For the past several months, we have been discussing the economics of mental health. We have seen how the costs are varied and widespread, affecting sectors outside of traditional health care industries, with the estimated cost to the Canadian economy expected to be $2.5 trillion by 2041. (Deloitte, 2019) We have also established that mental illnesses are not limited to a small, predisposed population; they impact almost everyone in some way. In Canada, by the time a person has reached the age of 40, one in two people will have or have had a mental illness. (Mental Health Commission of Canada, 2013)
The gaps that continue to exist in mental health services have had, and continue to have, a substantial effect on productivity in the workplace and by extension, economic growth. Bartrum (2017) cites a report from the Conference Board of Canada that estimates that the Canadian economy could gain up to $49.6 billion annually if every Canadian who is employed with depression or anxiety received optimal treatment.
Now, we turn our attention to funding budgets for mental health services, as well as the return on investment (ROI) of initiatives that have been implemented in Canada and around the world.
Mental Health Budgets: A Brief Historical Overview
Historically, mental illness and health care have been surrounded by stigma and deemed too expensive despite its high prevalence and were considered low priorities for federal funding. In 1957, for example, there was debate around whether to even include mental health facilities in the Hospital Insurance and Diagnostic Services Act, because mental hospitals were already funded by provincial governments. Moving forward to 1984, the Canada Health Act did not require coverage of provincial health insurance to include anything beyond doctor consultations and hospital stays. The 1990’s saw funding for a limited number of mental health related pilots, and in the 2004 Health Accord, only short-term acute mental health homecare was included. This lack of dedicated federal support obviously increases pressure on provincial governments to narrow the funding gap, but provincial support has also been historically low. (Bartrum, 2017)
The current state of investment in mental health care around the world continues to be disproportionate between the level of investment and the economic burden. As of 2013, many low- and middle-income countries allocated less than 2% of their total health budget to treatment and prevention of mental disorders. In addition to this, the funds that are made available by governments are often directed to the operational costs of medical facilities rather than clinics and community-based services. As of 2017, public spending on mental health in Canada was at 7% of the healthcare budget, which is up from the 4.8% that was spent in 2003. However, this is still notably less than the 18% that some other Organization for Economic Cooperation and Development (OECD) countries spend. (World Health Organization, 2013)
The most recent 2023 budget backtracked on promises made in 2021, with the $4.5 billion over five years of dedicated mental health funds changing to $2.5 billion annually over 10 years allocated to four health care priorities, with mental health being one of them. While this funding may see more mental health care provided by hospitals and clinics, it is not clear if it will address the rising demand for community-based mental health care. (Canadian Mental Health Association, 2023) The issue here is that people who are experiencing a mental health crisis have no where to go but the emergency department, which places a greater, and not to mention unnecessary, strain on hospitals.
At the provincial level, the Government of Alberta is including $92 million in funding for youth mental health over three years in the 2023 budget. This will see two new in-patient Child and Adolescent Services Association (CASA) house sites in Fort McMurray and Calgary, which will help over 700 additional youth in Alberta every year and reduce the need for hospital stays. The funding will also cover a CASA day program in 20 mental health classrooms across the province, helping at least 360 students in grades 4-12 every year. (Press, 2023) The ROI on youth interventions is discussed later in this article, but spoiler alert: it is the highest!
Limited access to free mental health and substance use health care is a significant challenge faced by Canadians. Public health insurance plans only cover services provided by physicians or in hospitals, leaving crucial treatments like psychotherapy, counseling, social work case management, eating disorder treatment, and addiction recovery treatment to be paid for out of pocket. As a result, many Canadians are burdened with the cost of these services. In fact, each year, individuals in Canada collectively spend $1 billion on private counseling and psychotherapy. However, this leaves those who are unable to afford such expenses without viable options for obtaining necessary mental health support. (Bollman, 2023 & Higgins, 2023)
Corporate Spending on Mental Health
The economic burden of mental illnesses doesn’t only affect public institutions; the Centre for Mental Health in the Workplace claims that the economic cost of mental illness is equivalent to 20% of corporate profits. (Roberts, 2011) Deloitte conducted a study in 2019 on mental health initiatives in the private sector, examining ten companies: Air Canada, ATB Financial, Bell, Canada Life, CIBC, Desjardins Group, Enbridge Inc., Energir, Husky Energy, and Morneau Shepell.
Source: Bell Canada
Source: Deloitte Analysis
Among these companies, seven had at least three years' worth of data on mental health initiative investments, which was considered sufficient for a worthwhile ROI analysis.
The study revealed that programs tend to yield greater returns the longer they are implemented. For the seven companies with three years of active programs, the median yearly ROI for their mental health programs was $1.62. This figure increased to at least $2.18 when the program had been active for more than three years. The study emphasized the importance of allowing initiatives sufficient time (ideally at least three years) to settle and integrate into corporate culture as immediate results are rare.
If mental health policy initiatives could reduce cases by an average of 10%, the expected annual savings would be $4 billion in direct costs after 10 years. After 30 years, the savings increase to $22.4 billion each year. Additionally, if remission rates were reduced by 10%, there would be another $5.3 billion annually on direct costs after 30 years. (Canadian Mental Health Association, 2023)
Even companies that have mental health programs in place but have not yet achieved a positive ROI may be realizing greater savings than the national average. Additionally, demonstrating a commitment to employees’ mental health and well-being is becoming increasingly more central to the company being one that employees, customers, and society in general are proud to support. (Canadian Mental Health Association, 2023)
Other Benefits for Corporations (Deloitte, 2019)
Overall Benefits (World Health Organization, 2013)
ROI on Current Initiatives:
988 Hotline: Starting on November 23, 2023, the federal government will fund the 998 suicide prevention hotline. Spending $158.4 million over three years, the hotline is expected to experience a significant number of calls, with callers being referred to appropriate local services. (Bollman, 2023) Because this is a brand-new service taking effect later this year, there is of course no data on ROI yet, but it will be interesting to see the results of this program.
