An important pair of distinctions should probably be made here, between institutional psychiatry and private-session psychiatry, on the one hand, and between psychoanalysis and medical-model treatment of mental illness on the other.
a) Institutional psychiatry, the kind that gets imposed on people when they are determined to be a danger to themselves or other people, does not consist of psychoanalysis. I know some people have a sort of blurred-together idea, as if Philippe Pinel struck the chains off the poor suffering mental patients in the insane asylum and led them to Freudian couches to talk about their potty training, but it didn’t happen that way. Institutional psychiatry has always been about holding and controlling socially disruptive people. Before the medical model, it revolved around the belief that mad people were demon possessed or were under the influence of the moon (“lunacy”); the medical model replaced that with the belief that mad people had mental illnesses, problems in their brain that had no more to do with their personal experiences and psychological hangups than demon-possession did. In neither version of institutional psychiatry did/does prolonged conversations with the patient, geared towards helping the patient make breakthroughs, play a significant role, if any at all. (In some forms, including modern ones, the doctor never speaks directly with the patient at all).
b) Freudian psychoanalysis, and the competitive / offshoot schools such as Jungian and Adlerian and so forth, were never aimed at treating the population who get locked up in insane asylums / psychiatric wards etc. The target population from the start has been individual wealthy enough to pay for analysis, and in the era prior to medical insurance as we know it that pretty effectively limited the pool to people seeking treatment voluntarily plus wives and children and other dependents on whose behalf a head of household type person would pay. These modalities of therapy did not arise from a medical background, nor did they stem from institutional psychiatry, which predated it and existed concurrently with it.
c) The original administrative location of psychiatric services under the broad aegis of “medicine” occurred within institutional psychiatry, and did so decades and decades before the advent of Thorazine and other such psychiatric pharmaceuticals. Psychiatry was brought under medicine not because anything particularly “medical” was taking place within psychiatry but because of the social stature of medicine and physicians – much the same as getting the church to sponsor and be administrator to a small regional clinic might lend it more legitimacy than it would otherwise have in the community.
d) Between the initial deployment of Thorazine and other similar meds and the present, and the fade in reputation throughout academia and general social circles of orthodox psychotherapy, a wide and diverse mental health industry has come about and flourished, encompassing theories and practices that borrow bits and pieces from both the medical model and the underlying notion behind psychoanalysis of working one’s problems out psychologically. The primary practitioners may be nurses, social workers, psychologists, psychiatrists, psychotherapists, clergy, and/or self-defined “new school” licensees practicing in new traditions, some of which thrive and continue while others come and go.
e) Insurance companies may be prepared to pay for a limited number of sessions of non-institutional therapy based on some statistical information about average time and weighted in favor of short and finite. In addition, insurance companies will generally reimburse institutional psychiatric treatment up to a certain duration. Long term involuntary institutional psychiatry is reimbursable by Medicaid. In most locations, services that are not reimbursable are scarce, as the practitioners’ livelihood depends on an available supply of wealthy clients/patients. These are expensive and the tendency to put money into them appears to be affected in part by the perceived trendiness of doing so. New York and Los Angeles are two places where it has been a status symbol among certain segments of the relatively wealthy to engage in long-term therapy. In smaller venues lacking these specific trend-following social segments, therapy is more likely to consist of short-term narrowly-defined problem-fixing, such as that geared towards handling postpartum depression or helping you to lose weight and stop smoking. People who attend these may not hide the fact but probably don’t brag about it either. In yet smaller venues, where the psychiatry that people run across and hear of is proportionately more often institutional psychiatry, there’s more stigma and far less cachet.