Costs, Consequences, and Cures! An Assessment of the Impact of Severe Mental Health and Substance Abuse Disorders on Business Activity in Texas and the Anticipated Economic and Fiscal Return on Investment in Expanded Mental Health Services

In May 2009, The Perryman Group quantified the cost of mental health disorders to help frame policy debate surrounding the issue. Simply stated, if all of the costs and associated losses associated with these factors could be eliminated, the Texas economy would be approximately 10% larger than its present size.

 

Mental health and substance abuse disorders are pressing challenges across the nation. While these problems can clearly take an enormous toll on individuals, they also involve sizable costs for society as a whole. For those without private insurance, problems can be particularly acute. Given funding challenges, dealing with these issues increasingly requires innovative approaches to maximize the return on investment in services. Even beyond the quality of life and other human costs, mental health disorders can be expensive in terms of treatment. With inadequate treatment, overall costs, such as comorbidities, loss of wages and productivity, incarceration, homelessness, and mortality, can notably escalate.

Approximately 60 million adults suffer from a diagnosable mental disorder in the US each year. While expenditures for treatment are relatively easy to quantify, there are numerous spillover effects which can be and typically are far greater that contribute to the overall burden to society. Funding is a significant issue in states across the country when it comes to mental health. National trends show that health care spending continues to rise, though the share dedicated to mental health and substance abuse spending is decreasing as needs escalate. The situation is leading to significant economic losses on many fronts, particularly in areas such as Texas, which ranks near the bottom of the country in percapita public spending for treatment.

The Perryman Group (TPG) was asked to evaluate the economic returns on spending for mental health and the benefits of such outlays for the state’s economy. As a part of this effort, the overall costs to business activity in Texas associated with severe mental illness and substance abuse were estimated. The full report is available as a complimentary download below.