The document discusses the high economic costs of mental illness and various interventions to reduce these costs. It notes that almost half of Americans will experience a mental health issue in their lifetime. Left untreated, mental illness leads to lost productivity from absenteeism and presenteeism, lower earnings, poverty, physical health issues, and suicide. Several interventions show promise such as increasing access to therapy, tailoring treatments, and addressing childhood mental health issues. However, more research is needed to determine the most effective and efficient solutions, yet research funding remains disproportionately low compared to the economic burden. Workplace reforms and greater access to mental healthcare, especially on college campuses, could also help address rising costs from mental illness.

1. The Concealed Costs of Mental Illness, How to Uncover and Eradicate Them
Katherine Gallagher
Behavioral Economics
Professor Schulz
December 7, 2015

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In the United States, almost every one in two people will suffer from depression,
anxiety disorders or another mental ailment at some point in their life (Scientific
American). Mental health is a global issue that is costly for all countries, not just the
U.S. Mental health has no prejudices; it affects people of every race, ethnicity, religion,
age and socioeconomic status. Some people however are more prone to the illness than
others. There is no argument that mental illness has a profound affect on the economy. It
is a problem that must be addressed using some form of intervention. There are many
different practices taking place around the world in an attempt to reduce the direct and
indirect costs of mental illness. The best course of action, however, is yet to be
determined.
The scale of the costs created by mental health issues is astounding. “It accounts
for over 15% of the disease burden in developed countries, which is more than the
disease burden caused by all cancers” (Cyhlarova, et al.). In order to discuss the
magnitude of the burden accrued by mental health cost; one must first understand the
measures of mental illness costs. There are two types of direct consequences of
production lost because of mental health: absenteeism and presenteeism. Absenteeism is
when people call off of work due to illness. In the UK, self-reported depression is the
most important cause of absenteeism. This means that people call off work mostly
because they are dealing with depression rather than physical illness. This amounts to
£8.4bn in estimated cost of absence annually. Another factor of lost production is
presenteeism. Presenteeism is the idea that people come to work but are much less
productive because they are dealing with illness. They estimate that this amounts to
£15.1bn for reduced productivity when at work (Cyhlarova). In Canada, these costs

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amount to $6 billion annually (Lopez-Pacheco). In a study conducted in Alberta, they
found that 8.2% of workers in the study were getting treatment for mental illness, but
38.8% had a diagnosable disease (including anxiety, major depression, phobias and
antisocial personality disorder) and were in need of treatment. Leaving these people
without treatment has compounding affects on the economy. “Nationwide, there is an
annual cost of $193.2 billion in lost earnings due to mental health conditions, not
including the many hidden and indirect costs associated with poor mental health”
(Bethea).
There are additional costs due to untreated mental illness, but many of them are
immeasurable. People that struggle with mental health are much less efficient than
people that are emotionally stable. Individuals struggling with mental health are much
less likely to complete school and will therefore earn lower wages if and when they do
enter the labor force. People that have lower earnings or are unemployed have difficulty
seeking and affording sufficient mental healthcare, usually worsening their symptoms
(Bethea). This creates a vicious cycle in which one can never leave because he or she is
too mentally ill. People living below the poverty line are already at a disadvantage when
it comes to mental health; about every one in six adults living just above the poverty line
or lower has severe mental illness. These individuals have difficulty finding and keeping
a job and they do not qualify for disability so they receive no mental healthcare. “A
recent large study in California found that only 32 percent of uninsured residents with
mental illnesses received any treatment at all and that less than 12 percent got adequate
help” (Scientific American). Left untreated, mental health issues can manifest into

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trouble with addiction, substance abuse and physical ailments creating even more
unforeseen costs.
Mental illnesses often manifest themselves before people enter the workforce.
NAMI on campus states that 1 in 5 students have a mental health condition in college,
usually presenting for the first time leaving students unequipped to deal with these issues
in their new environment full of new people and experiences. This is not a small
percentage of people about to enter the job market that will be less efficient because of
their mental illnesses. Suicide is one of the top 15 killers in America for adults and in the
top 3 for teens and children. 90 percent of suicide cases can be attributed to mental
illness (Scientific American). Many children, even younger than college age, also suffer
from mental illness but are rarely treated effectively. Little funding is being allocated for
research of illnesses amongst children.
The best way to diminish the mental health costs is to find an acceptable
intervention. All round the world, countries are searching for the most efficient
intervention. According to the Scientific American, “By 2002, 29 states had mandated
that health insurance packages cover mental illness on the same terms as physical illness,
and in those states the suicide rate fell by an average of 5 percent.” Already the
interventions were successful and with more funding for research the results can improve
dramatically.
Some believe that specific interventions within the community and healthcare
sectors will solve the issues of mental health. By encouraging health professionals to
diagnose patients early, patients begin to receive the care the need before they have
spiraled into the vicious cycle from which they can never return. If the providers

