He bore the primary responsibility for treatment of mental health patients and drug dependent clients via controversial deep sleep therapy and other methods at the Chelmsworth Private Hospital in the Sydney North Shore suburb of Pennant Hills where he was its principal.

[4] From December 1954, he spent fifteen months on a World Health Organization fellowship in North America and Europe, where he observed the sedation techniques, psychosurgery, and electroconvulsive therapy methods of Ewan Cameron in Canada, William Sargant in the UK, and Lars Leksell in Sweden.

[4] Whereas most of his compatriots who specialized in psychiatry sought out their advanced further training in Britain, Bailey worked in Louisiana with Robert Heath of Tulane University.

He also studied electroconvulsive therapy and surgical and pharmacological care under Sir William Trethowan and Cedric Howell Swanton back in Australia.

Bailey likened the treatment to switching off a television; his self-developed theory was that the brain, by shutting down for an extended period, would "unlearn" habits that led to depression, addiction and other psychiatric conditions.