The ‘Reverse Disparity’ in Psychosis Care

May 11, 2023

Illustration by Anna Vignet/KQED

Every year, 100,000 Americans — mostly teens and young adults — experience their first psychotic episode. Research shows getting specialized, holistic treatment early can help, but most people don’t get that care. KQED’s April Dembosky shares her reporting on why early treatment for psychosis can be so hard to get.

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Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: Hi, Dan here. We’ve got something special for you today. In the first half of the show, we’re going to air part of an audio documentary that originally ran on The California Report Magazine from KQED, the public radio station in San Francisco. 

Today, reporter April Dembosky talks about the experience of two people dealing with psychosis, which often manifests in conditions like schizophrenia. One patient received the full scope of evidence-backed treatment, the other did not. In the second half of the show, I’ll talk with April about the policy decisions driving how we treat psychosis in the U.S.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein, this is Tradeoffs.


April Dembosky: When Yvonne finished high school, she was excited to get out of Northern California for a while. She moved to the East Coast for college and decided to major in nutrition. One day, in her anatomy class, she was sitting in a big lecture hall when she got a funny feeling.

YVONNE: The teacher was lecturing and all of a sudden, I thought the teacher was talking about my body. I was like, why is he telling the class about me? Why is he talking about my kidneys? How dare he. And I got really scared and I ran out of class.

AD: A few days later, Yvonne started hearing things. It was like a radio was on in the background of her life, with people chattering constantly. By the way, we’re calling Yvonne by a family name and altering her voice to protect her mental health history. For months, she was able to shake it off, the chatter. But then the voices started speaking in full sentences. Telling her what to do.

YVONNE: You’re worthless. You should go jump off a bridge. Take that knife and cut yourself.

AD: Her doctor prescribed some medications. But still, Yvonne started to lose perspective. Maybe the voices weren’t just her mind playing tricks on her. Maybe… they were real. That’s when the aliens arrived. She heard their ship hovering outside her window at night.

YVONNE: It was just like this loud screeching sound.

AD: The aliens told her they’d come to abduct her. They said, “we’re here for you.”

YVONNE: You’re a bad person so we need to remove you from this planet. Then I’d hear a bunch of gargled noises that was their language that I couldn’t understand.

AD: Yvonne had no doubt this was real. And when God started  talking to her a few weeks later, that was real, too. He told her she was going to be the next Jesus. 

YVONNE: He was going to give me instructions on how to save the world.

AD: At first, this made Yvonne feel great. God had chosen her. But then, she got scared, overwhelmed by the responsibility. Yvonne called her mom. She was a probation officer and had worked in mental health court, so she knew what NOT to say: “Yvonne, you’re hallucinating, that’s not real.” Instead, she met Yvonne inside her reality. She told her, gosh, that sounds scary.

YVONNE: And she said, you know, you sound like maybe you need some help and maybe the hospital can help you.

AD: Yvonne’s mom says it was a last resort. She was 3,000 miles away, they had no family nearby. She encouraged Yvonne to check herself in.

YVONNE’S MOM: And she did. And then the minute she got there, she wanted out. 

YVONNE: In the hospital, they treat you like you are just – stupid. 

AD: Yvonne says she left the hospital with some new medications, but no plan. She managed to limp through the end of the quarter. The voices were so distracting now, she couldn’t make it through class anymore. Eventually she dropped out and went home to Northern California. She was miserable.

YVONNE: My life wasn’t my own. It was up to these voices because they told me what to do. They wouldn’t go away and I couldn’t do anything with them. So they ruled my life.

AD: Yvonne was diagnosed with schizoaffective disorder; in short, schizophrenia with bouts of mania or depression. 

YVONNE: Thought my life was over. 

AD: She found a therapist at Kaiser Permanente, the major health system and private insurer. But her mom says the therapist only had time to see Yvonne once every six weeks. When they did meet, she didn’t seem to know what to do when Yvonne wanted to talk about her voices.

YVONNE: She would skip over it and not really address it and talk about my anxiety instead.

AD: Eventually, Yvonne says her doctors acknowledged that she couldn’t get what she needed at Kaiser. They paid for her to go to a two-year outpatient program at UC-San Francisco, one that specializes in psychotic disorders in young people. Yvonne was surprised.

YVONNE: Because Kaiser doesn’t like to pay for things (short laugh).

AD: Right away, Yvonne knew treatment at UCSF was going to be different.

