The author suggests that the experience of continuous hospitalization may be assimilated into the patient's defenses against anxiety in such a way as to motivate him to remain in the institution. A return to the outer world is seen as a threat to the lower level of ego integration achieved in the hospital. The ego secures three gains from hospitalization. 1. Relief from anxiety resulting from failure of the ego to control instinctual impulses. The hospital provides external controls. 2. Secondary gain or the regressive instinctual gratification resulting from being sick. 3. Ego satisfaction from becoming an accepted member of a social organization. Psychotic behavior may be exhibited as a defense against being returned to the outer world. The institution is a refuge for the weak ego unable to master the stresses of the real world. The patient must be made aware of the defense. Therapy must seek to convert dependency on the hospital into a general confidence that help in the real world will be available if needed. Adjustment to the outside world must be made as a better substitute for the hospital.