Traditionally schizophrenia and related psychotic disorders have been difficult to treat due to long delays in treatment, ineffective medications, a lack of intensive case management and psychosocial support for patients and families. The direct costs of schizophrenia are estimated at 2.35 billion dollars a year. This includes a) health care costs b) administrative costs c) lost productivity d) incarceration costs. Indirect costs of the disease are estimated at another 2 billion dollars. Schizophreniform disorder, bipolar disorder, brief reactive psychosis, organic psychosis, delusional disorder, drug-induced psychosis, psychotic depression and schizoaffective disorder costs the government millions of more dollars annually.

A 1994 healthcare cost study indicates old age and mental disability place the highest demand on healthcare resources in the Netherlands. An examination of mental healthcare in Canada reveals an unheralded crisis which is causing a major burden on Medicare. The following figures highlight the exorbitant cost of 'crisis management', or conventional treatment of neurobiological disease:

• 16% of healthcare expenditures attributed to psychiatric disorders.
• Hospitalization for mental disorders 70% of direct costs to healthcare.
• 10 to 14% of costs for acute care hospital admissions are for individuals with schizophrenia.
• 20, 400 patients were discharged in 1999/2000 from psychiatric wards in British Columbia and 1/4 were re-admitted within 90 days.
• Between 1992-1998 expenditures on psychotropic medication in Canada increased by 216% and 33% of expenditures were on antipsychotics.
• 75% of people with psychiatric illness have a substance abuse problem costing 10-40 billion dollars annually.
• In 1997 suicide cost Canadian hospitals 100 million dollars.

A modern approach in the treatment of psychotic disorders emerged first in Australia in the early 1990's followed by similar efforts in Canada in the mid-nineties in several communities (London, Halifax, Calgary and Toronto). A new early intervention clinical research program (Prevention and Early Intervention Program for Psychoses) established in London, Ontario in 1996 by Dr. Ashok Malla and his team, furthered the approach at the Early Psychosis Prevention and Intervention Centre in Melbourne by opening access to the community and setting up a community case identification program. In partnership with the London Health Sciences Centre and the University of Western Ontario, PEPP provided a chance for optimum recovery to youth in London through medical and psychosocial intervention during the initial stages of psychosis. Dr. Malla's work led to his current position at McGill University and Douglas Research Hospital as Head of Clinical Research and Canada's Research Chair in Early Psychosis. More significantly, collaboration between the London program, its parent support group and programs in Toronto, Hamilton, Ottawa and now Montreal, is paving the way for development of early intervention programming in Levis, Vancouver, Winnipeg and other cities.