YVONNE: In my first session, we set goals that I wanted to achieve, and I thought that was really cool because no one had ever asked me what my goals for treatment were.

AD: The UCSF early psychosis program is one of about 50 in the state and 350 in the country. They were started about fifteen years ago with what was then a revolutionary idea. 

See, back in the ’80 and ’90s, doctors say they didn’t really know what to do with schizophrenia. They prescribed high doses of antipsychotic medications that basically turned people into zombies. They told them to give up on work and sign up for disability payments instead. UC Davis psychologist Tara Niendam is part of a new generation of doctors that said: What if we ask patients what they want and actually work with them toward full recovery? 

NIENDAM: It’s not just about stabilizing you clinically. It’s about making sure we don’t lose track of your future. You should be in college. You should be living on your own.

AD: With other conditions like diabetes or cancer, we know that the sooner people get into care, the better they do. We now know… the same is true of psychotic illness. But Niendam says most people in the U.S. don’t get into care until a year and a half after their first psychotic episode. 

NIENDAM: That’s bad. If we can catch people before that, the data show us those people will show greater reductions in symptoms.

AD: Their voices and delusions go down.

NIENDAM: And greater improvements in overall functioning.

AD: They’re more engaged with their friends and doing better at work or school. Niendam says there are a few reasons why starting treatment earlier works better. 

One: Patients respond to lower doses of medication, which can lower side effects and increase the likelihood that people keep taking them. Two: Their families are more likely to be involved and supportive of their care. And three, and most importantly: People are often more open to treatment, the kind that can persuade them that what they’re seeing and hearing is not real.

NIENDAM: Folks are still in that questioning phase. Like they come out of it and they’re like, ‘Whoa! What was that?’

DG: At UCSF, Yvonne’s new therapist taught her how to get control over the voices in her head. Yvonne learned to talk back to them. She would sit in the therapist’s office, in the chair on the right side of the room and pretend to be her voices.

YVONNE: Go back to bed. Don’t get out of bed. It’s dangerous. 

AD: Then Yvonne would go sit in the chair on the left and practice her response.

YVONNE: Thank you, voices, for wanting to protect me and watch out for me. But I’m going to get up and be brave and go to the world today.

AD: It took a while to get the hang of it, maybe a year, but when she did, Yvonne was able to go back to school. When the voices would start yelling at her while she was in class, calling her dumb, she was ready.

YVONNE: And I’d be like, You know what? I really don’t appreciate the way you talk to me. Let’s talk after class, let’s talk at 2 p.m.

AD: The voices wouldn’t go away completely, but they would fade into the background, enough where Yvonne could finish class or read a book or do her homework. 

YVONNE: I just started to feel more in control.

AD: Yvonne is 27 now. She graduated college last spring, summa cum laude, and she’s now working a full time job. She and her friends go out to shows in the city or build bonfires on the beach. If she thinks she hears a voice or an alien, she does a literal reality check.

YVONNE: I’ll be like, oh, did you hear that? And they’ll be like, What? (laughs) And if they don’t, I can be like, okay, that’s just a voice.

AD: But mostly, she doesn’t like talking about her illness with her friends. She’d rather talk about the Kardashians instead.

YVONNE: I just like to be normal when I’m with them.

AD: For Yvonne, the skills she learned from therapy at UCSF were a revelation. But there was actually a whole other dimension of care that she never got. Care that involves a full team of specialists looking out for every aspect of a young person’s life.

Young people like Sandy. Sandy is 20 now. We’re calling her by a family name and altering her voice, so her health history doesn’t disrupt her career path. For her, psychosis hit when she was working her first job after high school, at a fast food restaurant.

SANDY: My co-workers would be chatting it up or like talking about work stuff.

AD: And Sandy got this weird feeling, that somehow they knew what she was thinking. 

SANDY: I was like, are they talking about burgers or are they talking about me?

AD: There was one coworker in particular, a guy she had a crush on, and she was pretty sure he was watching her. Even following her around. 

SANDY: If I was walking down the street…

AD: Or hanging out in the park.

SANDY: He was like always around.

AD: Sandy’s mom says she wanted to sleep with the lights on. 

MOM: She said, ‘Mom is someone here?’ I can, is someone here? I said, no, no one’s here. ‘Are you sure?’ 

Her mom said one day, Sandy got so scared, she locked herself in the bathroom. 

