The High Cost of Mental Illness

Mental illnesses make healthcare’s highest utilizers even more expensive.

Given the on-going shift towards identifying patients who are most costly to our healthcare system, and developing meaningful interventions to address this category of patients, it is important to recognize the role mental illnesses play in the most ill in our nation.

A recent study published in January 2016 issue of Health Affairs helps us understand exactly how significant these costs are. The study investigated the annual healthcare expenses of a subset of very high expense patients. The authors separated the patients into whose mental health treatment accounted for more than 50% of all expenses from the rest of the group.

For the high-cost patients who did not have a majority of their care directed towards treating mental illnesses, their annual cost was $23,681. That’s almost 2x the national average. For patients who did require a majority of their care to be oriented towards mental illnesses, their annual cost was $31,611 on average (approaching 3x our national average). 

So it turns out that even among the most expensive healthcare consumers, those with severe mental illnesses were meaningfully more expensive than those with limited mental illnesses. Nearly 50% more expensive.

As a result, we know that mental illnesses exacerbate costs and make treatment more difficult for patients and providers. So what do we do about it?

We can learn a decent amount by looking more closely at the study data:

  • The patients with high mental health costs were younger: 79% of those in the high-mental health cost category were under 60 years old. Only 40% of other expensive patients were under 60. Unlike cancer and heart disease which typically strike as we age, mental illnesses are most prevalent in young adults.
  • Perhaps tied to the point above, mental illnesses did not always co-occur with other chronic diseases. Among the study group that was investigated with high mental health costs, only 10% had a hospitalization for something other than a mental illness. This should not blunt the fact that mental illnesses makes other illnesses more expensive and complex.
  • Lastly, the costs of the interventions can be considerable given the inflation in overall expenses of high mental health cost patients. Given that there is a nearly $10,000/yr gap between the two groups studied here, there is room for innovation to reduce costs. Finding the right payors and providers who will benefit from cost reduction is a different challenge on its own. 

The opportunity to help patients and deliver better outcomes is wide open in mental health. This study adds to the mounting evidence that we have a lot of work to do, and that the impact it bigger than we may have thought.