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01 / 05
The Misdiagnosis of American Mental Health | Podcast Highlights

Blog Post | Mental Health

The Misdiagnosis of American Mental Health | Podcast Highlights

Adam Omary interviews Psychologist Chris Ferguson about American mental health, cognitive biases, and the dangers of narrative overreach.

Listen to the podcast or read the full transcript here.

Before we talk about your book, Catastrophe! How Psychology Explains Why Good People Make Bad Situations Worse, I’d love to talk about your recent excellent article on what people have called the “Loneliness Epidemic.”

Americans are increasingly alone, but are they really lonely?

This idea has been batted around for about a decade, and it was reinforced by the US Surgeon General about two years ago when they released this advisory saying there’s a loneliness epidemic and we’re lonelier than ever.

I was curious to see what the evidence was in support of this idea, and one of the things I noticed was that people kept switching what they were talking about. They would say, “We have a loneliness epidemic. Look over here, we’re spending less time with other people.” But those aren’t exactly the same thing.

We are spending a modestly smaller amount of time with other people. In one of the studies that the Supreme Court had highlighted, it worked out to be about a 1.7 percent decrease over about 20 years, excluding 2020, the Covid year. That seems to be robust, but of course, very modest. On the other hand, that’s not necessarily bad. People can be annoying, so sometimes spending less time around other people can be good. The classic example is that more people are working remotely, and remote work seems to be something a lot of people prefer.

Above all, we just don’t see robust evidence that we actually feel worse because of this modest change in the time we spend with others. So, I think the Surgeon General made a mistake by interpreting a modest decline in time with others as a mental health crisis.

These measures of time spent alone also revolve around physical proximity, literally being in the room with someone. But what about hanging out online? I’m a pretty big geek, and I play Dungeons & Dragons online with friends from around the country. We’re talking, we’re laughing, we’re having a good time, but we’re thousands of miles away from each other. Shouldn’t that count as time spent with others?

You and I met online and are talking in real time, which feels pretty socially fulfilling. I’ve done, at this point, well over 100 podcasts like these and met over 100 people that I’ve not met physically. So, I feel, in some ways, more socially connected than I would have been without this technology. On the other hand, it’s probably true that if none of these online avenues were afforded to me, I would go out and meet more people in person.

Is it a problem that, because meeting our social needs online is more convenient, people choose to do that over meeting people in person?

There are people who really do benefit socially from social media and smartphones because they struggle to meet people in real life. You can think of high-functioning autistic individuals, people with social phobias, or regular old garden-variety introverts. There are also certainly some people who don’t do social media well. Most people are probably somewhere in between, where it’s just frosting on the cake. They’re fine with it, but they would’ve been fine without it, too.

There are a few studies that looked at this and found that time spent on smartphones and time spent on social media do not actually have much impact on real-life relationships. Usually, time spent on social media and on smartphones draws teens and young adults away from television. So television is really the big casualty of the social media age.

Now, fifty years ago, people worried about television drawing people away from real-life relationships. The landline was also the subject of a similar panic 100-plus years ago, but it was about women. There was a sense that women were going to neglect their household duties and find lovers via the telephone. People also worried about the telegraph. And at the beginning of the 19th century, people were worried that young people would spend hours looking into kaleidoscopes and ruin their lives. So, there is a cycle of panic that goes on and on without anybody worrying too much about evidence.

To some degree, this is a perennial problem. People, especially older generations, tend to catastrophize new technology, but new generations eventually adapt to it.

At the same time, we are seeing real trends of worsening mental health, and it seems plausible that, especially in young people, social media could be creating maladaptive patterns. You could imagine that, if someone is raised in a world where online interaction is the default, they might lack the opportunity to build the skills that would allow them to delay gratification and find a healthy balance between screens and in-person life. Do you worry about that?

We have evidence that contradicts that narrative.

First, in most countries that have adopted smartphones and social media, we do not see a pattern of declining youth mental health. It seems to be something very specific to the United States. For various reasons, I think the best metric to track is suicides, because a body is a body, and self-report tends to be rubbish. And in most European countries, and in Japan, Australia, and New Zealand, we don’t see any evidence of a youth mental health crisis. In the United States, there was an increase in youth suicide in the 2010s, but it has now begun to reverse. Maybe it will reverse again, but so far, we’re seeing an improving trend for youth in the United States.