MOM: She’s just screaming and screaming and screaming, unstoppable. 

AD: Her mom wanted to call for help. But she didn’t have a job at the time. This was during the pandemic, and the hotel where she worked had been closed for nearly a year. After she lost her job, she lost her health benefits.

MOM: My husband’s like, How much is that going to cost? 

AD: She called 911 anyway. After a rough couple weeks in the hospital, Sandy was diagnosed with schizophrenia. She enrolled right away in an outpatient early psychosis program at the Felton Institute, a nonprofit clinic outside San Francisco. Right away, Sandy was introduced to the team of providers who would be by her side for the next two years. 

SANDY: First I was set up with a therapist.

AD: Who taught her coping skills for paranoia and delusions

SANDY: A physician.

AD: Who prescribed antipsychotic medication.

SANDY: A OT specialist.

AD: An occupational therapist.

SANDY: Peer specialist.

AD: A guy who also had psychosis and recovered.

SANDY: Family support.

AD: A parent who coached her mom on how to help her at home.

SANDY: I also was set up with Monet, which is the job coach.

AD: When she was ready to look for work, Monet took Sandy with her to the mall. Then they sat down and filled out the applications together.

SANDY: Next thing I know, I was being interviewed and I got hired.

AD: She started out as a cashier at a new fast food restaurant and within three months she got promoted to a manager role. For Sandy, it’s just one step in her long-term recovery plan. 

SANDY: I want to focus on getting a degree to get me a better career.

DG: When we come back, I talk with reporter April Dembosky about the evidence behind early psychosis treatment and why so many people who could benefit don’t have access.  


DG: Welcome back. I’m here with April Dembosky, health correspondent for KQED in San Francisco. April, so glad you’re here.

AD: I’m glad to be here. Thanks for having me.

DG: We just listened to part of the really powerful piece on early psychosis that you did for the California Report Magazine. Really strong stuff, April. Your story introduced us to Yvonne and Sandy, two young women in California trying to get treatment for psychosis. And the first thing I want to do is establish some basics, beginning with what is the difference between psychosis and schizophrenia?

AD: So psychosis is a broad term. It effectively means being disconnected from reality. It can be caused by a lot of different things. For example, smoking too much weed. Some women develop postpartum psychosis after having a baby. And, Dan, you and I have had it too. Think of the times you thought  you heard someone calling your name or think you feel your phone vibrate, but it turns out it didn’t happen. That is technically psychosis, albeit a very very mild form of it, but it is psychosis. 

DG: Great definition. Very helpful. I’ve never thought of it like that before. What about schizophrenia, April?

AD: Schizophrenia is a specific psychotic illness, usually a chronic condition. If it’s not treated, then people will likely have recurring psychotic symptoms like hallucinations, delusions, or paranoia and they can really intensify over time.

Schizophrenia also comes with non-psychotic symptoms, like a lack of motivation or withdrawing from social interactions. These are usually the things that can make it hard to hold down a job for example and they can’t be treated with an antipsychotic medication.

DG: And how common is it for people to experience psychosis? Is this a big problem, April?

AD: Well, if we’re talking about the milder forms of psychosis, some estimates are that one in four or five people will have some kind of psychotic experience in their lifetime. But when we’re talking about people who have a full blown psychotic episode, that’s about 100,000 people in the U.S. every year who experience this for the first time. So it’s a small number. These folks tend to be young, in their late teens or early twenties, like Yvonne and Sandy. 

DG: And what sort of treatment do they end up getting? 

AD: A lot of young people don’t get any help at all, especially at first. These symptoms can be really confusing, there’s a lot of stigma, so people may be reluctant to admit they’re having them. But if and when they are ready to look, finding a clinician who knows how to help can be really difficult. 

If we think of Yvonne’s early experience, she had a psychiatrist. He tweaked her meds a bit, but she still ended up in the hospital. And after that, she was on her own until she just couldn’t cope anymore and dropped out of school. It was about six months until Yvonne found a doctor who could give her an accurate diagnosis. And then it was another six months that she had to wait for a spot at the UCSF program to open up. 

DG: That’s a seriously long journey.

AD: And the thing is, Dan, this kind of timeline is typical. It takes on average a year and a half to get into one of these specialized treatment programs. And, believe it or not, Yvonne was one of the lucky ones. Up to 80 to 90 percent of young people who have a full psychotic episode never get into one of these programs at all. 

