Working With Depression, Part I:
The Business Case for Quality Mental Health Services
Mental health may seem intangible to some, but the bottom
line impact is very real — and very, very large.
Medical benefit costs are erupting, and now people want employers to establish
parity with mental health benefits. Are they out of their minds? Not really.
There's an undeniable logic to the proposition that healthy workers are more
productive than sick workers and that increased productivity creates competitive
advantage. There is also a near certainty that some of your workers suffer from
common mental illness. In any given year, about one in 10 American adults suffers
from depression. Between six and eight percent of all patients seen in general
medical practice are diagnosed as depressed, but — notwithstanding recent
reports of a sharp increase in depression treatment — only about a third
of patients suffering from clinical depression receive appropriate medication
or psychotherapy.
But how can employers know that they are getting good value from mental health
benefits? Is there a real productivity gain from effective treatment? Are there
potential paybacks in other areas? There is definitely a very large target of
opportunity. Mental disorders generate an immense cost burden. According to
the World Health Organization, mental illness is on par with heart disease and
cancer as a cause of disability. The direct costs of diagnosing and treating
mental disorders in the U.S. totaled approximately $71 billion in 1997. Lost
productivity and disability insurance accounted for an additional $75 billion.
A cascade of illness
Depression has a significant impact of overall health and utilization of health care services. A recent study conducted by the Health Enhancement Research Organization (HERO) asked the question: What is the additional medical expense generated by employees who exhibit any one of 10 common modifiable health risk factors? Those included smoking, sedentary lifestyle, high cholesterol, hypertension, poor diet, being overweight, excessive alcohol consumption, high blood glucose, high stress and depression.
The surprising result: Depression was the risk factor associated with the largest medical cost increase. Controlling for demographics and other risk factors, employees who reported being depressed were 70 percent more expensive in terms of their medical costs when compared to their non-depressed counterparts. Those who reported being highly stressed — and incapable of managing that stress — were 46 percent more costly than non-stressed workers. And employees who experienced both depression and high stress were 147 percent more expensive.
A MEDSTAT analysis of claims for patients having a depression diagnosis found that depression treatment accounted for only 28 percent of total health care expenditures. The rest of the money was spent treating physical ailments associated with depression. An analysis of data from 15,000 employees of a major U.S. corporation found that those treated for depression incurred annual per capita health and disability costs of $5,415 (in 1995 dollars), significantly more than the cost for hypertension and comparable to the cost of three other medical conditions examined. Employees with depressive illness plus any of the other conditions examined cost 1.7 times as much as those having the physical conditions alone (a figure directly comparable to the HERO findings). Depressive illness was also associated with about 10 annual sick days, significantly more than for any of the other conditions.
It's not always clear whether depression causes physical health problems or is a consequence of such problems. Most likely, the associations travel in both directions, but comorbidities associated with depression are considerable. For example, it now appears that depression is an important risk factor for heart disease, just as real as high blood pressure or cholesterol. A study conducted in Baltimore found that of 1,551 people who were free of heart disease, those who had a history of depression were four times as likely to suffer a heart attack as those not suffering from depression. Researchers in Montreal found that heart patients who were depressed were four times as likely to die within six months of having a heart attack as those who were not depressed.
Depressed workers who are also angry have been shown to have higher cholesterol levels. Depression may cause chronically elevated levels of stress hormones — such as cortisol and adrenaline — and the activation of the sympathetic nervous system (part of the "fight or flight" response), which can have harmful effects on the heart. These findings raise several concerns, since heart disease is not only the leading cause of death in the U.S., but also the most costly health condition faced by U.S. employers.
Eroding productivity
In terms of day-to-day functioning, researchers found that depressed patients functioned at very low levels, equivalent to those with coronary artery disease and lower yet than patients with hypertension, diabetes and arthritis. Of course, in addition to associated physical ailments, there are the debilitating symptoms of the disease itself. These include loss of appetite, lack of motivation, extreme sadness and suicidal thoughts. Thus, the symptoms of depression, singularly and in combination, can significantly impair a person's ability to function in the world.
They also generate economic losses that include absence from work, short-term disability costs, workers compensation claims, safety incidents, employee turnover and on-the-job impairment (sometimes referred to as presenteeism). Researchers have estimated that approximately three quarters of the depression cost burden is due to lost productivity and premature death by suicide.
Various researchers have attempted to estimate both absence and presenteeism costs associated with depression. For example, Harvard researchers found that people with depression were absent an extra quarter day per month and experienced significant work cut back (1.09 days more per month) when compared to those with no psychiatric problems. These researchers also determined that workers with depression experienced between 1.5 and 2.3 more short-term disability days than workers without depression over a 30-day period. This translated to a salary-equivalent productivity loss of between $182 and $395 — nearly equal to what would be spent for mental health treatment over that same time period.
Depression has also been associated with a decreased likelihood to return to work from disability. Researchers found that the greatest predictor of not returning to work following a disability episode was the presence of depression; 84 percent who did not return to work were diagnosed with depression (as a comorbid condition).
Other investigators have looked at on-the-job productivity losses when depressed workers are unable to focus adequately on the task at hand. Some have estimated that workers lose as much as 20 percent of their productivity because of poor concentration, memory lapses, indecisiveness, fatigue, apathy and lack of self-confidence.
In a landmark study, Wayne Burton at Bank One examined actual reductions in work performance for Visa credit card phone customer service agents. One risk factor examined was worker "distress." Approximately 32 percent of the workers were found to be at high distress levels. For those, the researchers calculated about 40 minutes lost per week due to absenteeism or short-term disability. On-the-job productivity losses for distressed workers were also higher than for non-distressed workers, averaging 4.72 hours per week.
In summary, the evidence indicates that depression imposes a significant health
and productivity cost burden to employers. What can a company do about it? The
companion
article assesses the effectiveness of treatment.
Ron Goetzel is director of the Cornell University Institute
for Health and Productivity Studies and vice president, consulting and applied
research for Medstat; where Ronald Ozminkowski is director, outcomes research
and econometrics; and Tami L. Mark is senior economist. Lloyd I. Sederer is
Executive Deputy Commissioner for Mental Hygiene for The City of New York. The
opinions expressed in this paper are the authors' and do not necessarily reflect
the opinions of Cornell University, Medstat or The American Psychiatric Association,
which funded preparation of this manuscript.
The authors wish to acknowledge the contributions of Alisa
B. Busch, M.D., M.S. who provided scholarly material for consideration.
More Business & Health Articles on This Topic:
Working
With Depression, Part II: Finding and Funding Effective Treatment (August
1, 2002)
A
World View of Mental Health in the Workforce (July/August 2000)
The
Realities of Mental Health Parity in the U.S. (July/August 2000)
Depression
in the Workforce (April 1, 2000)
Resource Links:
Cornell University Institute for
Health and Productivity Studies
http://www.ccpr.cornell.edu
Medstat
http://www.medstat.com
Health Enhancement Research Organization
(HERO)
http://www.the-hero.org/
World Strategic Partners/The Club of
Geneva
http://www.wspartners.com
World Health Organization
http://www.who.int/
American Psychiatric Association
http://www.psych.org/
Ron Goetzel. Working With Depression, Part I: The Case for Quality Mental Health Services. Business and Health 2002;9.
