Main findings

This study projected the national costs of depression and other mental and behavioural disorders through lost PLYs among people aged 45–64 years to increase over the next 15 years. For depression, these costs consisted of a 45% increase in lost income (which grew faster than the 22% growth in social security payments as a result of the indexation of these payments being less than expected wages growth), a 45% increase in lost income tax revenue, and a 34% increase in lost GDP from 2015 to 2030.

These indirect costs are in addition to the direct costs of mental illness. The direct (healthcare) cost of mental illness was estimated to be AU$8.5 billion for all age groups in 2014–15, which covered mental health spending in hospitals, out-of-hospital, pharmaceuticals and community services.⁴ However, it should be noted that only 62% of people with mental illness actually seek help from healthcare professionals/medical facilities in Australia^{Reference Andrews, Hall, Teesson and Henderson17} and thus the direct costs would be greater if there were sufficient services available to meet that higher demand. Significant other spending also occurs for housing and accommodation, employment and disability services for those with mental illness.^{Reference Lee, Chatterton, Magnus, Mohebbi, Le and Mihalopoulos8,Reference Neil, Carr, Mihalopoulos, Andrew Mackinnon and Morgan9}

Limitations

This study does have some limitations. First, the findings are derived from respondents' self-reported labour market behaviour and whether they have mental illness or not. Despite self-reported employment status and health in general being considered as valid measures for these types of studies,^{Reference Cai and Kalb18} there is the potential for bias in results. Second, the findings on the indirect costs of mental illness presented in this paper are for a single country (Australia). However, we also make the point that these findings demonstrate how microsimulation modelling can be used to obtain estimates of the number of people in a population effected by mental illness and their (and the government's) costs and that concerns about the direct and indirect costs of mental illness are relevant to OECD countries.²

Comparison with findings from other studies

Other studies have estimated the costs of lost labour force participation as a result of mental illness as the number of lost work days, lost earnings or the amount of disability support payments.^{Reference McCrone, Dhanasiri, Patel, Knapp and Lawton-Smith7–Reference Neil, Carr, Mihalopoulos, Andrew Mackinnon and Morgan9,Reference Goetzel, Hawkins, Ozminkowski and Wang19} However, these studies are limited in scope compared with the current study; for example, they did not include all (and count specific) social security payments and lost GDP. They have a number of other limitations, including only using average earnings to estimate the cost to individuals or average of total support payments to estimate the cost to government. Such average measures may not be representative of the actual economic circumstances of the population with mental illness. Our study used individual-level income, taxes paid and social security payments to estimate the costs to individuals from exiting the labour market as a result of either depression or other mental and behavioural disorders. The study by Lee et al ^{Reference Lee, Chatterton, Magnus, Mohebbi, Le and Mihalopoulos8} reports similar estimates of the costs of lost productivity and lost taxes for mental illness when considering the entire group (i.e. those with depression and other behavioural disorders). However, there is a notable difference in the estimates of the cost of welfare payments between these studies, which is likely to stem from the lack of detailed information about the type of pensions and allowances received by individuals that comprises the income of this group (and hence the use of an average value of welfare benefits) in Lee et al.^{Reference Lee, Chatterton, Magnus, Mohebbi, Le and Mihalopoulos8} Finally, the previous studies (with the exception of McCrone et al ^{Reference McCrone, Dhanasiri, Patel, Knapp and Lawton-Smith7}) did not use a study design (such as microsimulation) enabling estimation of the long-term costs of mental illness.

Implications

Despite the significant increase in government spending on mental health services over the past 25 years,^{4,Reference Lee, Chatterton, Magnus, Mohebbi, Le and Mihalopoulos8,Reference Neil, Carr, Mihalopoulos, Andrew Mackinnon and Morgan9} the costs are continuing to surge. This circumstance adds credence to the government expanding its investment in prevention as well as maintaining support strategies for mental illness. The government is likely to further benefit from these strategies through the reduction in adverse health, family, and work consequences (such as preventing the loss of income tax and payroll tax); reduced social security payments; and reduced spending on other services (such as healthcare, education, housing and the justice system).

Despite strong economic growth and a low national unemployment rate, Australia has some of the lowest employment rates for people with mental illness among the OECD. For example, the employment gap between people who have mental health problems and those who do not in Australia is about 20 percentage points – a gap wider than in any of the other eight OECD countries involved in the OECD's ninth and last review of what these countries are doing to tackle the broader health, education, social and labour market policy challenges in relation to mental illness among the working-age population.²⁰ Australians effected by mental illness are also three times more likely to be unemployed than those who have no mental health problems and are overrepresented in all benefit schemes. Even when they do have jobs, people with mental illness often struggle with more and longer periods of sickness absence and underperformance at work.²⁰ Thus Australia's labour market and related structures may not be adequately supporting the employment of people with mental illness.