Second, the increase in suicide was actually much worse for middle-aged adults than it was for teens. Everybody’s worried about teenage girls, but a white male from 45 to 55 has roughly a three to five times elevated suicide risk compared to a teenage girl.

It seems to be a generational thing: Gen X was one of the worst generations on record, and if you follow the US trend line in teen suicide, it tracks almost perfectly with the suicide trend for middle-aged adults. We tend to find that the teens who are at the highest risk of suicide are those who have had parents who committed suicide, have substance abuse issues, or have been incarcerated, so the problems we’ve seen with teens in the United States may be downstream of their parents’ mental health problems.

We also have hundreds of studies that look at time spent on social media and mental health. Generally, across this literature, we do not find that time spent on social media or smartphones is predictive of negative mental health outcomes, nor do we find that reducing social media time improves mental health in experimental studies.

What makes the US an outlier for suicide?

Probably a few different things. Part of it is simply that the United States has a sine wave when it comes to suicide. In other words, it constantly goes up and down. We had a peak of suicide in the late ’80s and early ’90s that was as high as the peak around 2017 in the United States.

Nobody really knows why the US has this sine wave of suicide, but changes in media use don’t seem to matter. What you do see is that parent suicide predicts later teen suicide. Political instability or polarization also seems to correlate, as well as income inequality. There were also some changes in education that occurred in the 2010s. For lack of a better word, I’m going to use the term “woke.” I understand it’s a controversial word, but the narrative that the US is racist, sexist, and oppressive seems to correlate with an increase in teen suicides.

My best guess is not that teens are watching the news and picking up on political polarization, but that these all represent general anxieties in society that are affecting the parents, and that trickles down. If your teacher is telling you that the US is racist and sexist and you have no chance of succeeding, and your parent has a fentanyl addiction, you’re getting hit from both sides.

I think the big mistake we made in this whole narrative about teens is that the real anxious generation is their parents. We looked at kids by themselves and didn’t look at their parents and how badly they are doing. It’s like the blind man and the elephant parable; if you only touch one part, you don’t see the larger picture. To the extent that teenagers are struggling, it’s probably because their parents, and to a lesser extent, their teachers, are freaking out. We should have addressed this as a middle-aged adult issue rather than a teen issue.

I’ve been fascinated lately with the role of narrative in mental health. There’s this interesting paradox where you can have stories that are objectively false, but still have real causal outcomes, including something like having a pessimistic take on your own history or identity.

Do you think that children might be more susceptible to those pessimistic narratives?

Yeah. Young kids are going to believe what the authorities tell them. When they hit puberty, they start believing that adults are wrong. So, first off, lessons need to be developmentally appropriate. On the progressive side, messages about race and gender issues were just not developmentally appropriate. You don’t want to tell five-year-olds that their country’s a hellhole or that maybe they’re a boy instead of a girl.

At the same time, you want to tell kids the truth. You could rightly criticize earlier conservative teaching as whitewashing American sins around slavery, segregation, and brutality towards native Americans, but that’s no longer the norm in American teaching. There was an overcorrection that portrays the United States and Europeans as uniquely bad, that slavery was invented by Spaniards and Native Americans before European arrival sat around campfires holding hands and singing Kumbaya. I think you can tell kids that people did bad things throughout history, and all societies have good and bad features. That we’re all human, and deeply flawed. But nobody wants to tell the truth; the truth is complicated.

Speaking of developmentally appropriate narratives, it’s interesting how children’s stories are dramatically oversimplified. There’s a good guy and a bad guy, and everyone’s cheering for the hero. You also talk about how political narratives often simplify things with a similar binary. It’s cognitively demanding to digest nuance.

A lot of this comes down to a cognitive bias called “myside bias,” which is that we are generally more forgiving of individuals that we see as part of our social group and less forgiving of those we see as part of another social group.

