An ill person can needlessly worsen his situation in one of two ways. He can mistakenly consider himself not to be ill, and fail to seek the doctors and the medicine he needs. The second is the opposite. His sickness might be severe, but he exacerbates his situation by considering himself even more sick than he really is and this leads to his giving up hope of ever being cured. He himself increases the damage of his sickness by his discouragement.
This is very important for a sick person to keep in mind. But it is also appropriate in the area of spiritual welfare. A person not aware of his faults and failings will not work on self-improvement. But if he over exaggerates the extent of his negative qualities and behavior, he will become discouraged and his discouragement will prevent him from improving.
Sources: Chosen Yehoshua 1:8; Rabbi Zelig Pliskin’s “Gateway to Happiness,” p.378