HOMEMental Health TopicsDepressionQuantifying the Cost of Depression

Quantifying the Cost of Depression

Key Findings

  • Approximately 6-7% of full-time U.S. workers experienced major depression (MDD) within the past year.

  • The total economic burden of MDD is now estimated to be $210.5 billion per year.

  • For every dollar spent on MDD direct costs in 2010, an additional $1.90 was spent on MDD-related indirect costs.

An important study reveals just how vulnerable the work environment is to the financial impact of depression.

Major depressive disorder (MDD) is estimated to affect around 16 million Americans (Substance Abuse and Mental Health Services Administration [SAMHSA], 2013) and, according to the World Health Organization, is the leading cause of disability worldwide (World Health Organization 2012). Among In the U.S. workforce, the prevalence of MDD has been estimated at 7.6% (Birnbaum et al., 2010). Major depression is a psychiatric disorder that goes beyond the normal human experiences of sadness. It encompasses a broad range of symptoms such as feeling worthless, having thoughts of suicide, losing interest in most or all activities, experiencing a significant reduction or increase in appetite or sleep, and having difficulty concentrating. Symptoms must be distressing to the individual or lead to an inability to function normally, such as at work or in maintaining relationships.

Depression can result in reduced educational attainment, lower earning potential, increased chance of teenage childbearing, higher unemployment, and increased work disability (Kessler, 2012). This study, authored by experts in economics and psychiatric epidemiology, provides a new look at the scope and scale of the financial burden of MDD to employers.

Eye-Opening Figures

Published in the Journal of Clinical Psychiatry, the study from Greenberg and colleagues (2015) examined trends in costs associated with MDD. Investigators used data spanning from 2005, when the country’s economy and job markets were generally considered robust, to 2010, following the U.S. financial downturn that characterized much of 2007-2009.

Among their major findings is that the total economic burden of MDD is now estimated to be $210.5 billion per year, representing a 21.5% increase from $173.2 billion per year in 2005. Of particular interest is that nearly half (48%-50%) of these costs are attributed to the workplace, including absenteeism (missed days from work) and presenteeism (reduced productivity while at work), whereas 45%-47% are due to direct medical costs (e.g., outpatient and inpatient medical services, pharmacy costs), which are shared by employers, employees, and society. About 5% of the total expenditures are related to suicide.

Presenteeism appears to be a particularly large drain, eating up 77% of MDD’s workplace spending and 37% of the overall $210.5 billion (Greenberg et al., 2015). Presenteeism costs increased 21.5% from $64.7 billion in 2005 to $78.7 billion in 2010; absenteeism, on the other hand, rose only 8.3%, from $21.5 billion to $23.3 billion. Presenteeism associated with depression resulted in the equivalent of 32 incremental workdays lost. The authors estimated presenteeism by calculating 6.1 times the cost of absenteeism due to illness or injury, which is consistent with previous approaches in the literature (Stewart et al., 2003).

Labor force participation from 2005 to2010 was also more variable for persons with depression (Greenberg et al., 2015). During the economic “boom” years (from 2005 to 2007), individuals with MDD demonstrated good levels of employability. Once the “bust” of 2007 hit, however, people with MDD were disproportionately affected in terms of employment status, particularly individuals ages 50 years and older. In 2010, the rate of full-time employment for persons with MDD was 10.3 percentage points lower than the rate of full-time employment for persons without MDD. In 2005, that same difference was only 8.7 percentage points. After the economic decline, the rate of individuals not employed (i.e., those not working or not looking for a job) increased by 6.2% for persons with depression, but increased only 3.8% among persons without the disorder.

