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I can't seem to correctly understand what exactly is precision psychiatry? I can't find good sources on the internet about it, other than "The new field of ‘precision psychiatry’" by Fernandes et al. (2017), maybe because this is a new field. Is this different from precision medicine? If so, how? How does it relate to the definition of the word precision (Precision refers to the closeness of two or more measurements to each other)?

Specifically, I can't understand how to apply precision psychiatry in order to diagnose or predict a mental disorder, for eg. PTSD. Do I have to decide and make a checklist of parameters of the subject by which I can decide if that person has that disease, and how will someone go on about diagnosing the disorder after that. Can you explain it with respect to an example like PTSD or some other disorder?

Fernandes, B. S., Williams, L. M., Steiner, J., Leboyer, M., Carvalho, A. F., & Berk, M. (2017). The new field of ‘precision psychiatry’. BMC medicine, 15(1), 80.

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According to the article you linked to, Precision Psychiatry (PP) is literally the application of Precision Medicine to psychiatry. Here "precision" is used to mean personalisation to each individual patient.

In your question, you don't seem intereseted in how treatment would differ between regular Psychiatry and PP, so I won't address it. As for how diagnosis differs, it seems to mostly just imply using way more data:

Arguably, the most logical way of obtaining hypothesis-free and data-driven approaches in the neurobiology of psychiatric disorders is making use of ‘omics’ techniques. Genomics, epigenomics, transcriptomics, proteomics, metabolomics, metagenomics and lipidomics are capable of independently providing valuable information about the neurobiology of these psychiatric conditions. Further, when combined with a multi-omics approach, in what is called panomics, and analysed using system biology computations, they might unveil the underlying biological pathways involved in psychiatric disorders.

Concidering the example of PTSD, one can imagine a patient entering a PP practicioner's office complaining of PTSD symptoms. Given these tests, the practitioner would be able to diagnose them with either PTSD type-A or PTSD type-B or maybe actually Depression type-C depending on what mechanistic deviations are seen. The authors describe this change as:

It can be conceptualised as a highly sophisticated and intricate classification system, where infinitesimal categories will, ideally, attain perfection in a detailed multidimensional classification.

This differs from the typical diagnosis of PTSD, which doesn't really have a biological component, aside from anecdotal lifestyle questions about quality of sleep, exercise and diet.

To respond to your question:

Do I have to decide and make a checklist of parameters of the subject by which I can decide if that person has that disease, and how will someone go on about diagnosing the disorder after that.

It's not really a person making an individual checklist from thin air, but more about a collection of different cases being used to highlight individual differences.

One example of PP would be the clustering of Depression symptoms to choose the best anti-depressant medication, as described in "Reevaluating the Efficacy and Predictability of Antidepressant Treatments: A Symptom Clustering Approach" by Chekroud et al.

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Precision medicine (PM) is a medical model that proposes the customization of healthcare, with medical decisions, practices, or products being tailored to the individual patient.

Precision psychiatry is a sub-field of precision medicine - focusing specifically on individually tailored medical interventions for psychiatric disorders.

The practice of precision psychiatry does not necessarily suggest a different diagnosis for psychiatric disorders such as PTSD or a different diagnostic criteria or process. In fact, the diagnosis could very well remain the same.

Rather, precision medicine and psychiatry are concerned with customizing treatment. To this end, medical testing would need to be more extensive and more accurate / "precise". It is this additional testing, useful for tailoring treatment and monitoring its progress, that is the focus of precision psychiatry:

The major challenge that precision psychiatry faces is that psychiatry does not yet use measurement to track the equivalent of vitals and images of the organs of interest, namely the brain and alterations in peripheral measures such as blood.

A couple of good examples to consider are schizophrenia and depression.

Schizophrenia was traditionally divided into several symptom-based sub-types. This categorization was dropped recently, and early genetic research suggested quite different sub-types that might explain why the original sub-types did not work out. However, sub-types based on genetic profile clusters may also be untenable. Current research has revealed over 100 genetic loci contributing to schizophrenic symptoms, and suggesting the potential for custom treatments, as many medications have different targets. Here we have a single diagnosis of schizophrenia done in the traditional way, where additional genetic testing may guide individual treatment.

Depression - the core clinical symptom of major depressive disorder - has several potential treatment regimens, including a variety of medications, psychotherapies, brain stimulation, and alternative therapies such as light exposure and meditation, each of which appear moderately effective across the patient population. Recently however, some limited research has suggested that brain scans can help predict which therapy would be most effective for each individual. Here again, we have a standard diagnosis based on patient-reported symptoms, where the addition of brain scans may eventually guide individual treatment and monitoring.

In precision oncology for example (another sub-field of precision medicine), the classification of biomarkers and their corresponding treatments has sometimes led to differential diagnoses, and sometimes not. For example, breast cancer is known to have several different receptor biomarkers and corresponding treatments, but is not necessarily classified as different types of breast cancer because the biomarkers don't cluster - they are specific to the patient.

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I can't understand how to apply precision psychiatry in order to diagnose or predict a mental disorder, for eg. PTSD.

No one can, because precision psychiatry is pie in the sky right now. From the paper mentioned:

Considering that no single biomarker will probably define any psychiatric disorder as defined by traditional diagnostic boundaries, it will be essential to pursue in parallel theory- and data-driven discovery approaches to delineate the multivariate and combinatorial profiles of biomarkers (across units of analysis) that account for the heterogeneity of mental illnesses as they manifest clinically.

And if we simply talk about individualized treatments, the older term personalized psychiatry covers it just as well. There has been some terminological debate in the NRC, hence the old new thing.

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