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coordinate with social programs like homeless shelters and food pantries, perhaps they
can help the people living below the poverty line to get them back on track. Another way
to help low income patients would be to create community health centers in areas with
high rates of mental illness, but that still may not be enough to help everyone. The new
healthcare reforms-The Patient Protection and Affordable Care Act-that President Barack
Obama enacted in 2010 may be able to help with the lack of volume of care needed. The
new reform makes it mandatory that every insurance plan has “behavioral health”
coverage. This includes mental health and addiction and substance abuse help, as an
“essential health benefit.” This program allows 3.7 million Americans to receive new
benefits involving mental health in 2014 that they were not receiving before (Scientific
American). The new healthcare plan seems to be helpful in giving mental healthcare to
people that did not have any care before. However, of the people that already had the
option of care, this plan does not affect their situation much. Still more needs to be done.
If we can discover a way to track mental health progress after interventions, perhaps we
would be able to target the best intervention. Overall, the world needs to spread mental
health awareness and reduce stigma so that people can begin to receive care for illnesses
in an attempt to prevent severe issues in the future.
Modifications to the workplace environment and healthcare from employers have
been proven to be effective interventions. The Financial Post found that costs to firms
decreased by 15-33% when mental health issues were addressed by specific
interventions. Aside from lowering costs, interventions can improve happiness,
productivity, moral and long term benefits within a company. “Researchers at the Centre
for Applied Research in Mental Health and Addiction (CARMHA) have identified 13

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psychosocial risk factors that can lead to an unhealthy, high-stress environment, which is
to mental health what hazardous and unsafe workplaces were in the past to physical
health. These factors include the way deadlines, workloads and work methods are
handled, as well as the context in which work occurs, including relationships and
interactions with managers and supervisors, co-workers and customers” (Lopez-
Pacheco). By altering behaviors in each individual company, we can allow every
individual to have a more positive work experience. This is not enough to solve the
problem of mental illness, but it is definitely a helpful beginning.
Another way to cut economic burden from mental health is to deal with the root
of some problems first, that is, to start with children. Nearly 6% of adolescents and
young adults have conduct disorder. “Conduct disorder is a repetitive and persistent
pattern of behavior in children and adolescents in which the rights of others or basic
social rules are violated. The child or adolescent usually exhibits these behavior patterns
in a variety of settings—at home, at school, and in social situations—and they cause
significant impairment in his or her social, academic, and family functioning” (Mental
Health America). Of children diagnosed with conduct disorder, 30% end up committing
a crime sometime in their life, costing 22 billion pounds a year. “In a case study of
conduct disorders it was estimated that preventing conduct disorders in the most
disturbed children would save around £150,000 of life time costs per case (i.e. £5.25
billion in the UK), and promoting positive mental health in children with moderate
mental health would yield lifetime benefits of around £75,000 per case (£23.625 billion
in the UK)” (Cyhlarova, et al.). A small cost to help improve treatment for children with
conduct disorder can save a country billions of dollars.

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Cyhlarova and colleagues also discovered that improving access to psychological
therapies for depression and anxiety and increasing investment in evidence-based
therapies would be effective intervention strategies. The cost of standard therapy is
relatively low but the pay offs are very high. They witnessed about a 50% recovery rate
in their study of people receiving therapies. The therapy virtually pays for itself in only a
few years. Therapy is such an effective treatment. Perhaps with more research they
would be able to apply these types of therapies to other mental illnesses and reduce costs
even further.
In an attempt to improve drug administration, researchers are trying to figure out
which type of drugs helps which people. This “prevents people from taking medications,
which are not the most effective, take longer to alleviate symptoms and cause severe side
effects” (Cyhlarova, et al.). They are conducting this research using the methods of
neuroimaging and genetics. In a study in the UK they found that certain markers in the
brain could be imaged and deciphered by the doctor to allocate which type of
antidepressant will be most effective for any individual. This innovation could lead to
fewer costs from trying to find a drug that works for a patient. The less time it takes to
find an effective drug, the sooner a patient can be back at work and productive again.
For any of these interventions to make their way into society, they must be proven
efficient. In order to do that, more research must be conducted. Currently, there is
disproportionality between the economic burden (cost) and funding for research to lessen
the burden. “In France the impact [of the burden] is 5.7% of GDP but budget for
research is less than 2% of health research even though mental health affects 20% of
population” (Cyhlarova, et al.). By funding more research the burden can be minimized