Looking Beyond Depression

Another alarming finding concerns the financial burden of the medical conditions that commonly occur alongside depression (Greenberg et al. 2015). Only 38% of the total costs of MDD were attributable to the disorder itself; the remaining 62% were incurred from direct and indirect costs from co-occurring disorders, such as anxiety disorders; adjustment disorder; posttraumatic stress disorder; and non-psychiatric medical conditions, including chronic pain and sleep disturbance. For every dollar spent on MDD direct costs in 2010, an additional $1.90 was spent on MDD-related indirect costs, including workplace spending. By comparison, $4.70 was spent on direct and indirect costs of MDD’s neighboring illnesses. Regarding the workplace specifically, for every dollar of direct costs spent on MDD, $1.55 was spent on MDD workplace costs, but $2.13 was spent on MDD comorbidity-related workplace costs.

Clearly, the concern for depression in the workplace should extend beyond that of the disorder itself to its associated conditions that often require medical treatment, produce disability, and interfere with occupational functioning. This raises important considerations about secondary benefits of treating depression by potentially mitigating the effects of concurrent disorders, which could be impactful given their prominent contribution to depression’s economic footprint. Greenberg et al. (2015) have noted that the treatment rate of MDD was low in both 2005 and 2010, likely adding to the negative dollar figures they observed. Managing MDD, they speculate, could conceivably shift indirect costs (e.g., workplace expenditures) to direct ones (e.g., spending on treatment), since the treatment rate of depression is currently low.

Pinpointing Who Is at Risk

It has been estimated that approximately 6%-7% of full-time U.S. workers have experienced major depression within the past year (Kessler et al., 2008; SASMHSA, Office of Applied Studies, 2007). Coupled with data linking depression in workers to disability, absenteeism, and reduced productivity (Birnbaum et al., 2010), all employers should be concerned with depression.

But some studies have sought to answer the additional question, should some industries be more concerned than others about MDD? The National Survey on Drug Use and Health (SAMHSA, 2007) is conducted by the Substance Abuse and Mental Health Services Administration and administered to approximately 70,000 randomly selected US residents. Data collected from 2004 to 2007 indicated that, among full-time employed respondents, the greatest rates of past-year major depressive episode were among individuals in personal care and service industries (at a rate of 10.8%) and in food service and preparation industries (at 10.3%).

A related and more recent study (Wulsin et al., 2014) attempted to answer the same question but took a different approach by examining trends in health insurance claims data. Lead investigator Lawson Wulsin, MD, professor at the University of Cincinnati’s Department of Psychiatry and Behavioral Neuroscience, and colleagues at the National Institute for Occupational Safety and Health analyzed group medical claims databases to identify rates of clinical depression claims during a 4-year period among 55 industries in western Pennsylvania.

“We found that rates for clinical depression in these 55 industries ranged from 6.9% to 16.2%, while the overall population rate of depression was 10.45%,” said Wulsin. “Industries with the highest rates tended to be those which, on the national level, require frequent or difficult interactions with the public or clients, have high levels of stress, and low levels of physical activity.”

Such occupations included:

  • local and interurban passenger transit (e.g., bus, rail, subway),

  • real estate,

  • social services,

  • miscellaneous manufacturing industries,

  • personal services (e.g., laundry, photography, beauty shops),

  • legal services, environmental quality and housing (e.g., air, water, and solid waste management), and

  • membership organizations (e.g., labor unions, professional membership organizations).

The study is the first of its kind to publish data about depression rates by industry based on actual health care claims.

“Our methods point toward the potential utility for high-risk industries of analyzing claims databases to assess the degree to which depression might be present in their employees,” Wulsin noted. “However, before our approach can be applied to guide development of workplace depression risk-reduction efforts, further research will be needed. This includes the need for data demonstrating the value of our approach across different geographical regions and using current data on active employees.”

Additional research will be needed to better understand outcomes associated with treatment claims from workers with depression, such as the quality of care received, impact of intervention on presenteeism and absenteeism, and whether or not accessing care is related to disability claims. Both the SAMHSA study (2007) and the claims study (Wulsin et al., 2014) have generated data that could prove useful for informing employer efforts in high-risk industries to decrease stigma and encourage help-seeking, as well as examine the quality of care being delivered to those that do access treatment.