Back around 2020, we saw a lot of progressive cancel culture. If you said the wrong thing about a sensitive issue, you could lose your job. Everybody on the right said this was terrible, which was true. You shouldn’t lose your job over a controversial post on your personal social media page. And now, five years later, we have people getting arrested by ICE because they wrote the wrong op-ed in a newspaper and getting canceled for their opinions about Charlie Kirk’s murder. Some of the things people posted were awful and unwise, but there was this reversal where conservatives who criticized cancel culture in 2020 suddenly thought it was the right thing to do today.

Cognitive biases are a perennial problem with human nature, which is, I think, both great news and tragic news. The great news is that society isn’t suddenly crumbling before us; these are problems we’ve overcome before. On the other hand, even highly educated people cherry-pick data and default to tribalism and emotional thinking. It takes not only training, but constant practice to overcome these biases.

I sometimes see my own rational thinking slip into some of these intuitive arguments, though fortunately, I have a network of peers and colleagues who can check me.

Yeah, it’s important to recognize that none of us are perfect, and sometimes the same people who talk about the importance of rational thinking can themselves slip into nonsense. We need to have the humility, both moral and epistemological, to recognize that sometimes we can just be wrong, and there’s no shame in reversing our position if the data shows us that we should.

People also often simply take the positions that they get rewarded for taking. 2020 was a great example. For like six months, everybody was saying “defund the police.” I do some criminal justice research, and I thought I woke up in opposite land, because there’s nothing in criminal justice research that suggests any form of defunding the police is going to be effective. If anything, you want to train them better and attract better talent, which is going to cost more money. Then, a couple of years later, people came forward and quietly said, “Well, I never really thought that was going to work, but I was so scared that if I said anything, I would lose my job or my funding, or I wouldn’t be able to get published.” I’m talking about academics here, but I think it’s true in a broader sense as well.

One thing that stood out to me in your loneliness article is that, oftentimes, technically true claims are spun in a way that packs unwarranted punch.

Let’s talk about the claim from the Surgeon General’s report that we discussed at the beginning, that loneliness has the same adverse health effects as smoking up to 15 cigarettes per day. When you read the original study, they have a categorical measure of smoking. There are people who smoke more than 15 cigarettes per day, and people who smoke less, and it’s technically true that the small adverse effect of loneliness was the same as the effect of cigarettes on people in the low smoking category.

In reality, the bulk of the effect is coming from people in the zero to one-cigarette range, and if you’re smoking 15 cigarettes, statistically, you’re almost identical to the next group up. So, while you’re making a technically true claim, people are going to interpret it as though loneliness causes the same amount of harm as smoking 15 cigarettes a day.

Sadly, as you mentioned, scientists are often incentivized to maximally spin the narrative within the realm of what’s technically true into whatever sells and gets the grant funding.

Yeah, it was a very strange comparison. And while it’s technically true, why compare loneliness to the low smoking group and not the high smoking group? The same person who did that study was the person who wrote the Surgeon General’s advisory. I reached out to her, and she just referred us to her frequently asked questions page. My only possible guess is that she used one to 15 because that was the comparison that sounded best.

You can also technically say that Americans are spending the most time alone that has ever been recorded. But the decrease in time spent with others over the past 20 years was 1.7 percent. So, one version of this story sounds horrible, and the other sounds like not a big deal.

This issue of effect size is a consistent problem with a lot of research in medicine and the social sciences. It’s entirely true that a study can find a statistically significant effect that has no meaning whatsoever in the real world. There’ve been a couple of unpublished studies of cell phone bans in schools that have been hyped as if they provide evidence for these bans, but they don’t, because the effect size is near zero. The actual impact of cell phone bans on student learning is zero. It does not improve student standardized testing scores, grades, or anything else. But when you run 600,000 kids through an analysis, everything is statistically significant. Plucking a hair out of their head once a day could’ve been statistically significant.

We need much greater rigor around this issue of effect sizes, and unfortunately, we are not rigorous either in medicine or in social science around that issue right now.

Despite your book being called Catastrophe, it ends on an optimistic note: once we’re aware of our cognitive biases, we can seek to limit them and prioritize truth seeking. Are there any of these adaptive strategies that we ought to cover?

