The discussion emphasizes that the economic and social costs of untreated addictive and mental disorders are high to both individuals and society. The direct medical care costs and the indirect costs from productivity losses totaled more than $314 billion in 1990, more than cancer, respiratory disease, AIDS, or coronary heart disease. However, effective treatments for many of these disorders are well documented. For example, half the people who receive treatment for schizophrenia either recover completely or are able to live independently with only modest psychosocial support. In addition, while treatment for depression is effective, depression is underdiagnosed and undertreated by primary care and other nonpsychiatric practitioners. In the context of managed care, with quality standards maintained, treatment costs can be both affordable and controllable. In addition, the treatment of drug abuse and mental illness provides substantial cost savings in other medical care areas. Approximately one-half the cost of alcohol and drug treatment is offset within 1 year by subsequent reductions in the use of medical services by the affected family, not just the addicted individual. Treatment for mental disorders is associated with about a 20-percent reduction in the overall use of health care services. Figures and 37 references