The economic costs of mental illness…

The evidence gathered is compelling. Over the next 20 years, NCDs (non communicable diseases) will cost more than US$ 30 trillion, representing 48% of global GDP in 2010, and pushing millions of people below the poverty line. Mental health conditions alone will account for the loss of an additional US$ 16.1 trillion over this time span, with dramatic impact on productivity and quality of life.


The above statistic found by the World Economic Forum is frightening. Mental illness  is essentially being demonstrated as being one of the biggest global economic risks in our generation. $16tn is a huge figure. If we factor in other diseases, such as cardiovascular disease, diabetes, cancers, respiratory diseases etc, we reach a net potential GDP loss of $30tn.

It has been found that cardiovascular diseases and mental illness will have the greatest economic burden, and there is no surprise since stress, anxiety, depression and cardiovascular problems are very closely linked. The WHO have said:

These NCD-driven concerns are markedly higher than those reported for the communicable diseases of HIV/AIDS, malaria and tuberculosis.

However, the ‘fix’ for non mental issues are in fact an economically ‘cheap’.

A recent World Health Organization report underlines that population-based measures for reducing tobacco and harmful alcohol use, as well as unhealthy diet and physical inactivity, are estimated to cost US$ 2 billion per year for all low- and middle-income countries, which in fact translates to less than US$ 0.40 per person.

Mental illness treatment, on the other hand, face much higher costs of scaling up to improve the situation drastically.

The new study calculated treatment costs and health outcomes in 36 low-, middle- and high-income countries for the 15 years from 2016-2030. The estimated costs of scaling up treatment, primarily psychosocial counselling and antidepressant medication, amounted to US$ 147 billion. Yet the returns far outweigh the costs. A 5% improvement in labour force participation and productivity is valued at US$ 399 billion, and improved health adds another US$ 310 billion in returns.

However, current investment in mental health services is far lower than what is needed. According to WHO’s “Mental Health Atlas 2014” survey, governments spend on average 3% of their health budgets on mental health, ranging from less than 1% in low-income countries to 5% in high-income countries.

Source: The Lancet Psychiatry, April 2016

The scaling up figure adds up to roughly $3.7bn extra having to be spent (merely an average of the sample and not country specific).

The Lancet found the following:

The net present value of investment needed over the period 2016–30 to substantially scale up effective treatment coverage for depression and anxiety disorders is estimated to be US$147 billion. The expected returns to this investment are also substantial. In terms of health impact, scaled-up treatment leads to 43 million extra years of healthy life over the scale-up period. Placing an economic value on these healthy life-years produces a net present value of $310 billion. As well as these intrinsic benefits associated with improved health, scaled-up treatment of common mental disorders also leads to large economic productivity gains (a net present value of $230 billion for scaled-up depression treatment and $169 billion for anxiety disorders). Across country income groups, resulting benefit to cost ratios amount to 2·3–3·0 to 1 when economic benefits only are considered, and 3·3–5·7 to 1 when the value of health returns is also included.

Note that the above figures are per year. These figures are also only for 36 of 195 countries.

What are the actual economic effects of mental illness on the economy?

The first and most important is that people take themselves out of work. This firstly decreases productivity whereby you have output decreases, whether short term absenteeism or longer term removal from the workforce, but also increases the dependency on the welfare system, whereby the government spends more on healthcare, receives less in income tax (assuming the person has taken themselves fully out of work), spends more on unemployment welfare and receives less on VAT where those out of work have less disposable income to spend on goods and services.

In a previous article, about why Trump won, I wrote about the increase in pain killer medication consumption between 2008 and now:

43.5% of men not in labour participation had taken pain killer medication the day before surveyed. This is over double those of employed men. The stat among women is not as great, but employed women are on long term pain killer medication at a greater proportion when employed, lesser so when not in the labour force. Staggeringly, 2/3 were complaining of emotional pain, depression or tiredness.


6% of prime age working men, therefore, believe that they are too ill to be able to work. Since 1968, that figure has quadrupled, where the rate was 1.8%:


The trend for women is different. We have seen a social change where women have dropped out of housework and entered the labour force which has masked the rise in women reporting being ill or disabled and taking themselves out of the labour force:


I would argue that there is a strong causation between being long term unemployed, depression and the consumption of prescription pain medication. However please don’t take this as fact, as it has not been tested.

For the Lancet Commission on Investing in health, the value of a 1 year increase in life expectancy in low-income and middle-income countries was estimated to be 2·3 times per person national income, and 1·6 times per person national income worldwide

Previously I had compared cost of treatment to other NCDs such as treatment of obesity and smoking & drinking. However, individual treatments for mental illnesses are still quite low when compared to country health budgets:

After standardising for population size, the cost is actually quite low; for depression treatment, the average annual cost during 15 years of scaled-up investment is $0·08 per person in low-income countries, $0·34 in lower middle-income countries, $1·12 in upper middle-income countries and $3·89 in high-income countries (table 2). Per person costs for anxiety disorders are nearly half that of depression.

The cost:benefit of treating mental illness, however, is far less that communicable disease:

For example, a return on investment analysis for malaria, also for 2016–30, but using the full value of a statistical life-year, estimated benefit to cost ratios in the range of 28:1 to 40:1.37 An investment case done for maternal, reproductive, neonatal, and child health obtained a benefit to cost ratio of less than 10:1 for 2013–35,36 which is closer to the results obtained in this study. Inclusion of other benefi ts arising from scaled-up treatment of common mental disorders that could not be captured though the present modelling exercise, notably reduced welfare support payments, and improved outcomes for other affected people (eg, partners and children of women with perinatal depression) would generate higher ratios of benefi t to cost

Source: World Health Organization on behalf of the Roll Back Malaria Partnership Secretariat. Action and Investment to defeat Malaria 2016–2030: For a Malaria-Free World. 2015. World Health Organization, Geneva

This could be one reason a to why more isn’t spent on mental illness treatment. Governments are unable to see black and white statistics based on cost:benefit analysis. With malaria, you can treat with vaccines; to decrease infant mortality, you improve the post natal care, ensure the child is vaccinated and improve the conditions of which the mother gives birth in. But with mental health it is no where near as binary. You cannot simply take a pill and be cured. There are various different ways in which people can be treated, and some cost more than others. A government policy maker would look to optimise as best possible, and at the current stage, there are a lot of external unseen variables that are hard to factor in to health care provision (as horrible as that sounds).

However, I believe that government spending on mental illnesses will increase when the benefits of treating a mental health condition is proven to provide benefit to other non communicable diseases such as cardiovascular disease.

From the data shown, it is clear that we are faced with a burden of non communicable disease. One criticism that I would have of what I read is that I think that mental illness can have a greater causation toward other NCDs in which the cost:benefit ration should be greater. I know it was mentioned in once of the sources but I feel the link could go further, especially as a stream to push policy makers to spend more on mental health.


One thought on “The economic costs of mental illness…

  1. Pingback: The economic costs of mental illness… — David Belle FX – CFDs Education

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