Yeah. There are two things that I can think of. One is simply that people do listen to data; you just have to be super patient with them. Most people are not going to back down in the middle of an argument and admit they’re wrong, so oftentimes when you’ve persuaded people, you may never find out. So, persuasion can feel very unfruitful and unrewarding. I have had arguments with people where I thought we’d never talk again, but a month later, they came back and said, “I actually thought about what you said, and I agree with some of the points you made.” And then usually you try to reciprocate and say, “Well, you made good points too,” and you eventually find some common ground. So repeating data over and over can work if you are patient and try to look like the more reasonable one in the debate. And you should recognize that you may not get rewarding feedback.

Another thing is the idea of stoicism. I find the research that stoicism is a good aspect of resiliency to be pretty compelling. First off, a lot of Cognitive Behavioral Therapy is essentially trying to teach stoicism: you have this belief, so test it against reality. What are some alternative hypotheses that may explain the same event? What is the evidence you have for each of these? How can you approach this in an intellectual rather than an emotional way?

Over the last 10 years, we’ve told people to do the opposite of that, to immerse themselves in their feelings and explore every nook and cranny of their trauma. I actually find that trying to intellectualize your way through things is related to more positive outcomes. I was just talking about persuasion in the sense of trying to give people data, but on the other side, being able to change our hypotheses about the world and about ourselves in accordance with data is very, very healthy.

Blog Post | Mental Health

Screens Aren’t Destroying Young Minds. I Should Know.

Laws restricting phone use won’t solve root causes of adolescent anxiety.

Summary: Growing concern over smartphones and social media has fueled claims that screens are driving an epidemic of adolescent mental illness. But the scientific evidence for this narrative remains mixed and often overstated, with many studies failing to distinguish correlation from causation or account for underlying social and psychological factors. Loneliness, family instability, social support and resilience appear to be far stronger predictors of youth well-being than screen time alone.


As a member of Gen Z, I have studied the effects of social media on adolescent mental health from a perspective most psychology researchers lack: I grew up under its influence.

Between ages 12 and 17, I was obese, socially isolated and addicted to the fantasy video game RuneScape. I was home-schooled, lived with just my mother and rarely went outside. I logged over 10,000 hours in that game alone, nearly a third of my waking life during those years.

That doesn’t include countless additional hours I spent on other video games, television and, of course, social media. I made friends through online chatrooms and pen pal websites because I had none in real life. I averaged well over 10 hours a day on devices.

If ever there were a case study for the claim that screens destroy young minds, I would seem to fit it. And yet here I am as a 26-year-old developmental psychologist with a doctorate from Harvard. I am in good mental and physical health, with deep friendships online and off.

Maybe I’m the exception. Or maybe the harms are overblown.

Jonathan Haidt’s best-selling book “The Anxious Generation” argues that smartphones and social media have “rewired” childhood and caused an epidemic of mental illness. The book has helped inspire social media restrictions in Australia and several American states, and shaped how a generation of parents thinks about technology.

Restricting screen time and social media access are reasonable aspirations for child-rearing. But as a matter of public policy, the case for regulation rests on a scientific foundation far weaker than its proponents claim.

Haidt’s argument relies on the observation that adolescent mental health indicators worsened around 2010, when smartphones and social media apps popular with young people — such as Instagram and Snapchat — started becoming widespread. But correlation is not causation, and research suggests that some of the supposed mental health crisis is an epidemic of overdiagnosis. Wealthy Western democracies with the highest smartphone adoption rates have also seen expanded access to psychiatric services and a cultural shift toward identifying and labeling psychological distress, as Abigail Shrier argues in her 2024 book “Bad Therapy.”

Meanwhile, youth have been doing better on many other outcomes: less crimeless smokingless drug usefewer teen pregnancies and fewer high school dropouts. If social media were truly “rewiring” the adolescent brain, we would expect the damage to be more consistent than a selective worsening on some measures and improvement on others.

Many studies have reported on how social media use is associated with mental health problems among the young. However, a 2024 analysis in JAMA Pediatricsof 143 studies featuring data from over 1 million adolescents worldwide found that links between social media use and poor mental health among youth were small, inconsistent across studies and drawn mostly from nonclinical community samples.

One reason studies report mixed findings is that many fail to account for factors such as personality traits and social support that independently predict heavy screen use and mental distress. For example, social media use may be associated with anxiety and loneliness, not because it causes them, but because socially anxious individuals are more likely to seek out connections online. Statistically controlling for such factors often accounts for the relationship between social media and mental health.

