Report: Spending on psychological well being companies considerably elevated from 2013 to 2020

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Overall spending by employers and employees on mental health services as a percentage of total spending rose from 6.8% in 2013 to 8.2% in 2020, a new report found. Employers and employees spent almost $77 billion on mental health disorders in 2020, the researchers estimated.

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

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

Not surprisingly, employees are also using mental health services more than they did in the past. The percentage of enrollees using outpatient services rose from 12% in 2013 to 16% in 2020. The percentage of those using prescription drugs went from 19% to 21% in the same time period. However, inpatient services stayed 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 increases in both the number of individuals diagnosed with mental health disorders and use of healthcare services, higher spending is of great concern to plan sponsors of health benefit programs,” said Paul Fronstin, director of health benefits research at EBRI.

Other key findings from the report:

  • Average annual spending on mental health services by employees with a diagnosed mental health condition went from $1,987 in 2013 to $2,380 in 2020, a 20% increase overall and a 3% increase per year.
  • Spending by both employers and employees on outpatient mental health services increased by 37%. Outpatient mental health services represented two-thirds of total mental health spending in 2020, compared to a little over half in 2013.
  • Spending by employers and workers on prescription drugs for mental health services decreased, however. It went from 34% of mental health spending in 2013 to 23% in 2020. This was because of lower average prices for drugs.

The findings suggest that mental health needs to be top of mind for employers when offering benefits especially if the desire is to reduce overall healthcare costs.

“Employers are looking for ways to address the mental health needs of workers given the current economic climate,” Fronstin said. “And they are especially interested in addressing mental health needs because of the connection between depression and productivity losses. Taking responsibility for workers’ mental health may not only reduce spending on health care but may increase worker productivity. It has been estimated that mental health conditions cost employers over 200 million lost workdays each year.”

Photo: Ta Nu, Getty Images

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