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dramatically. In the same study, they discovered that the rate of return on public or
charitable mental health research was 37%. That is an amazing return on investment, one
that economists should jump at. Funding research is the only way to cut mental
healthcare costs.
As someone that is newly entering the work force, I believe we need workplace
reform if we want people to continue being productive in their professions while
suffering from mental illnesses. In America there is a stigma for taking a day off from
work. Working people expect one another to work as much and as well as they can at all
times. We have an idea in our heads of the perfect professional that comes to work bright
and early in the morning, stays till after the sun goes down and is working like crazy the
entire time he or she is in the office. This is an unattainable goal for any working person
let alone someone suffering with mental illness. For people that struggle with anxiety
disorders, this high stress work situation is a nightmare. We need to change the story and
allow people to take the time off when they need to. Everybody needs a break some of
the time. Instead of working people until the breaking point, we should allow people to
take a day off to collect themselves every once in a while to keep their mental health in
check. If we do so, workers will come back to work more refreshed, productive and
overall happier. Companies also need to include mental healthcare into their health
insurance plans. Therapy is such an effective intervention. If employees had access to
the proper care, the company would make back the money it spent on the insurance in
fewer missed days of work for its employees let alone the definite increase in
productivity.

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The outrageous number of preventable suicides in young people is another
indicator that the mental healthcare system for children and college students needs to be
reformed. Children are not getting the attention and care that they need. When children
do not get the proper mental health care, they grow up to have even more difficulty, not
only with their disease, but also in all aspects of their lives. If children were screened
more thoroughly, perhaps the children will get the proper care that they need and lead a
healthier, more productive life.
Sometimes a mental health disorder will not present itself until later in a person’s
life, after adolescence. Many diseases present themselves after the age of 18. At this
age, young adults are usually going to college and moving away from home. These
students are experiencing drastic changes in their lives. The stress of all the new
experiences compounded by a new disorder is extremely challenging to deal with and one
they have never dealt with before, let alone by themselves. The best intervention that a
student can receive at this stage in their diagnosis and in this stage of their lives is
support. Most universities do not have the resources to help the one in five students that
suffer with mental illness. Universities need to allocate more funding for mental
healthcare: for counselors and support groups. 20% of the student body is afflicted, there
are students suffering that do not even know that they have options. Campuses need to
create more awareness of the resources that the college does have and make them more
accessible to the entire student body. Even if a college cannot afford to hire more trained
professionals to counsel students, they should set up student led support groups so that
students know they are not alone to deal with their illnesses.

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Mental health is a cost to the economy that can no longer be ignored. There are
many great ideas on how to deal with this problem, but little evidence to support the most
efficient option. The only way to find the answers to the mental health cost problem is to
fund more research. Once the most effective intervention is discovered, the entire mental
health system can be reformed to give the mentally ill the care they so desperately need.

11. 10
Works Cited
Bethea, Brittaney Jewel. Mental Health Conditions Negatively Affect Social and
Economic Opportunity | Newsroom | Washington University in St. Louis.
Washington University in St. Louis. N.p., 16 Oct. 2013. Web. 09 Nov. 2015.
Conduct Disorder. Mental Health America. N.p., n.d. Web. 08 Dec. 2015.
Cyhlarova, Eva, Andrew McCulloch, Peter McGuffin, and Til Wykes. Economic
Burden of Mental Illness Cannot Be Tackled without Research Investment.
(n.d.): n. pag. Mental Health Foundation, Nov. 2010. Web. 9 Nov. 2015.
Lopez-Pacheco, Alexandra. Mental Illness Adversely Affecting Canada's Economic
Potential. Financial Post Mental Illness Adversely Affecting Canada’s Economic
potential. Financial Post, 5 Feb. 2013. Web. 09 Nov. 2015.
NAMI on Campus Because Mental Health Matters. NAMI: National Alliance on
Mental Illness. Web. 09 Nov. 2015.
Steinke, Claudia, PhD, RN, and Ali Dastmalchian, PhD. The Economic Impacts
Workplace Mental Illness and Substance Use. Visions Journal 5.3 (2009): 6. The
Economic Impacts. Web. 09 Nov. 2015.
The Editors. The Neglect of Mental Illness Exacts a Huge Toll, Human and Economic.
Scientific American Global RSS. N.p., 1 Mar. 2012. Web. 09 Nov. 2015.
Thompson, Angus H., Philip Jacobs, and Carolyn S. Dewa. The Alberta Survey of
Addictive Behaviours and Mental Health in the Workforce: 2009. Tech. Alberta:
Institute of Health Economics, 2011. Print.