I am not dismissing the possibility that some children are harmed by some content in some contexts. Many in my generation have had online exposure to graphic, violent and sexual imagery that no child should encounter.But the blanket claim that social media use drives generational mental illness does not align with the evidence.

Screens didn’t cause my problems. They were coping mechanisms for preexisting problems: loneliness, family instability, social anxiety, an absent father. The variables that predict youth mental health are not hours spent on social media but social support, resilience and a sense of belonging. To help struggling adolescents, the evidence points toward strengthening those capacities, not confiscating phones.

During my most isolated years, online connections were the only positive relationships I had. Internet forums helped me navigate college applications and taught me about calorie-counting, which sparked a weight-loss journey that changed my life. Even in RuneScape, I built discipline and goal-setting habits that I later transferred to academics and research.

Concerns about social media are well-intentioned. But sincerity is not proof. The dramatic assertions that children’s lives would be transformed by reducing social media exposure are more akin to moral panics over past technologies and obsessions — from radio to comic books to video games — fueled by weak social science and strong public emotion. In the United States, according to data from the Centers for Disease Control and Prevention, youth mental health has been improving recently, despite no change in access to social media. The simplest explanation might be that social media is not as harmful as people think.

This article was originally published at the Washington Post on 4/12/2026.

Harvard Gazette | Mental Health

Teen, Young Adult Suicides Fall After Crisis Hotline Shifts to Three Digits

“Suicide deaths among young adults and youth declined after a federal agency simplified the phone number for a national crisis hotline and increased resources, a new study says…

Patel, a clinical fellow in surgery at Harvard Medical School and surgical resident at Brigham and Women’s Hospital, said that when researchers first examined figures for all age groups, the lifeline’s potential impact appeared to be slight.

But when they broke down the data, they saw a significant decline among those age 15 to 34 — encompassing the high-risk teenage years — that had been masked by results in other groups.

The researchers noted a decline from both observed suicide deaths in 2022 and from predictions based on a long-term upward trend. In 2010, about 11 suicides per 100,000 were reported in that age group. By 2022, that had risen to nearly 18 per 100,000. Three years after the 988 number went online, however, that had fallen to approximately 15 per 100,000, according to the study…

In addition to the nationwide figures, state-by-state data also shows an association with the establishment of the 988 number.

The 10 states with the largest increases in calls after its establishment — 146.2 percent more — also saw a larger decline in suicide deaths, about 18.2 percent. The 10 states with the lowest call volume increase — about 23.6 percent — saw a lower, 10.6 percent decline.”

From Harvard Gazette.

Blog Post | Mental Health

Psychiatric Overdiagnosis: The Price of Prosperity?

Abundance, loose criteria, and perverse healthcare incentives turned normal struggles into a diagnosable epidemic.

Summary: Rising rates of psychiatric diagnoses in wealthy countries have fueled claims of a growing mental health crisis, but this trend is in large part a byproduct of greater mental health awareness. Subjective psychiatric standards—combined with expanded diagnostic criteria—have blurred the line between normal human struggles and clinical disorders. Healthcare incentives, such as those in the US, often encourage overdiagnosis by rewarding providers for labeling and treating more patients rather than ensuring accurate or necessary care. Overdiagnosis is a problem of prosperity—but preferable to underdiagnosis, and solvable with the right incentives.


According to the World Health Organization, more than 1.1 billion people worldwide are living with a mental disorder. The figure has grown faster than the global population, and the burden falls disproportionately on the world’s wealthiest societies. In the United States, an estimated 49.5 percent of adolescents have met diagnostic criteria for at least one mental disorder at some point in their lifetime. Additionally, about 31 percent of American adults will experience an anxiety disorder at some point in their lives, and 21 percent a mood disorder, according to the National Institutes of Mental Health. 

In Australia, the National Study of Mental Health and Wellbeing found that 21.5 percent of adults over 25 and over 38 percent of young people aged 16 to 24 met criteria for a mental disorder in the previous 12 months. Across OECD nations, one in five adults experiences at least mild depressive symptoms, with over 9 percent of the population reporting clinical depression or anxiety. 

