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The Economic Impact of Mental Illness

Good mental health and well-being are fundamental to leading healthy and productive lives. To fully understand the far-reaching consequences of declining mental health for economies around the world, the economic impact of mental illness will be explained.

Over the past decades, diagnosed mental illnesses became much more prevalent and affect a significant percentage of people worldwide. Globally, over 10% of the population suffer from a mental health disorder. In the US the numbers are twice the global average, with one in five adults affected. 

Living with a mental health problem can contribute to worse educational outcomes, higher rates of unemployment, and poorer physical health, resulting in a significant impact on daily life.

As mentioned in our first article on the mental health landscape, the COVID‑19 crisis is amplifying existing problems impacting mental wellbeing, resulting in a rapidly growing number of warning signs of an impending Mental Health Tsunami. To fully understand the extent of this development, the disease burden and the economic impact of mental illness will be assessed in the following.

Measuring the disease burden

Health impacts are often measured in terms of total numbers of deaths, but a focus on mortality does not give a complete picture of the burden of disease borne by individuals in different populations. Measuring the health impact by mortality alone fails to capture the impact that mental health disorders have on an individual’s wellbeing and underestimates the overall burden. Hence, the overall burden of disease is assessed using the disability-adjusted life year (DALY), considering not only the mortality associated with a disorder, but also years lived with disability or health burden.

One DALY represents the loss of the equivalent of one year of full health. DALYs for a disease or health condition are the sum of the years of life lost due to premature mortality (YLLs) and the years lived with a disability (YLDs) due to prevalent cases of the disease or health condition in a population.

Mental illness: a major disease burden worldwide

Major depressive disorder (MDD) is one of the leading causes of years lived with disability and is further associated with substantial economic costs for society. In high-income countries, the 12-month prevalence of MDD is estimated at 5.1% with an annual incidence rate of 3%. This implies that close to 60% of the depressed cases are new cases, which underscores the importance of both treatment and prevention of depression to reduce its disease burden. In fact, even when assuming full coverage of evidence-based treatments, approximately only one third of the disease burden could be averted.

Overall, mental and addictive disorders have a considerable impact on disease burden, causing 7% of all global burden of disease as measured in DALYs and 19% of all years lived with disability.

The importance of prevention and treatment

Furthermore, although mental and addictive disorders are not listed as underlying causes of death on death certificates, they are associated with marked excess mortality, from injuries and other chronic diseases. Consequently, their impact on global health tends to be underestimated.

Despite the existence of complex relationships between mental disorders and premature mortality, some relationships, such as that between mental disorders and suicide, are well-established. Strong evidence indicates that improved prevention and treatment of major depression and alcohol and substance abuse can reduce suicide rates. 

As mental disorders have also been linked to higher rates of death caused by cardiovascular disease, stroke, diabetes mellitus, respiratory diseases, and some cancers, prevention and treatment strategies should be considered a high priority in the reform of health systems.

Economic impact of mental illness and work-related stress

The prevalence of mental health illness and the associated disease burden are increasing worldwide, with significant impacts on health and major social, human rights and economic consequences in countries around the world. Mental health disorders have not only negative consequences for the individual but affect families and the society as a whole. 

The World Health Organization estimates that depression and anxiety, two of the most common mental health conditions, cost the global economy US$ 1 trillion each year due to lost productivity.

Another important facet of mental health is work-related stress which has shown to be a major risk factor for psychological and physiological health consequences.

Pre-pandemic, up to 27% of the workforce in Europe suffered from elevated stress levels.

It is associated with substantial economic costs due to higher sick leave, lower work performance, staff turnover, and higher health care consumption and out-of-pocket payment. Absenteeism and presenteeism have found to be the major cost-drivers, often exceeding the costs of treatment.

The complexity of mental health consequences, assessing the related costs, and incomplete data make it difficult for researchers to provide an adequate estimation of associated overall costs. As an example, different research studies indicate that the estimated economic cost of work-related stress may lay anywhere from US $221.13 million to US $187 billion worldwide. 

The economic output loss is comparable to that of cardiovascular diseases

Overall, poor mental health was stated to cost the world economy approximately $2-5 trillion per year in poor health and reduced productivity in 2010. A number that is projected to rise to US$6 trillion by 2030. 

Trautmann et al. considered the economic output loss related to mental illness to be comparable to that of cardiovascular diseases, and higher than that of cancer, chronic respiratory diseases, and diabetes.

Even though the wide range of cost estimates demonstrates the impossible challenge of determining the exact numbers, the dimension of the burden on society becomes clear.

New ways to provide mental health care

Even before COVID-19, the prevalence of mental illness was increasing. 

The pandemic accelerated this development and has both short- and long-term implications for mental health, particularly for groups at risk of new or exacerbated mental health disorders and those facing barriers to accessing care.

As stated above, mental illness causes enormous economic costs, directly via costs in the healthcare system, and indirectly via productivity losses and impact on economic growth.

Promoting mental health and improving early diagnosis and treatment of those with mental problems would help the lives of millions of people. This effort would also contribute to stronger economic and employment conditions.

Digital mental health solutions are able to provide a broad, new range of different mental health tools for prevention and treatment. Given the evidence for the efficacy of psychological interventions to prevent mental illness, and the potential scalability and cost-effectiveness of digital interventions, making them accessible by establishing reliable and straightforward reimbursement pathways seems like a promising strategy to alleviate mental health’s disease burden in an affordable way and at scale.

We hope that this article was insightful for you! We will be sharing each of our articles on our LinkedIn page to further engage with the HelloBetter community. Hence, we invite you to share your perspective on this topic and post your experiences in the LinkedIn comments.

We are looking forward to exploring with all of you how digital mental health solutions will redefine the future of care.

About HelloBetter

HelloBetter is a global pioneer in the field of digital mental health. No other provider worldwide has conducted as many clinical studies on the effectiveness of its online mental health courses. With our unrivalled scientific expertise (30+ RCTs) and passion for supporting people with mental health problems, we have already helped tens of thousands of patients to lead better lives. Find out more about HelloBetter on our Company page.

With HelloBetter Insights we want to share our learnings and analysis with the broader mental healthcare community. Every week, we will survey the ecosystem, report on promising developments, but also highlight the tough challenges that the industry is facing.

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Our articles are written by psychologists and reviewed by psychotherapists.