The Invisible Costs of Mental Health Conditions

It shouldn’t be surprising to learn that mental health risks are on the rise. In fact, mental health costs are rising twice as fast as all other medical expenses1 and the cost is adding up for employers. An employee with a mental health condition submits on average $14,967 per year in medical claims compared to $5,929 for the total population.1 While these costs are visible to an organization, there are also invisible costs associated with mental health that often go overlooked.

Indirect costs, such as absenteeism, presenteeism, and work disabilities often go unnoticed and are much more difficult to quantify. That doesn’t mean, however, that they aren’t costing the organization money. Depression has been found to be the leading cost of lost work hours, measured through absenteeism and presenteeism.2 One study shows that an employee with bipolar disorder accrues on average 65.5 lost workdays per worker per year with an annual per capita cost of $9,616 per employee, while someone with major depressive disorder loses 27.2 work days per year with a per capita cost of $4,426 per ill worker.3 This hidden cost could add up to an excessive amount of money for an organization due to a loss in productivity or inability to perform a job effectively as a result of a mental health condition.

What is Mental Health Really Costing You?

Unfortunately, many people with a mental health condition go untreated. People with untreated mental health conditions can struggle with physical, mental, and emotional impairments that can increase over time, while also increasing the healthcare costs of the employer. For example, the costs of depression and other mental health conditions are often underestimated because the indirect costs such as work absenteeism and poor performance at work (presenteeism) are costlier than the direct costs associated with medical care and prescription drugs.6 Research shows that promotion and prevention programs can mitigate the rate at which employees develop symptoms and mental health disorders.4 In addition, for every dollar spent on investment in a treatment program, an ROI of $2 - $4 is seen.5 Effective treatments can lower total medical costs, increase productivity, and reduce absenteeism.

What Are You Doing for Your Workforce?

While 97% of employees feel acknowledging mental health is important, only 68% of employers are described as being committed to the mental health of their employees5 and one in two employees would like to see their company focus more on mental health and well-being.7 This means organizations need to be doing more to protect the mental health of their employees. Organizations have the important task to communicate with their workforce about the benefits of mental health prevention and treatment, as well as providing them with the tools they need to improve their well-being. In the end, a successful mental health and well-being program will not only allow employees to live a happier and healthier lifestyle, but will also help provide a more productive workforce for the organization.

1. https://www.cnbc.com/2018/09/26/employers-are-starting-to-think-about-healthy-differently.html
2. https://www.samhsa.gov/data/sites/default/files/NSDUH-DetTabs-2016/NSDUH-DetTabs-2016.pdf
3. https://ajp.psychiatryonline.org/doi/full/10.1176/ajp.2006.163.9.1561 4. https://www.ncbi.nlm.nih.gov/pubmed/23136686
5. https://ceoroundtable.heart.org/mental-health-a-workforce-crisis-report/ 6. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5007565/
7. https://www.mercer.com/content/dam/mercer/attachments/global/webcasts/gl-2018-pdf-global-talent-trends-study-us-canada.pdf

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