These trends have become perhaps the most common objection to the case for human progress: If life is getting better, why are so many people apparently unhappy? Why are hundreds of millions of people across the most prosperous nations on Earth labeled clinically mentally unwell? 

For one, rising mental health diagnoses may themselves be a sign of progress. Psychiatry as a discipline is barely more than a century old, and it was stigmatized and unscientific throughout most of its history. What we now call mental health problems are, in many cases, what our ancestors called the inevitable vicissitudes of life. When survival demanded hard physical labor from dawn to dusk, there was little room for psychoanalysis. Perhaps only in a world of material abundance, safety, and comfort—where mood swings and relationship conflict represent life’s biggest challenges for many otherwise healthy people—do we begin to treat such adversity not as fate but as a problem to be solved. 

That is not to dismiss the problem entirely. Our survival-evolved brains are navigating environments they were never built for. It was adaptive to be vigilant about threats in one’s local environment; there was no possibility of witnessing every catastrophe on Earth in real time. Social media, sedentary lifestyles, weakened community bonds, and the erosion of traditional sources of meaning all represent genuine evolutionary mismatches that plausibly contribute to psychological distress. 

But at least in the United States, there is strong reason to believe that a less-examined driver of the supposed rise in mental illness is the healthcare financing system itself, which pays more when providers diagnose more.

Psychiatric Overdiagnosis in the United States

Psychiatric diagnoses in the United States are rising across virtually every category, in every age group. According to the National Institutes of Mental Health, more than one in five U.S. adults—59.3 million people—lived with a mental illness in 2022. By these numbers, mental illness is not a rare affliction but a near-universal feature of American life, prompting some, including former US Surgeon General Vivek Murthy, MD, to declare a mental health epidemic.

The rise is evident across specific conditions as well. The Centers for Disease Control and Prevention (CDC) now places autism prevalence at 1 in 31, a 381 percent increase since 2000. Attention-Deficit/Hyperactivity Disorder (ADHD) diagnoses among American children nearly doubled from 6.1 to 11.4 percent between 1997 and 2022. Among adults, self-reported ADHD diagnosis among working-age adults has more than tripled since 2012, from 4.25 to 13.9 percent. Diagnosed anxiety among children aged 3 to 17 rose from 6.9 to 10.6 percent between 2016 and 2022—a 54 percent increase in just six years. Diagnosed depression among the same age group climbed from 3.1 to 4.6 percent, a 48 percent increase, in the same time period. Among adults, the past-year prevalence of any mental illness rose to 23.1 percent in 2022, with young adults aged 18 to 25 reporting the highest rate of 36.2 percent. 

A surface-level reading of these numbers suggests that America is indeed in the midst of a mental health crisis. But diagnoses can change even when our underlying psychology does not.

Psychiatric diagnoses differ from most of medicine because they rely on subjective mental phenomena and behavioral symptoms instead of physical symptoms or biomarkers. There is no blood test for autism, no imaging scan that confirms ADHD, and no objective test that differentiates clinical anxiety from ordinary worry. Diagnosis depends on clinical judgment about whether a person’s behavior exceeds a threshold established by committee consensus in the Diagnostic and Statistical Manual of Mental Disorders (DSM).

The DSM has progressively broadened the boundaries of major psychiatric categories over successive revisions. The DSM-5, published in 2013, collapsed previously distinct autism categories into a single spectrum, making “on the spectrum” a label elastic enough to encompass both nonverbal children requiring constant care and socially awkward adolescents who prefer solitude. The same revision loosened ADHD criteria, allowing symptoms to appear as late as age 12 rather than requiring onset by age 7, and reducing the symptom threshold for adults. Generalized anxiety disorder requires only that worry be “excessive” and cause “clinically significant distress or impairment,” judgments that depend entirely on a clinician’s interpretation of where normal worry ends, and disorder begins.

Defenders of modern psychiatry often claim that expanding diagnostic criteria reflect better screening, capturing subtler presentations, and that rising diagnoses reflect more accurate assessments of the true population prevalence of mental illness. But aside from the grim forecasts of living in a world where half of all young people have experienced mental illness, there is reason to believe that psychiatric diagnoses have become less precise, not more. 

