Economic Costs of Mental Disorders and Problem Substance Use
Mental illness is common all over the globe. Worldwide, the percentage of people with psychiatric disorders is growing faster than the percentage of people with heart disease. On average, people who have mental health and substance use issues make up one-fifth of people who are ill around the world.
In Canada, one in five people face a serious mental or behavioural disorder at some point in their lives. A recent study showed that 2.2 million Canadians over 15 years old experienced such problems over the period of one year. That’s more than 10 per cent of the general population. Their disorders included major depression, mania disorder, anxiety disorders, or issues with alcohol or other drugs.
Mental and substance use disorders place a heavy burden on health care systems in Canada. However, their impact goes far beyond the costs of health and social services. These illnesses strain the mental, social and economic well-being of the sick person. They also affect the person’s family and friends, the community, and society as a whole.
Readers, please note: the content of this document is technical in nature, and is geared toward policy makers and members of the public who are particularly interested in how mental disorders and substance use issues affect the economy.
Population-Based Estimates of Total Costs of Mental Illness in Canada
The economic costs associated with mental illness fall into two main categories. These include the direct costs related to health services and indirect costs linked to loss of productivity and quality of life. Recently, researchers presented the most complete estimates to date of the total costs of mental illness in Canada (Table 1).
Table 1: Economic Burden of Mental Illness, Canada (millions of $)
diagnosed cases
|
undiagnoses cases
|
total
|
per cent of total burden
| |
direct medical costs
|
3,518
|
1,447
|
4,965
|
9.8%
|
dollar value of work loss
(short-term disability) |
8,383
|
68
|
8,454
|
16.6%
|
dollar value of work loss
(long-term disability) |
5,724
|
3,551
|
9,275
|
18.2%
|
dollar value of loss of quality of life
|
18,750
|
9,403
|
28,153
|
55.4%
|
total burden
|
36,378
|
14,469
|
50,847
|
100%
|
source: Lim et al., 2008 | ||||
As these data show, the total cost of mental illness in Canada was about $51 billion for one year. Direct medical costs for both diagnosed and undiagnosed cases made up about 10 per cent of the total. Short- and long-term productivity losses made up nearly 35 per cent of the total. The dollar value of lost quality of life made up the remaining 55 per cent. It is significant to note that losses connected with undiagnosed cases of mental illness (which are often left out of these types of analyses) were valued at $14 billion, or nearly 30 per cent of the total costs.
Total Expenditures for Mental Health and Substance Use
Recently, total annual public health care costs for mental health and substance use disorders in Canada were estimated to be $5.56 billion for one year. In British Columbia, these costs amounted to $967 million. When expenses for private care and medical drugs were included, costs went up to $6.13 billion, with BC using $1.08 billion.
Compared with other provinces, BC devotes the highest share of its total public health care expenses to mental health and substance use at 8.0 per cent. The Canadian average is 6.1 per cent. Saskatchewan allots the smallest share to mental health and substance use at 4.4 per cent (shown below).
Figure 1: Percentage of Total Public Health Costs Devoted to Mental Health and Substance Use, Canadian Provinces
source: Jacobs, et al., 2008
Figure 2: Annual Public Health Care Costs for Mental Health and Substance Use per Person
source: Jacobs, et al., 2008
Acute-care hospital costs account for about 30 per cent of spending on mental health and substance use in BC. The remaining 70 per cent is divided between community care, physicians, medical drugs and addiction services, as shown in Table 2.
Acute-Care Hospital Costs of Mental Health and Substance Use in Canada
Recently, costs of acute hospital care for mental and behavioral disorders were estimated at $1.12 billion across Canada for one year. This is about 6.6 per cent of all acute-care hospital costs, which total around $17.04 billion.
According to the Canadian Centre on Health Information (CIHI), acute-care inpatient costs for mental and behavioral disorders are highest for people aged 15 to 44. They are second-highest for people from 45 to 64. It is important to note that most of the costs are from the two age groups that are most active economically.
One in seven hospitalizations in Canada involves a patient who has a mental or behaviour disorder. People with these issues are not only put in the hospital more often, they also stay in the hospital twice as long as other patients. Still, the number of people with mental or behavioural disorders being hospitalized is down from a decade ago. This is due to better treatments and the growth of outpatient services.
A recent study in BC showed that more than 27,000 people were hospitalized for mental health and substance use disorders in one year. This was about 7.5 per cent of the total number of hospitalizations for one year (359,000).
Table 2: Annual Public Health Care Costs Related to Mental Health and Substance Use, BC
costs (in millions)
|
Proportion of Total Public MH & SU Expenditures
| |
community care
|
$345.1
|
35.7%
|
hopsitals
|
29.8%
| |
general
|
$235.5
| |
psychiatric
|
$52.3
| |
physicians
|
$135.7
|
14.0%
|
pharmaceuticals
|
$134.8
|
13.9%
|
addication services
|
$64.0
|
6.6%
|
total:
|
$967.3
|
source: Jacobs, et al., 2008
Costs of Pharmacotherapy for Mental and Behavioral Disorders in Canada
Prescription and non-prescription drugs are the fastest-growing health care expense in this country. According to CIHI, prescription drug purchases cost about $25 billion per year. Mental health drugs make up a good part of that. Recently, total spending on prescription anti-depressant and anti-psychotic medicines amounted to $1.791 billion for one year. That is 9.4 per cent of total prescription drug spending.
In contrast, 26.2 per cent of total drug expenses went to cardiovascular drugs (e.g., high bloodpressure medications). Just over five per cent went to pain medications (e.g., opioid and nonsteroidal anti-inflammatory drugs).
Spending on antidepressant and antipsychotic drugs varies across Canada, as shown in the figures below. These figures are age-standardized, which means they account for age differences across the provinces.
As these figures show, for antidepressants, BC is five per cent below the national average for spending, and Nova Scotia is 29 per cent above the national average. For antipsychotic medications, BC is six per cent below the national average and Quebec is 30 per cent above it.
Figure 3: Age-Standardized Variation from the National Average Per Capita Spending on Antipsychotic Drugs by Province
Source: Morgan, et al., 2008; used by permission.
Figure 4: Age-Standardized Variation from the National Average Per Capita Spending on Antipsychotic Drugs by Province
Source: Morgan, et al., 2008; used by permission.
Costs of Harmful Substance Use
The use of alcohol, tobacco and other drugs is related to many negative health, social and economic consequences. Recent studies conducted in developed countries show that the cost of these consequences is huge. It ranges from one to four per cent of gross domestic product (GDP), depending on the country. For Canada it is between $10 and 40 billion per year.
The Canadian Centre on Substance Abuse estimates direct health care costs linked to alcohol, tobacco and illegal drugs are about $8.8 billion across the country. They put direct law enforcement and other costs at $6.7 billion. Indirect costs (productivity losses) are at $24.3 billion. The overall social costs of substance abuse, including indirect costs linked with premature death and disability, are a bit less than $40 billion. That is 4.1 per cent of Canada’s GDP.
The total costs of problem substance use in BC are estimated at about $6 billion. Tobacco accounts for around 39 per cent of this. Alcohol accounts for about 37 per cent, and the remaining 25 per cent is related to the use of illegal drugs. The largest cost component (61 per cent) is the economic cost of lost productivity because of early deaths and disability related to substance use.
For more information about the economic costs of mental disorders and harmful substance use, visit www.heretohelp.bc.ca.
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