DG: You say in your piece that there are about 350 of these early psychosis programs in the country. What’s the backstory? Where did these facilities come from? 

AD: I think the story of these clinics starts in the ’80s and early ’90s. As we heard in the piece, people diagnosed with schizophrenia at this time were pretty much told your life is over, and in order to get treatment, they pretty much had to stop working in order to sign up for Medicaid and get disability payments. 

So it turns out, this approach is not only not effective for people, but it’s also very expensive for the government. So it was at the government level that folks became interested in this idea of early intervention. If we intervene early and holistically, can we keep people in school or at work while they get treatment? Could we maybe offset some of the worst outcomes and potentially, could we save money in the long run?

So it was in the early 2000s that the first clinics in the US started to open up, and then it was in 2014 Congress began investing more heavily in building a full network of them.

DG: So that was the vision back in the early 2000s. I’m really curious, a couple decades later, what have we learned? Does the evidence say these programs work?

AD: Roughly, yes. We now have about 80 studies looking at these programs. And there are a few key takeaways. So one of them: the faster someone gets into care, the better their improvement will be. So that’s one of the things these programs actually put into action, where staff will actually go out into the community or at schools to find people who are suffering, rather than waiting for the patients to find them. Sandy’s doctors, for example, they connected her with the Felton Institute while she was still in the hospital.

Some of the studies also compare the effects of these specialized programs to care as usual. So, what Sandy got from her full team of providers versus what Yvonne initially had with just a regular therapist. And these studies show that folks in specialized programs have  greater reduction in symptoms — less hearing voices, fewer delusional beliefs. They have fewer hospitalizations and visits to the emergency room. And they’re more likely to stay in school or have a job and stay connected with their friends. So overall their quality of life is better.

I talked to UCSF psychiatry researcher Rachel Loewy, and she summed it up like this:

LOEWY: So these programs are much more about a full recovery than they are just symptom remission. Are the effects for everyone radical? No. Is it a cure? No. But overall, it definitely has much more effect than usual care, which is frankly pretty abysmal.

AD: Now, what we don’t know, is how long these benefits last. Because the first programs opened their doors about 15 years ago, there haven’t been any long-term studies to know, how are folks doing 10 or 20 years after graduating treatment. Researchers are starting to study this now.

DG: But, April, as you said earlier, very few people actually get this more specialized, team-based approach. Why is that? Money?

AD: Of course it’s money, Dan. This really comes down to how we pay for this care. Remember, this is all government backed. So states get funding from the feds in the form of mental health block grants. And several years ago Congress earmarked 10% of these block grants for early psychosis programs, which comes out to about $70 million a year. Some states top that up with some of their own money, like New York, California, Virginia. Texas might do it too. And about a third of state Medicaid offices pay for some of the services as well. But there are only a few hundred clinics nationwide, and because they’re funded with public dollars, they’re often limited to serving low-income people. So for folks with private insurance, like Anthem or Blue Shield or Aetna, they generally can’t access these programs. Private insurers have pretty much stayed out of the early psychosis business. 

DG: And why is that?

AD: There are a lot of reasons. But the main one is insurers typically don’t pay for these kinds of holistic, team-based programs. For example, one of Sandy’s providers was a job coach. Sometimes they would meet at the mall to go job hunting together or they would meet at a cafe to fill out applications or talk about how Sandy might ask for a raise.  Private insurers don’t pay for this because it’s not a clinical treatment, it’s not delivered in a clinical setting and it’s not provided by a licensed clinician. It’s the same thing for services of the family advocate who met with Sandy’s mom once a week, or the peer support specialist who would sometimes talk to Sandy on the phone. These are considered non-medical services. So even though they’re considered essential components of the treatment, and they’re supported by research, insurers generally don’t pay for them. 

DG: At the same time, I know there are some examples of private insurers beginning to pay for more non-medical services if they think it can save them money in the long run. I take it that that sort of business argument has fallen on deaf ears so far here.

AD: So far, yes. There’s doubt among insurers about whether this is actually cost effective. Kaiser Permanente, which is Yvonne’s insurer, is conducting a study on this at the moment, but for now, insurers are not convinced this model will save them money, as opposed to potentially saving the government money down the road. It’s also an administrative headache. I talked to Yuhua Bao. She’s a health economist at Cornell. And she says because insurers would have to set up a whole new way of paying for this kind of care, even if it did save money, for the relatively small number of people who have a psychotic episode, it’s not worth it to them. 