Broad diagnostic criteria often interact with screening instruments that cannot reliably distinguish clinical conditions from normal variation. The CDC’s autism prevalence estimates, for instance, rely on surveys such as the Social Responsiveness Scale, which asks parents to rate statements like “Would rather be alone than with others,” “Has difficulty making friends,” and “Is regarded by other children as odd or weird.” These items describe behavioral traits common to social anxiety, introversion, and ordinary shyness and cannot reliably distinguish autism. Yet researchers routinely use high scores on such instruments as proxies for clinical diagnosis in prevalence studies, including in the CDC’s own data.  

The limitations of this approach became especially apparent after the COVID-19 pandemic. CDC autism prevalence surged an additional 40 percent in just four years, from 2018 to 2022—a period during which millions of children experienced prolonged social isolation, disrupted routines, and reduced peer interaction that would predictably elevate scores on parent-reported behavioral surveys measuring social difficulties, whether or not the underlying rate of autism had changed. 

None of this diminishes the reality of autism, ADHD, or anxiety disorders for individuals with significant functional impairment. But when the boundaries of diagnosis are inherently subjective, and when diagnosis is the key that unlocks streams of taxpayer-funded services, the system will predictably expand those boundaries.

How Medicaid and the ACA Reward Diagnostic Expansion

When diagnosis is subjective, and payment depends on diagnosis, the system will reward expanding the definition of illness.

Incentives drive behavior. Psychiatric overdiagnoses would matter less if the diagnosis were merely a label. But in the American healthcare system, diagnoses serve as keys that unlock streams of taxpayer dollars. 

The Mental Health Parity and Addiction Equity Act of 2008, extended by the Affordable Care Act (ACA), requires health plans, including Medicaid managed care plans, to cover behavioral health services at parity with medical and surgical services. Parity addressed a real problem: mental health conditions were historically under-covered. But parity also limits the tools that plans can use to manage utilization. Prior authorization requirements, visit caps, and annual spending ceilings can all be challenged on parity grounds. Plans that wish to avoid litigation or regulatory action have a strong reason to approve rather than deny.

Under the fee-for-service payment model within Medicaid, which 2008 parity provisions dramatically expanded, providers submit a claim to the state Medicaid agency. The state then pays the provider in accordance with the predetermined price of the service, otherwise known as the fee schedule. The fee schedule, in theory, serves to regulate providers’ room for maneuver with respect to payment claims, thereby preventing undue financial gain. The reimbursement structure underlying the fee-for-service model is designed to mitigate abuse by binding providers to a prearranged sum. 

However, the fee schedule only governs the prices to which providers are entitled for their services. It introduces no effective mechanism by which to govern the legitimacy of the services themselves. This empowers providers to profit by inflating the frequency of services, knowing that the fee-for-service model fixes only the pricing and not the services. This creates the conditions for supplier-induced demand.

In practice, therefore, providers have the freedom to manipulate demand by lowering the diagnostic threshold for services. Across states, weak spending constraints further subsidize this demand. This serves to distort natural market forces by enabling providers to expand mental health services beyond the point at which their cost would be acceptable to recipients, especially those with minimal diagnostic eligibility.

Similar risks persist in managed care, which pays per patient rather than per service. While this model improves cost predictability, it does little to ensure services are necessary. Providers still control enrollment, and expanding the number of patients can drive spending just as effectively as increasing the number of services. Changing the payment mechanism does not eliminate the incentive—it simply shifts how it is exploited.

Additionally, under Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, states must cover all medically necessary services for children under 21, even services not otherwise included in the state’s Medicaid plan, including mental health services. 

When diagnoses rest on subjective behavioral criteria, and when coverage means open-ended reimbursement for services billed by the hour, the connection between spending and genuine clinical need begins to erode.

Then there is the federal matching structure. Medicaid’s open-ended Federal Medical Assistance Percentage reimburses states for 50 to 83 percent of Medicaid expenditures. When a state spends a dollar on autism services, it pays 17 to 50 cents. Federal taxpayers cover the rest. And because the match is open-ended, more spending automatically brings in more federal dollars. States bear only a fraction of the cost, weakening the fiscal discipline that comes with spending their own money.

