(I offer the following anecdote about the Baal Shem Tov for what it can tell us about Hasidic teaching regarding healing. Rebbe Nachman of Breslav’s grandmother, Adil, sometimes written ‘Udil;’ corresponds to ‘Adele’, was the daughter of the Baal Shem Tov. Rebbe Nachman was therefore the Besht’s great-grandson. He told the following story about the Besht:)
One of the Baal Shem Tov’s followers was sick and very weak. He sent someone to the Baal Shem Tov to ask him to come. The messenger went to the Baal Shem Tov and explained that the man was sick and asked him to come. The Baal Shem Tov went.
On the journey, the messenger said to the Baal Shem Tov, “I have heard you say that when a person repents completely, it is certain that he will not die before his time. This sick man would seen to have repented completely and he is surely a good Jew. He is not very old yet — so why hasn’t he been cured?”
The Baal Shem Tov replied, “True, this is what I said, and it is undoubtedly so. And it is [also] certainly correct that this sick man has repented completely for all his sins. The reason he has not yet been cured is because he has not confessed his sins to a true Tzaddik. The reason I am going to him is to give him the opportunity to do so. If he confesses he will be cured immediately. But if he doesn’t want to confess, his condition will immediately deteriorate and he will start screaming with pain. He will feel pain in all his limbs, his hands and his fee, and then he will doe. It is true that in the higher worlds — the supernal Court of Judgment — there is not a single sin or transgression against him, because he has repented completely for all his sins, exactly as one should. After his death the forces of evil will have no grip on him at all, seeing that he has rectified all the damage he did. If he confesses before me he will be cured immediately. But if he does not confess, the forces of evil will still have the power to take vengeance on him in this world. They will attack all his limbs until he dies.”
And so it was. The Baal Shem Tov came to the sick man and said, “Tell me what you know and God knows and I also know” — i.e. he should confess all his sins to him [the Besht]. The Baal Shem Tov said this to him three times. However, the man was unwilling to confess. Immediately, he started screaming with agony. He felt pain in each limb in turn, and he cried out bitterly. The pain was because all the bones in each limb started breaking up. The man carried on screaming like this until he died, as the Baal Shem Tov said he would… 
In fact, “repentance” usually includes “confession” in rabbinic literature (e.g. “Gates of Repentance” by R. Yonah of Gerona).
In this story, “repentance” does not necessarily include “confession.” It suggests that the man engaged in some kind of self-examination to determine what he might have been doing wrong, made up for it and resolved not to do so again. Or — if “confession” is included, it was a “private” confession between the ill man and God. No other person is involved. The ill man is called a “good Jew,” which might have been a “frum” (Orthodox) Jew in the original Yiddish. The anecdote seems to distinguish between those who follow the prescribed format of repentance and those who add self-transformation to that, by confessing to a “true Tzaddik.”
“Self-examination” is already mentioned in the Talmud, particularly with regard to suffering: “If suffering comes on a person, let him examine his actions.” 
Freud famously demonstrated that some symptoms/illnesses can be traced to feelings and emotional conflicts buried in the mind and heart. The “cure” in these cases was for the patient (or “client” as they would be called today) to bring the buried feeling to awareness and resolve the inner conflict in a process that involved talking with the psychoanalyst/psychotherapist, which in turn could lead to a reduction or disappearance of the health- or behavioral issue. Nowhere to my knowledge did Freud suggest that any and all diseases could be eased by this method.
Rabbi Morris Lichtenstein taught self-examination, particularly regarding attitudes and emotions, as an element of healing from any disease or physical problem:
“…when one experiences the approach of any ailment, he should earnestly interrogate himself, ‘Does my mind shelter worry and fear? Am I filled with bitterness or anger? Am I poisoned by hatred or envy?’ To these and many other scrutinies must one submit himself in order to discover the root of his illness and discomfort…” 
Rabbi Lichtenstein doesn’t mention “confession,” although if one were working with a trained “practitioner,” there might be some discussion of the underlying feelings.
“Confession” is also an essential of any “12-step Program,” beginning with Alcoholics Anonymous (itself based to some extent on the teachings and practices of “The Oxford Group”):
“‘Step Five: Admitted to God, to ourselves and to another human being the exact nature of our wrongs.’
…When we are honest with another person, it confirms that we have been honest with ourselves and with God.” 
“Complementary Medicine,” which can include self-examination of the emotional basis of one’s illness, is now an accepted part of the approach to healing. Even Harvard University has a chair in this field.
Yet, the Baal Shem Tov, according to Rebbe Nachman’s anecdote, gave one more specification: Beyond self-examination, the ailing penitent must not only confess his sins, but do so to a “true Tzaddik.”
Why confess to “a true Tzaddik?”
I think that by “Tzaddik,” the Baal Shem Tov meant one who had thoroughly surrendered himself (or herself) to God and no longer recognized any separation from God. He didn’t mean the leader of a specific Hasidic dynasty, as that concept came after the Besht. By confessing to the “true Tzaddik,” we participate in that Tzaddik’s own union with God. “True Tzaddik” also sounds more like a Rebbe Nachman-term than a Besht-term.
It’s interesting in this regard that the Baal Shem Tov tells the man: “Tell me what you know and God knows and I also know…” The man must keep no secret. There must be no more separation in the man’s mind between what he knows, what God knows and what the Tzaddik — the Besht — knows; no separation between the man, God and the Tzaddik.
It seems to say that the ultimate source of illness, like misfortune, is disharmony between ourselves and the Divine. Even if we have “repented” — examined ourselves, made reparations for what we’ve harmed and resolved not to do so again — it is still necessary step for us to be re-harmonized with our own Higher Mind: the Divine Source of our very lives.
The Besht said that having repented, the man would be at peace in “the higher worlds” but would suffer in this world if he did not confess to a true Tzaddik. The suggestion — a very Hasidic one — is that without such confession, God’s Presence, in this case manifested as healing, cannot be fully expressed in this world. The expression of God’s Presence in this world is the heart of Hasidut.
 Rabbi Nathan of Nemirov; The Tzaddik; A Portrait of Rabbi Nachman; A. Greenbaum, trans.; Breslov Research Institute, © 1987, p. 181-2
 Brachot 5a
 Lichtenstein, Rabbi Morris; Jewish Science and Health; © 1925 by Rabbi Morris Lichtenstein; p. 60
 The Twelve Steps and the Twelve Traditions; © 1953 by Alcoholics Anonymous World Services; p. 60
This chapter goes into a broader, deeper discussion of the purpose and value of confession