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Economic Costs of Serious Mental Illness

Individually, we don’t much care about global or societal costs of our care. When we hear about the budget deficit or anything to do with healthcare costs in the billions, we tend to tune out.


Well, most of us simply can’t wrap our heads around such numbers. We deal in the $10s and $20s of everyday life, the $100 cable bill, and the $1,500 mortgage. Few of us know what tens of thousands of dollars looks like at a time, much less millions. Much less billions or trillians. When get to those numbers, it just becomes meaningless.

So my eyes tend to gloss over when people ramble on about “disease management” and savings of “billions of dollars” if only we could convince employers to better recognize that mental illness has a significant impact on their bottom line. Perhaps I’m just ignorant or short-sighted — I recognize that. But still, I just find it hard to make a convincing argument around large numbers, no matter how powerful the argument is.

Others, perhaps far wiser than I, have no such difficulties.

Thomas R. Insel, M.D., the Director of the National Institute of Mental Health, is one such person. He has an editorial in this month’s issue of the American Journal of Psychiatry describing the economic impact of mental illness in American society:

This issue of the Journal includes an important report by Kessler et al. (6) that focuses on one source of indirect costs: the costs from loss of earnings. The analysis is based on the National Comorbidity Survey Replication (NCS-R), a population-based epidemiological study of mental disorders. In this survey, data from nearly 5,000 individuals were used to estimate loss of earnings by comparing earnings in the previous 12 months of persons with mental disorders with 12-month earnings of persons without mental disorders. The analysis focused on individuals with serious mental illness. The results, based on a generalized linear model analysis, demonstrate a mean reduction in earnings of $16,306 in persons with serious mental illness (both with and without any earnings) and also that about 75% of the total reduction in earnings came from individuals who had some earnings in the prior year (versus those who did not have any earnings at all). By extrapolating these individual results to the general population, the authors estimated that serious mental illness is associated with an annual loss of earnings totaling $193.2 billion.

So he’s reminding us that the research shows, conservatively, American society is losing nearly $200 billion each year due to mental illness. Untreated mental illness. Ouch.

What are you and I to do about such numbers?

Not much. These are pleas from leaders on the national scene to implore insurance companies, health care companies, and employers to better identify, recognize and treat people who have mental disorders. The most common health concern amongst employers isn’t high blood pressure or cholesterol… It’s back pain and depression. Yes, depression is the second largest health concern amongst U.S. employers, and most don’t even know it.

At the end of the day, it’s up to employers to recognize these costs in absenteeism and presenteeism and offer their employees the benefits and resources to seek treatment for depression. Not just seek it, but encourage it.

Read the full editorial: Assessing the Economic Costs of Serious Mental Illness

Economic Costs of Serious Mental Illness

John M. Grohol, Psy.D.

Dr. John Grohol is the founder of Psych Central. He is a psychologist, author, researcher, and expert in mental health online, and has been writing about online behavior, mental health and psychology issues since 1995. Dr. Grohol has a Master's degree and doctorate in clinical psychology from Nova Southeastern University. Dr. Grohol sits on the editorial board of the journal Computers in Human Behavior and is a founding board member of the Society for Participatory Medicine. You can learn more about Dr. John Grohol here.

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APA Reference
Grohol, J. (2018). Economic Costs of Serious Mental Illness. Psych Central. Retrieved on September 29, 2020, from
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Last updated: 8 Jul 2018 (Originally: 4 Jun 2008)
Last reviewed: By a member of our scientific advisory board on 8 Jul 2018
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