The author reviews the history of the development of managed care, the restrictions it has placed on psychiatric treatments, including psychotherapy, and the concerns it has raised about access to and quality of care. He discusses research studies documenting that psychotherapy is a fundamental component of psychiatric treatment and that it must be included in all health plans and organized systems of care. Several false beliefs about the use and cost of psychotherapy are considered, such as that dyadic psychotherapy is based on abreaction, a technique that Freud abandoned, and that costs for psychotherapy will skyrocket if it becomes universally accessible. Research has indicated that inappropriate limitations on psychotherapy in prepaid settings lead to poor mental health outcomes. The author emphasizes that cost- based constraints on established psychiatric treatments are not acceptable until carefully constructed scientific outcome studies demonstrate that the use of such constraints does not lead to adverse consequences.