For these reasons, the Australian Federal Government has put forward a multifaceted strategy with the main goals being: the prevention and early detection of mental illness; greater assistance for individuals to better understand and manage their mental illness; the elimination of discrimination, and assistance for employers and work colleagues in becoming more aware of the value of workers with mental illness; the government helping where necessary with the costs of modifying workplaces and enhancing access to education and training; and helping individuals with mental illness to remain connected with society.²¹ Since the strategy involves the government working with a range of stakeholders and institutions, a cross-portfolio approach is necessary in order to achieve improvements in mental health outcomes and generate the kind of opportunities needed for people to experience ‘a contributing life’ that includes employment, housing and social connectedness.²¹ A similar approach has been adopted in other OECD countries; for example, the UK has been operating a ‘cross-government’ mental health outcomes plan called ‘No health without mental health’ since 2011.²²

Interventions

A recent systematic meta-review assessing the effectiveness of workplace interventions for the prevention, treatment or rehabilitation of workers diagnosed with depression, anxiety or both mental illnesses^{Reference Joyce, Modini, Christensen, Mykletun, Bryant and Mitchell23} found that the quality of evidence was moderate for two primary prevention interventions: enhancing the worker's control, and encouraging physical activity. Higher-quality evidence was found for cognitive–behavioural therapy (CBT)-based stress management; however, poorer-quality evidence was found for other secondary prevention interventions (such as counselling). Tertiary interventions with a particular focus on improving labour force participation or the nature of the individual's employment status (such as exposure therapy and CBT-based and problem-focused return to work interventions) generated high-quality evidence for improving the symptoms of depression, anxiety or both illnesses and moderate evidence for improving occupational outcomes. In short, this review demonstrated that there is reliable empirical evidence for the effectiveness of interventions implemented in the workplace that could be used more widely to help in the prevention of depression, anxiety or both illnesses, as well as assisting with the recovery of workers diagnosed with these illnesses.

The costs of mental illness to individuals are not only sizeable but potentially perpetuating. The lower labour force participation rate for people with mental illness means that they are also more susceptible to falling into poverty not only in their prime working-age years but also in retirement as a result of lack of accumulated savings. Consequently, mental illness can generate a lifetime of social and economic marginalisation.²² Thus assisting people with mental illness to participate in the labour force through effective workplace interventions (such as those detailed in Joyce et al ^{Reference Joyce, Modini, Christensen, Mykletun, Bryant and Mitchell23}), along with the government taking a cross-portfolio approach to assist people with mental illness across various aspects of their lives (such as housing, education and work), will not only help them to achieve greater economic well-being, but also enable them to experience greater social connectedness with additional positive mental health outcomes.

Scaling-up government initiatives to tackle mental illness

It is important to note that the significant costs of depression and other mental and behavioural disorders are incurred in low-, medium- and high-income countries. A recent study has quantified not only the direct (medical treatment) costs and health outcomes but also some of the indirect costs attributable to depression and anxiety disorders in 36 low-, middle- and high-income countries from 2016 to 2030.^{Reference Chisholm, Sweeny, Sheehan, Rasmussen, Smit and Cuijpers24} The estimated costs of scaling-up effective medical treatment coverage for depression and anxiety disorders (mainly counselling and antidepressant medication) totalled US$147 billion. However, the benefits of this investment were shown to significantly outweigh these treatment costs. For instance, a 5% improvement in labour force participation and productivity was estimated to be worth US$399 billion, and improvements in health (measured as healthy life-years) contributed a further US$310 billion in benefits.^{Reference Chisholm, Sweeny, Sheehan, Rasmussen, Smit and Cuijpers24} However, these type of large-scale benefits will only be possible if the level of national investment in mental health services is increased to match the level of national need. The WHO's Mental Health Atlas Survey for 2014 suggests that governments are currently spending, on average, 3% of their total health budgets on mental health, with allocations ranging from less than 1% in low-income countries to 5% in high-income countries.²⁵ In order to reduce the significant societal costs of depression and other mental and behavioural disorders projected for low, medium- and high-income countries if current investment levels remain, both the WHO and the World Bank have commenced initiatives to assist countries with scaling-up their investments – placing investment in effective treatment for mental disorders at the centre of the global development agenda.²⁶

From a global perspective, it would also be informative to know if similar results occurred in other OECD nations or developing nations. With growth in the development and use of microsimulation models across the world, these issues may be the focus of future research that may support and generalise the results of the current study even further.