily centered on pharmacotherapy?

Part of the answer may lie in the profession’s evolution—from one historically associated with psychotherapy to one now focused largely on medication management.

From the Couch to Medication Management

For much of the twentieth century, psychiatrists were associated with psychotherapy. The popular image of psychiatry was the physician sitting patiently beside the couch while patients explored trauma, relationships, fears, anxieties, and emotions. 

Today, that model has largely disappeared.

Most psychiatrists no longer provide talk therapy. Instead, they primarily conduct brief medication-management visits focused on prescribing and adjusting psychiatric drugs. Meanwhile, psychotherapy has increasingly migrated to clinical psychologists, licensed counselors, marriage and family therapists, and clinical social workers.

This transformation did not happen simply because psychiatrists suddenly concluded that medications were always superior to therapy. Economics played a major role.

A study published in JAMA Psychiatry found that the proportion of psychiatrists providing psychotherapy declined dramatically over recent decades while pharmacotherapy became the dominant mode of psychiatric practice. Today, fewer than 11 percent of psychiatrists regularly engage in psychotherapy.

It is generally far more lucrative for psychiatrists to bill third-party payers for brief medication-management visits than for hour-long psychotherapy sessions. A psychiatrist can often see three or four patients for medication checks in the time required for one therapy appointment. Insurance reimbursement has increasingly rewarded throughput, coding, and standardized treatment models. Psychotherapy, by contrast, is time-intensive, difficult to standardize, and often reimbursed relatively poorly.

At the same time, psychologists, licensed counselors, and clinical social workers increasingly filled the psychotherapy role, often at lower reimbursement rates than psychiatrists commanded. From an economic standpoint, the labor market naturally evolved toward specialization: nonphysician therapists provided most talk therapy, while psychiatrists became medication managers.

Managed Care and the Economics of Prescribing

Managed care accelerated the shift. As insurers sought to contain costs in the 1980s and 1990s, long-term psychotherapy became harder to sustain financially within insurance networks. Brief medication visits proved far easier to scale, reimburse, and integrate into managed-care systems than hour-long psychotherapy sessions.

Mental health parity laws probably did not cause the transformation of psychiatry into a pharmacotherapy-heavy specialty, but they may have amplified preexisting reimbursement incentives that accelerated it. By expanding insurance coverage for behavioral health services within a system already oriented toward brief, standardized, billable encounters, parity laws likely increased demand for psychiatric services most compatible with managed-care reimbursement structures. Psychiatrists operating within those incentives had strong economic reasons to focus on short medication-management visits, while psychologists, counselors, and clinical social workers increasingly absorbed psychotherapy. In effect, parity expanded the behavioral health marketplace, but the reimbursement system helped determine which forms of care expanded most efficiently.

The pharmaceutical revolution reinforced this trend. As antidepressants, stimulants, anxiolytics, mood stabilizers, and antipsychotics proliferated, psychiatry increasingly shifted toward pharmacologic management of symptoms. Medications offered what insurers, health systems, and administrators value highly: the ability to treat large numbers of patients quickly and efficiently.

How Incentives Reshaped Psychiatry

Psychiatric medications can be immensely beneficial, and for some conditions, they are life-changing. Psychotherapy and pharmacotherapy remain important tools, and reasonable clinicians can disagree about when each approach is most appropriate.

Professions evolve within the systems that finance them. Over time, modern health care increasingly rewarded brief medication-management visits more than time-intensive psychotherapy. A profession reimbursed primarily for prescribing medications will tend to organize itself around prescribing.

Psychotherapy often explores grief, loneliness, trauma, habits, relationships, social circumstances, and existential distress—parts of the human experience that do not easily fit into brief, highly structured medical encounters. Fifteen-minute medication visits inevitably leave less room for those conversations.

Insurance reimbursement increasingly favored brief medication-management visits over time-intensive psychotherapy. Mental health parity laws expanded access to behavioral health services within those same reimbursement structures. Meanwhile, psychologists, counselors, and clinical social workers increasingly assumed the role of psychotherapists, while psychiatrists specialized in prescribing medications.

None of this means psychotherapy has disappeared or that psychiatric medications lack value. Both remain important tools. But over time, the economic architecture of modern health care reshaped the mental health professions.

When a system pays physicians more for prescribing than for talking, psychiatry will naturally become more focused on pharmacotherapy. The evolution of psychiatry reflects a broader truth about medicine: financial incentives shape how providers deliver care and gradually reshape the practice of medicine.

Patients seeking psychotherapy increasingly navigate a system financially skewed toward medication management. Greater reliance on independent counseling practices, direct-pay therapy, peer-support networks, and other alternatives less dependent on insurance could help restore balance and flexibility in mental health care.