BAO: They often say that, okay, that’s just, too little, too insignificant a part of their business that they really – don’t care that much. (laughs)

AD: The bottom line is, if you or your kid is covered by private insurance, more likely than not, you can’t access the full suite of services of early psychosis care. Clinicians in the field call this a “reverse disparity” where the services for low-income families are better than what’s available to middle class or wealthy families.

DG: And I’d like you to approximate the size of this problem. What percentage, April, of people who have early psychosis, who could benefit from this treatment are on private insurance vs. Medicaid? In other words, how many people actually face this “reverse disparity” as you call it?

AD: It’s hard to say exactly, but here’s what I can tell you. Psychosis usually hits in someone’s late teens, early 20s, and an analysis of Census data shows about 70% of people between 19 and 25 are on private insurance. So a lot of people experiencing psychosis for the first time are probably on commercial insurance without access to the best care.

But more than that, doctors and health advocates say folks are more likely to not have access to this care because there aren’t enough places that offer it. And without a consistent and reliable funding stream, the network of clinics can’t scale up to meet the need. That’s why clinics and doctors are trying to get commercial insurers on board. 

DG: And it seems like lawmakers are too, right? I know some legislators in California where you are and other parts of the country are trying to force private insurers to cover this sort of care. What’s the status of those efforts? 

AD: Illinois passed one of these laws several years ago requiring private insurers to pay for this care. It’s taken time to get insurers to actually do it, but there are now two of them that do. Virginia is working on a similar piece of legislation now. Massachusetts and California tried last year, but both of those bills died. 

That said, California has a landmark law in place, it passed recently, and it requires insurers to cover more kinds of evidence-backed mental health treatment. And early psychosis care in particular may be written into these regulations this year.

DG: April, you’ve spent a lot of time digging into this issue from a personal patient perspective as well as these bigger policy questions we’ve been talking about. What are you going to remember from this reporting? What’s going to stick with you?

AD: I think this idea of a reverse disparity is what really sticks out to me and how the policies that get written with a system in mind, how that actually plays out for families that have to deal with the consequences of these policy decisions. The staff at some of the clinics I visited talk about parents dropping their kids from their private plan and enrolling them in Medicaid so they can have access to these programs. Or families who live in a place where the rules are such that they can’t get into one of these clinics so they’ll actually move their family to a different county so their kid can get care.I even heard the story of a mom who had her son arrested because jail was the only place he could get meaningful treatment. The choices that people are sometimes forced to make to get mental health care in particular can be really astounding. 

DG: April Dembosky, thank you so much for your reporting on this important issue. 

AD: It’s been great to talk to you, Dan. Thanks for having me. 

DG: You can find a link to April’s full 30-minute audio documentary on early psychosis on our website

I also wanted to take a minute to note that the day this episode is being released, May 11, 2023, marks the end of the federal COVID public health emergency. In this week’s Research Corner newsletter, we highlight three studies that explore what we’ve learned from this three-year experiment with how we handle everything from telehealth to sick leave to emergency public health orders. You can sign up for our free weekly Research Corner newsletter at

I’m Dan Gorenstein, this is Tradeoffs.

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Episode Resources

Selected Reporting and Research on Early Psychosis:

Proven Schizophrenia Treatments Keep People in School, at Work and off the Street. Why Won’t Insurance Companies Cover Them? (April Dembosky, KQED, 3/1/2023)

State Snapshot 2021-2022: Early Psychosis Programming Across the United States (EPINET, 11/2022)

Treatment for psychosis—and other mental illness—differs drastically by county (Jocelyn Wiener, CalMatters, 6/23/2019)

Transforming the Treatment of Schizophrenia in the United States: The RAISE Initiative (Lisa B. Dixon, Howard Goldman, Vinod H. Srihari and John Kane; Annual Review of Clinical Psychology; 1/12/2018)


Episode Credits


April Dembosky, Health Correspondent, KQED News

The Tradeoffs theme song was composed by Ty Citerman, with additional music this episode from Blue Dot Sessions and Epidemic Sound.

This episode was produced by Ryan Levi and mixed by Andrew Parrella. Editing assistance from Cate Cahan.

April’s original story was edited by Kevin Stark and Katrina Schwartz and mixed by sound engineer Brendan Willard for KQED’s The California Report Magazine.

Additional thanks to: the Tradeoffs Advisory Board and our stellar staff!