Good Business Cents: Mental Health in the Workplace

Clare Miller

Clare Miller
Director, Partnership for Workplace Mental Health

Organizations like the Partnership for Workplace Mental Health and Families for Depression Awareness have long advocated for employers to address mental health in the workplace, citing both visible (e.g., disability payments) and hidden (e.g., lost productivity) costs of depression among employees. As we have previously discussed on this blog, the Affordable Care Act (ACA) requires that mental health care be included in health care coverage. As the ACA carries an affirmative obligation for certain employers  (50 or more employees) to provide health insurance, employers now have the opportunity to impact employees’ mental health broadly through proactive wellness programs and individually through their employee assistance plans and ultimately their health insurance programs.

In this post, Clare Miller explains the essential role of employers in advancing mental health and—even apart from the ACA—the critical reasons for employers to address the mental health needs of their employees.

Employers are an important constituency to engage in advancing mental health in the United States given their power in affecting how much and what kind of care employees and dependents actually receive. Indeed, about 157 million Americans receive coverage through employer-sponsored health insurance.

Employers are getting more involved in healthcare because many realize that employees are their most important asset—their human capital. They’re also focused on healthcare because it is such an enormous expense, as evidenced by the oft-quoted fact that General Motors spends more on healthcare than on steel.

Many employers realize that they can use their purchasing dollars to leverage the healthcare system to demand better quality. And demanding it they are; employers are pushing strategies such as value-based purchasing and outcomes-based contracting. They are aligning incentives to produce better outcomes, as in the case of value-based benefit designs, where copayments might be lowered or eliminated to encourage people to access care and services to manage chronic illnesses.

One of the first examples of this approach was focused on diabetes management. A large employer eliminated the copayments associated with diabetes medication after realizing that high cost-sharing was leading workers to forgo medication, which led to increased hospitalization costs. In response, the employer aligned incentives to be sure that workers could afford the treatment to appropriately manage their condition. Importantly, they married this strategy with others, such as patient education about diabetes management.

Employers Can’t Afford to Ignore Mental Health

The Partnership for Workplace Mental Health, a program of the American Psychiatric Foundation, works with employers to be sure that mental health gets the attention it deserves. Our message: you can’t afford to ignore mental health.

If you look only at healthcare claims, behavioral health can be a small percentage of an employer’s healthcare costs. But the impact of mental health issues on the bottom line is huge when you add up all the indirect costs, such as absenteeism and lost productivity.

I use the analogy of the iceberg, with the part visible above the water representing behavioral health claims, and the huge ominous part below the surface representing all those indirect costs.iceberg

This isn’t chump change: mental illness and substance use disorders cost employers an estimated $80 to $100 billion annually in indirect costs alone. Mental illness causes more days of work loss and work impairment than arthritis, asthma, back pain, diabetes, hypertension, and heart disease.

The good news is that good treatment results in a positive return on investment. Research documents that treatment improves work performance and productivity. Treatment for depression, for example, results in a 40–60% reduction in absenteeism and presenteeism (when employees come to work but aren’t productive.)

The Partnership actively promotes tools to employers to help them quantify the business case associated with addressing mental health, such as calculators to determine the impact of depression and substance use disorders. If you haven’t seen these cool tools yet, I encourage you to check them out:

An employer plugs the company’s demographics into the tool, including size, industry type, and location; then, the tool provides a report detailing how the condition affects their bottom line, including all of those indirect costs below the surface of the iceberg.

Employers Take Action

When I started this work, I spent a lot of time educating people about depression and talking about the business reasons to pay attention to mental health. More and more, employers understand that people are able to get the help they need, and they are looking for strategies that work to make a difference in motivating people to get help. In short, they are ready to take action to help their employees, and they are hungry for ideas that work.

The Partnership finds practical examples of what companies are doing and we tell those stories. The Partnership’s website and quarterly magazine, Mental Health Works, features how leading companies are approaching prevention, employee education, behavioral health benefits, and disability management to improve mental health.

One of the employers you can read about is the Chesapeake Energy Corporation. A natural gas and mining company headquartered in Oklahoma City, Chesapeake Energy Corporation enhanced mental health benefits, offered supportive education, and added early identification and referral components to their programs. Chesapeake launched a major communications campaign called “Your Life Matters” and regularly reaches out to the primary care physician community to improve quality of care.

Your Turn

How are you (or your employer) addressing mental health in the workplace? Comment below and tell us what’s working (or what’s not!)

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