Future research on cost containment efforts, including strategies for disease management and risk reduction, will need to account not only for the type of industry studied but also the significant economic burden imposed by MDD’s co-occurring physical and/or psychiatric conditions (Greenberg et al 2015). Treatment rates for U.S. adults with any mental disorder hover around 40% (Kessler et al., 2005; SAMHSA, 2014; Wang et al., 2005). Untreated depression appears to imperil the health and productivity of employees as well as companies and their financial livelihood (Birnbaum et al., 2010; Kessler, 2012). Clarifying the impact of treatment access and quality on workplace spending could potentially drive employer efforts to adopt depression care services and invest in the well-being of their workers.


Resources

Right Direction
Right Direction is a unique program that gives employers a menu of tools to talk about depression at the workplace. At the ready are educational resources, including a dedicated website, 12 unique posters, intranet content, e-mail templates, and PowerPoint presentations. Materials can be customized to reflect the organization’s branding and/or promote specific health resources.

ICU
ICU is a 5-minute educational video that uses the analogy of an intensive care unit to teach employees about emotional health and how to appropriately connect and support with distressed coworkers.

Both programs are designed to complement an employer’s existing mental health and wellness programs.

Emily A. Kuhl, PhD, is senior science writer at the American Psychiatric Association and is available at ekuhl@psych.org or 703-907-8618.

References

  • Birnbaum, H. G., Kessler, R. C., Kelley, D., Ben-Hamadi, R., Joish, V.N., & Greenberg, P. E. (2010). Employer burden of mild, moderate, and severe major depressive disorder: Mental health services utilization and costs, and work performance. Depression and Anxiety, 27, 78–89. doi: 10.1002/da.20580

  • Greenberg, P. E., Fournier, A. A., Sisitsky, T., Pike, C. T., & Kessler, R. C. (2015). The economic burden of adults with major depressive disorder in the United States (2005 and 2010). Journal of Clinical Psychiatry, 76, 155–162. doi: 10.4088/JCP.14m09298

  • Kessler, R. C. (2012). The costs of depression. Psychiatric Clinics of North America, 35, 1–14. doi: 10.1016/j.psc.2011.11.005

  • Kessler, R. C., Demler, O., Frank, R. G., Olfson, M., Pincus, H. A., Walters, E. E., . . . Zaslavsky, A. M. (2005). Prevalence and treatment of mental disorders, 1990 to 2003. New England Journal of Medicine, 352, 2515–2523.

  • Kessler, R. C., Merikangas, K. R., & Wang, P. S. (2008). The prevalence and correlates of workplace depression in the National Comorbidity Survey Replication. Journal of Occupational and Environmental Medicine, 50, 381–390.

  • Substance Abuse and Mental Health Services Administration, Office of Applied Studies. (2007, October 11). The NSDUH report: Depression among adults employed full-time, by occupational category. Rockville, MD: Author.

  • Substance Abuse and Mental Health Services Administration. (2013). Results from the 2012 National Survey on Drug Use and Health: Mental health findings, [NSDUH Series H-47, HHS Publication No. (SMA) 13-4805]. Rockville, MD: Author.

  • Substance Abuse and Mental Health Services Administration. (2014). Results from the 2013 National Survey on Drug Use and Health: Mental health findings, [NSDUH Series H-49, HHS Publication No. (SMA) 14-4887]. Rockville, MD: Author.

  • Wang, P. S., Lane, M., Olfson, M., Pincus, H. A., Wells, K.B., & Kessler, R. C. (2005). Twelve-month use of mental health services in the United States: Results from the National Comorbidity Survey Replication. Archives of General Psychiatry, 62, 629–640.

  • World Health Organization. (2012, October). Depression [Fact sheet no. 369].

  • Wulsin, L., Alterman, T., Bushnell, P. T., Li, J., & Shen, R. (2014). Prevalence rates for depression by industry: A claims database analysis. Social Psychiatry and Psychiatric Epidemiology, 49, 1805–21. doi: 10.1007/s00127-014-0891-3

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