Report: Spending on mental health services increased significantly from 2013 to 2020

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Overall employer and employee spending on mental health services as a percentage of total spending increased from 6.8% in 2013 to 8.2% in 2020, a further report found. Employers and employees spent nearly $77 billion on mental health disorders in 2020, the researchers estimated.

The Employee Benefits Research Institute (EBRI) released the report on Tuesday. The researchers used the MarketScan Commercial Claims and Encounters database to conduct the study.

Mental health issues have become more prevalent in recent years: the percentage of people under 65 with employment-based health coverage diagnosed with a mental health disorder rose to 18.5% in 2020, compared to 14.2% in 2013.

Unsurprisingly, employees are also using mental health services more than they did in the past. The percentage of enrollees using outpatient services increased from 12% in 2013 to 16% in 2020. The percentage of those using prescription drugs increased from 19% to 21% over the same period. However, inpatient services remained the same, with 0.3% of employees using the services.

“The Covid-19 pandemic has exacerbated mental health issues nationally and in the workplace. With the increase in the number of people diagnosed with mental health disorders and the increase in the use of health services, the increase in expenses is a big concern for plan sponsors of health benefit programs, ”said Paul Fronstin, Director of Health Benefits Research at EBRI.

Other key findings from the report:

  • For workers with diagnosed mental health conditions, average annual employee and employer spending on mental health services increased from $1,987 in 2013 to $2,380 in 2020, an overall increase of 20% and a increase of 3% per year.
  • For people with diagnosed illnesses, employer and employee spending on outpatient mental health services increased by 37%. Meanwhile, spending on prescription drugs fell by 15%.
  • Outpatient mental health services accounted for two-thirds of total employer and employee mental health spending in 2020, up from just over half in 2013. Spending on prescription drugs for mental health services, however, has declined. It has fallen from 34% of total mental health spending in 2013 to 23% in 2020. This is due to lower average drug prices.

The results suggest that mental health should be a priority for employers when offering benefits, particularly if the desire is to reduce overall health care costs.

“Employers are looking for ways to meet the mental health needs of workers given the current economic climate,” Fronstin said. “And they are particularly interested in addressing mental health needs because of the link between depression and productivity losses. Taking responsibility for the mental health of workers can not only reduce healthcare costs, but also increase worker productivity. Mental health issues are estimated to cost employers more than 200 million lost workdays each year.

Photo: Ta Nu, Getty Images

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