Mental illness has a broad reach in the workplace. From corporate boardrooms and your accountant’s desk to the fields of star athletes, this set of diseases can take many forms. It doesn’t discriminate either. Mental illness affects men and women, rich and poor, entry-level staff to senior executives, young and old, and people of all races and ethnicities. The median age of onset for major depressive disorder, for instance, is 32 years. In other words, people are affected in their prime working years.
Employers are well aware that a healthy and happy workforce is critical to running a productive and successful business. This is one of the many reasons why they offer health care coverage in the first place. Among employees, mental illness, in particular, is serious, common and expensive. A report by the National Business Group on Health (NBGH) noted that mental illness and substance abuse result in an approximate loss of 217 million work days annually and comes in at a cost of $17 billion a year to employers. Hence, it has implications for a company’s bottom line. An article appearing in the journal Health Affairs showed that over the ten-year period of 1991-2001, 8.2 percent of full-time employed adults were diagnosed with a mental illness. Efforts in the past decade to more effectively identify, diagnose and treat and manage mental illness have likely caused an uptick in this figure, though.
Not only are direct costs incurred, but indirect ones as well. Yet this is where employers feel that the cost of mental illness is harder to measure. Presenteeism, absenteeism, turnover and low job satisfaction levels are elements that factor into these calculations. A recent research study by the Partnership for Workplace Mental Health, an initiative of the American Psychological Association, notes that these indirect costs account for approximately 70 percent of employers’ mental illness expenditures. Estimates of these indirect costs range from $79 billion to $105 billion per year nationally, according to the U.S. Department of Health & Human Services.
Clearly, there is a business case for employers to actively seek to improve mental health clinical outcomes and reduce overall costs.
Ignoring mental illness can be even costlier; individuals with untreated mental illness consume more medical services and are often diagnosed with costly and chronic co-morbid conditions. Employers should thus not limit access to behavioral health services but rather encourage and facilitate it; doing so will reduce long-term costs related to mental illness and other chronic conditions.
When it comes to addressing mental illness in the workplace, the most traditional interaction between employers and their employees is a health benefit plan. Yet until recently, employers were able to structure benefit plans so that medical benefits were provided inconsistent with mental health and substance use disorders benefits.
All that changed in 2008. In October of that year, Congress took action to end that practice. Both chambers approved legislation requiring all large group health plans – with 50 or more employees – to provide parity between medical and mental health and substance use disorders benefits. The law took full effect on January 1, 2011. Implementing mental health parity at firms was projected to be neither costly nor antithetical to employers’ workplace culture. The Congressional Budget Office – the non-partisan official budget scorekeeper for Congress – estimated that mental health parity would cause employer premiums to rise only 0.4 percent. And the aforementioned study by the Partnership for Workplace Health noted that most employers view equalizing medical and mental health benefits as being, “a good fit with the company’s workplace culture and/or company leadership values.”
Mental health parity is expected to confer myriad benefits to not only employees and their families but to the overall health system as well. While it is still too early to tell how the federal parity law will affect the marketplace, past experience in states – the veritable laboratories of democracy – with parity laws on the books has been relatively positive. What has been shown is that parity policies can indeed be effective at controlling costs while also not inciting employers to drop health care coverage offers.
Parity isn’t the only mechanism used to address mental illness in the workplace. Numerous other benefit design-related techniques are employed as well. These include enhancing the capabilities and scope of employee assistance programs (EAP), being innovative with absence management and disability programs, increasing health risk assessment completion rates, and being thoughtful about pharmacy benefits – e.g., incorporating a value-based insurance design. Integrating these services is essential to enhancing value for both the employer and employee.
The ultimate goal of this assemblage of mental health services is to keep employees healthy and productive; and employees should use these services. Evidence shows that employees who take advantage of behavioral health services are more productive, experience less disability leave and cost less. These outcomes benefit both employer and employee. Firms would have greater flexibility in their budgets to retain more employees – a much-needed dynamic in this current economic climate – and to perhaps even expand their business. Employees, on the other hand, would likely show higher levels of job satisfaction, be more upbeat both at work and home, and optimize their output. When employees’ mental illness progresses or is exacerbated – because of lack of access or inadequate support – no one benefits.
Yet because of the stigma often associated with mental illness or seeking behavioral health services, employees often forego these important features of their benefits package. Employers should thus take an active role in communicating the availability of these tools to their workers. Numerous avenues exist to accomplish this. Company health fairs, intranet, management training, and even word of mouth are suitable and have been proven successful.
Skyrocketing health care costs and rapidly changing marketplace dynamics are causing employers to take a serious look at their health benefits programs. Employers would be wise to not lose sight of how effectively addressing mental illness in the workplace contributes considerably to improving their employees’ clinical outcomes, reducing annual trend increases, and raising productivity and output. The synergism of federal health reform, innovative employer strategies and mental health parity will result in greater access to much-needed behavioral health services, a market trend that employers must embrace. Communicating these changes to employees and breaking down barriers attributed to stigma is a tactic fundamental to progress as well. Indeed, actively responding to the effects that mental illness has on a workforce can make a world of difference in a tight marketplace that is increasingly global and competitive.