Summary: Psychiatric diagnoses and medication use have risen sharply in the United States, raising concerns about overdiagnosis and overprescription. Expanded diagnostic criteria and reimbursement incentives are likely contributing to these trends. A recent US Department of Health and Human Services (HHS) initiative—which promotes informed consent, regular reassessment of psychiatric medications, and support for tapering patients off unnecessary drugs—is a step in the right direction, but reducing unnecessary medication use may require broader reforms to the policies and financial structures that shape mental-health care.
Health Secretary Robert F. Kennedy Jr. announced an initiative last week to reduce the overprescribing of psychiatric medications, especially among children. In what’s being called a national mental-health crisis, psychiatric diagnoses in almost every category are reaching all-time highs. The Centers for Disease Control and Prevention reports that autism now appears in 1 in 31 children, a 381% increase since 2000. Childhood attention-deficit/hyperactivity disorder diagnoses nearly doubled between 1997 and 2022. Childhood anxiety diagnoses rose 54% between 2016 and 2022. Past-year prevalence of any mental illness among adults reached 23.1% in 2022, with young adults at 36.2%.
But much of the supposed surge in mental illness can be explained by a broadening of the American Psychiatric Association’s diagnostic criteria in recent decades and financial incentives for diagnosing more. The Mental Health Parity and Addiction Equity Act of 2008, extended by the Affordable Care Act in 2010, required health plans to cover mental-health services at parity with medical and surgical care. That addressed a genuine inequity in coverage, but made it so clinicians are paid more when they diagnose more cases.
The result is what economists call supplier-induced demand. Ideally, increased spending on mental-health care would yield better mental-health outcomes. Instead we have seen the opposite. Between 2000 and 2021, mental-health care spending in the U.S. more than tripled, from $40 billion to $140 billion, while mental-illness rates grew almost as dramatically.
Defenders of mental-health parity argue that spending and diagnoses are rising to meet previously unmet needs. But psychiatry is more subjective than other branches of medicine. No objective cutoff distinguishes ordinary worry from clinical anxiety, or grief from clinical depression. Findings are prone to distortion under the influence of nonpsychiatric factors.
When the National Institute of Mental Health says that half of all American adolescents have experienced mental illness, that isn’t psychiatry advancing as a field. It’s the result of various incentives for pathologizing ordinary struggle.
Wasteful spending and panic over a possibly nonexistent mental-health crisis would be bad enough. But psychiatric overdiagnosis creates an even more serious problem: overmedication. Roughly 1 in 6 American adults, an estimated 44 million people, are now on antidepressants. In young adults, those numbers are even higher. Thirty percent of college students take psychiatric medication, up from 9% in 2007.
For adults with mental conditions resistant to therapy, psychiatric medication can be effective. But we don’t understand the long-term consequences of many psychiatric drugs, particularly on young brains. We are running a large uncontrolled experiment on the developing brains of millions of young people, and we won’t know the full results for decades.
Meanwhile, the reimbursement architecture makes overmedication practically inevitable. Once a patient is on a drug, side effects are often addressed with a second drug rather than with a reassessment of the first. Clinicians call this the “prescribing cascade”: An antidepressant causes insomnia, so a sleep aid is added; a stimulant causes irritability, so a mood stabilizer follows. Each new prescription generates a billable visit, while tapering a patient off an ineffective drug takes time, monitoring and follow-up, which the billing system frequently doesn’t reimburse. Adding a prescription is the fastest, most reimbursable response at every stage of care.
The new HHS initiative rightly recognizes the harms of overprescription and the potential for negative side effects from long-term psychiatric medication in young people. It includes new reimbursement for clinicians who help patients taper off drugs, a “Dear Colleague” letter urging informed consent and regular reassessment, and a technical expert panel to develop formal tapering guidelines this summer.
These are sensible steps, but they don’t address the root cause. The fundamental problem is that federal law created an incentive structure that makes psychiatric medication the default for tens of millions of Americans who might be better served by therapy, lifestyle intervention or no clinical intervention at all.
To get physicians to stop overprescribing, the institutions that shape their choices should offer a greater reward for prescribing sparingly. In addition to new billing codes for deprescribing, what’s needed is a serious examination of whether the coverage mandates and reimbursement structures the ACA put in place are producing the outcomes they promised.
The mental-health system has improved over the past half-century. Effective treatments are more widely available, and people are more willing than ever to seek help. But the same mandates that have increased access to mental-health care have made overdiagnosis and overmedication the path of least resistance for a generation of clinicians and patients.
This article was originally published at the Wall Street Journal on 5/10/2026.