Triple P Parenting Program: This is considered to be one of the most successful youth programs in the world. The cost of implementing it in Alberta is estimated to be $3.78 million. The program currently diverts around 25% of cases for a net savings of $7.6 million. Fun fact: for the program to cover its own costs, it only needs to divert 1.6% of cases. (Mental Health Commission of Canada, 2013)
Family Support Programs: Parent education and family support programs, such as home visits and early childhood education, have been shown to yield better outcomes for individuals dealing with mental health issues, such as depression and anxiety. The ROI for these programs ranges from $1.80 to $17.07 for every dollar invested. (Mental Health Commission of Canada, 2013)
Psychosis Interventions: These programs found that their participants were more likely to be in paid employment than their peers who had not been through the program. Additionally, the health care costs to treat each person were approximately $3,500 for those in the program versus $9,800 for those who did not participate, or $6,300 less per year per participant. (Mental Health Commission of Canada, 2013)
Peer Support Programs: A research study in Ontario on outcomes following a long-term hospital stay evaluated the impact of transitional discharge planning combined with peer support. Individuals in the group receiving peer support were discharged on average 116 days sooner from hospital than the control group who did not have access to this program, resulting in an estimated savings of $12 million. (Mental Health Commission of Canada, 2013)
The most impactful investments in terms of ROI are those that focus on children and adolescents, specifically targeting conduct disorders, depression, parenting, anti-bullying, suicide awareness and prevention, and health promotion in schools, with ROIs ranging from $1.80 to $17.07 for every dollar spent. Furthermore, a study conducted in the United States found that effective programs for juvenile offenders yielded the highest net benefit, with estimates ranging from US$1900 to US$31,200 per youth.
For more detailed information and a comprehensive overview of the ROI and estimated ROI for various interventions, you can refer to the report available at the following link: ROI Mental Health Report. The data is from 2003 to 2011 but still demonstrates the importance of these interventions.
A Global Perspective on the ROI of Mental Health Initiatives
In 2016, Chrisholm et al. conducted a global ROI analysis and evaluated treatment costs and health outcomes in 36 countries from 2016 to an estimated 2030. These 36 countries represent all six major regions of the World Health Organization (WHO), accounting for 80% of the world's population and 80% of the global burden of depression and anxiety disorders. The approach involved an assumed linear increase in treatment coverage and incorporated a 5% improvement in work ability and productivity because of treatment. These improvements were then aligned with the prevailing rates of labour participation and gross domestic product per worker in each country.
The estimated net present value of the required investment from 2016 to 2030 to significantly expand effective treatment coverage for depression and anxiety disorders was US$147 billion. From a health perspective, the implementation of mental health initiatives would lead to an additional 43 million years of healthy-life over the scale-up period. By assigning an economic value to these healthy-life years, the study authors arrived at a net present value of US$310 billion. Furthermore, scaling up the treatment of common mental disorders also resulted in significant economic productivity gains, with a net present value of US$230 billion for scaled-up depression treatment and US$169 billion for anxiety disorders.
The benefits of good mental health encompass intrinsic values, such as improved mental well-being, and instrumental value, which pertains to the ability to form and maintain relationships, work, pursue leisure activities, and make everyday decisions. To assess the value of these benefits, the authors estimated the population in need within each country, then determined the health effects resulting from scaled-up coverage of effective interventions. The economic impact of improved mental health outcomes in terms of enhanced labour participation and productivity was then calculated.
After standardizing for population size, the cost per person was relatively low. Over the 15-year period of scaled-up investment, the average annual cost for depression amounted to US$0.08 per person in low-income countries, US$0.34 in lower middle-income countries, US$1.12 in upper-income countries, and US$3.89 in high-income countries, while the per-person costs for anxiety disorders are nearly half of that. (Chrisholm, 2016)
It is important to note that investments in mental health promotion and illness prevention often yield returns in different sectors than where the investments are made. So, taking a broader snapshot of gains made in areas such as education and judicial systems is essential in understanding the impact the investment is making. (Roberts, 2011)
Final Thoughts
Investing in mental health initiatives in Canada can bring a favourable return on investment. It improves health outcomes, boosts economic productivity, reduces social costs, and enhances quality of life. Considering the significant impact of mental health issues on the population, such investments have a positive effect on the entire country. And with reports that Canadian’s mental health is deteriorating due to the pandemic and subsequent financial stressors (Bollman, 2023), now is certainly the time to invest in mental health care. Choosing inaction and underinvestment in mental health will result in a continuous increase in the health, social, and economic burden.
Bibliography
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- Bollman, E. (2023). Retrieved from https://cpa.ca/Advocacy/
- Chisholm, D., Sweeny, K., Sheehan, P., Rasmussen, B., Smit, F., Cuijpers, P., & Saxena, S. (2016). Scaling-up treatment of depression and anxiety: a global return on investment analysis. The Lancet Psychiatry, 3(5), 415-424.
- Deloitte. (2019). The ROI in Workplace Mental Health Programs: Good for People, Good for Business. A Blueprint for Workplace Mental Health Programs. Deloitte Insights.
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