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Headspace services for early psychosis have some benefits but aren’t cost-effective

Adolescence and early adulthood is a time for people to become more independent, complete their education, enter the workforce, form key relationships and develop lifelong health habits.

It’s also a period where mental health problems often first appear, which can disrupt the person’s development and potentially have a life-long impact.

Many experts argue early intervention for emerging mental health problems can prevent or reduce these disruptions.

But while the concept of early intervention during youth makes a lot of sense, the mental health outcomes from young people accessing Australia’s Headspace centres have been disappointing.

Remind me, what is Headspace?

Funded by the Commonwealth government, Headspace began in 2006 with ten centres, which are described as:

a one-stop shop for young people who need help with mental health, physical health (including sexual health), alcohol and other drugs or work and study support.

It has since expanded to more than 100 centres nationally and has been influential internationally.

What do the evaluations say?

An independent evaluation in 2015 found the effects on mental health were “relatively weak”.

One of the explanations for this was many Headspace clients received only one to two sessions of treatment, which was too little to be effective.


Read more: Is 'headspace' really improving young people's mental health?


However, a more recent study looked at the outcomes for young people who received two years of early intervention from Headspace.

This study found most of these young people showed no or only temporary improvement, suggesting other approaches are needed.

Another layer of services for more complex problems?

Headspace services appear insufficient for young people with complex mental health problems. So one suggestion is to add a layer of more intensive mental health services for such young people.

These services would be modelled on early intervention services for young people with psychosis: a more severe mental illness in which the person loses contact with reality.


Read more: Budget funding for Beyond Blue and Headspace is welcome. But it may not help those who need it most


But the Commonwealth government has already set up a number of Headspace early psychosis youth services.

So the outcomes of these services need to be examined before youth services are expanded in this direction.

Although an independent evaluation of these services was completed in August 2020, it has only recently been released to the public under a Freedom of Information request.

What did the review find?

The Headspace early psychosis program started in 2014 and has provided care in six locations across Australia to young people aged 12–25 who were experiencing a first episode of psychosis or were at very high risk of becoming psychotic.

The services are more intensive than provided to regular Headspace clients. They include a mobile assessment and treatment team, a continuing care team, a functional recovery program, group and family programs, and a peer support program.

The evaluation found the early psychosis youth program “was effective in achieving improved outcomes for some young people”. However, the services were not cost-effective.

Young man sits with a therapist.
The Headspace early psychosis program improved outcomes for some young people. Shutterstock

To assess cost-effectiveness, health economists often estimate the cost of giving a client an additional year of good quality life – a Quality Adjusted Life Year (or QALY).

A cost of up to A$50,000 to A$70,000 per QALY gained is generally considered a “good buy”. However, the Headspace program cost A$318,954 per QALY gained, which is way above this threshold.

The Headspace early psychosis services were also found to be less cost-effective than mental health services provided by state governments, where case managers link young people with psychosis to services and provide support.

Benefits appear short-lived

It was hoped intensive early intervention programs might “bend the curve” and change the lifetime trajectory of illnesses such as schizophrenia.

The peak disability for schizophrenia occurs in mid-life. If intensive youth programs changed the trajectory of the illness, it was expected they might substantially improve mid-life outcomes and reduce the lifetime health and social costs.


Read more: What causes schizophrenia? What we know, don't know and suspect


It is becoming clearer these early hopes were misplaced. The benefits of early intervention for psychosis are mostly short-lived. The long-term follow-up studies reveal a dilution of the beneficial impact after the early intervention service ends, usually at two years.

After this time, young people who received the more expensive early intervention program fare no better than those who received “treatment as usual”, for example, the care provided by state governments for people with psychosis.

Studies are underway comparing longer treatment (up to five years) with standard treatment (up to three years) by early intervention teams, to find out if the early gains are maintained.

So far, these trials have not found an improvement in the numbers of people who recover, nor a reduction in hospitalisation. But more trials are needed.

Where to next?

If the outcomes of the Headspace early psychosis program are no better than state government mental services after a couple of years, and the costs of the Headspace program are proving unsustainable, the program will likely be wound back at some point in the future.

In the meantime, Commonwealth and state governments must develop a sustainable model of care that still achieves the best possible long-term outcomes.

This could mean integrating Headspace services into existing state-based hospital mental health services, to provide more coordinated care and case management, as Alfred Health in Melbourne has done, with great success.


Read more: Youth anxiety and depression are at record levels. Mental health hubs could be the answer


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