Once therapy became mandatory, states used Medicaid waivers to circumvent standard rules and expand services and eligibility with federal funds. These waivers—and similar authorities—opened the door for providers to significantly increase Medicaid billing.

Enhanced federal matching rates during the COVID-19 public health emergency further reduced the state share, especially during the period when mental health spending grew the fastest. The pandemic significantly increased both the supply of and demand for psychiatric services. Telehealth services for mental health conditions surged 16- to 20-fold during the first year of the pandemic, according to a RAND study of over 5 million commercially insured adults, more than compensating for the drop in in-person care. By August 2022, overall mental health service utilization was 38.8 percent higher than before the pandemic. Mental health and substance use diagnoses grew from 11 percent of telehealth visits in early 2019 to 39 percent by mid-2021. The share of all outpatient visits carrying a mental health or substance use diagnosis doubled from 4 to 8 percent. 

Pandemic emergency waivers and telehealth policies further loosened restrictions on how services could be delivered and reimbursed. States such as Massachusetts, North Carolina, Indiana, and Colorado expanded telehealth eligibility (including audio-only services) and adopted payment parity for telehealth, effectively turning remote services into scalable, high-volume billing opportunities. The result was not just a shift in how care was delivered, but a notable increase in utilization and spending, often in the tens of millions of dollars per state annually, consistent with policy changes that reduced the marginal cost of delivering and billing for services.

A substantial body of research suggests that financial incentives can influence psychiatric diagnosis rates. In the United States, eligibility for school services and insurance coverage often depends on specific diagnostic categories. For example, states offering more autism-specific services tend to report higher autism prevalence, while classifications of other developmental disabilities decline—a pattern consistent with diagnostic substitution. A 2009 study estimated that at least 26 percent of the increase in autism diagnoses in California between 1992 and 2005 could be explained by diagnostic substitution, primarily from children previously classified as having intellectual disability.

A Problem of Prosperity?

In economic terms, what has unfolded in American mental healthcare is supplier-induced demand operating within a system that lacks the price signals, utilization controls, and outcome accountability mechanisms that would normally constrain it. The therapy industry has expanded to absorb the available reimbursement, exactly as economic theory would predict in a fee-for-service system with elastic diagnostic criteria, open-ended coverage mandates, and absent oversight.

That is worth stating clearly, because the rising tide of psychiatric diagnoses is often cited as proof that modernity has failed; that the improvements in life expectancy, poverty reduction, literacy, income, and so forth are hollow, because they mask a deeper spiritual or psychological collapse. That narrative is understandable. It is also incomplete.

The story of mental health in the modern world is not one of pure decline. It is a story of multiple forces operating simultaneously, some genuinely concerning and some artifacts of the very prosperity that makes psychological well-being a priority in the first place. Wealthy societies can afford to screen for, name, and treat conditions that our ancestors endured in silence or never recognized at all. That is a form of progress. But when the systems designed to deliver that care are structured to reward volume over value, diagnosis over outcome, and spending over accountability, the result is predictable: an ever-expanding pool of diagnoses that dilutes resources away from those with the most severe impairment.

There is reason to be optimistic. The fact that societies are wealthy and secure enough to attend to psychological suffering at all—rather than simply enduring it—represents a remarkable achievement. 

But the same ingenuity that produced modern medicine, market economies, and unprecedented material abundance can also produce perverse incentive structures that undermine the goals they were designed to serve. Understanding that human systems, like the humans who design them, are imperfect and responsive to incentives, is not an argument against progress. It is a precondition for sustaining it. Progress, as ever, depends on getting the incentives right.

CNBC | Communications

Young People Are Adapting to Social Media Through Moderation, Selectiveness

“A 2025 Deloitte consumer trends survey of more than 4,000 Brits found that nearly a quarter of all consumers had deleted a social media app in the previous 12 months, rising to nearly a third for Gen Zers.

Meanwhile, social media use has steadily declined since time spent on the platforms peaked in 2022, according to an analysis of the online habits of 250,000 adults in more than 50 countries by the Financial Times and digital audience insights firm GWI.

Globally, adults 16 and over spent an average of two hours and 20 minutes per day on social platforms by the end of 2024, down almost 10% since 2022, the report found. The decline was particularly pronounced among teens and 20-somethings.”

From CNBC.