The passage last year of federal mental-health-parity legislation sends a strong message that mental-health conditions are just as treatable as other medical conditions. The new law, which applies to group health plans covering 51 or more employees, does not mandate coverage. But if an employer or insurer offers mental-health or substance-use benefits, it cannot impose stricter limits on coverage for those conditions than those set for other health problems. Providing those benefits makes good business sense.
While the drive for a federal parity law took many years, parity is not a new concept. The experience across more than 45 states that have parity laws and of the federal government (which since 2001 has provided parity under the Federal Employees Health Benefits Program) is that parity does not substantially increase utilization or cost.
In the case of the federal parity law, the Congressional Budget Office anticipates a modest increase in premiums of approximately 0.2%. A number of companies now specialize in managing mental-health benefits, making the costs to insurers and employers more affordable.
Many large businesses also have recognized the value of including mental-health and substance-use coverage in their insurance packages. They measured its impact on disability, return to work and absenteeism and found it cost-effective. That was the conclusion of a landmark report by the National Business Group on Health, which recommends employers equalize their medical and behavioral benefit structures given evidence that parity yields significant clinical benefit without increasing overall healthcare costs.
Among its important findings, the group’s An Employer’s Guide to Behavioral Health Services identifies mental illness and substance disorders as a major cause of lost productivity. Mental-health and substance-abuse conditions account for more disability than any other health condition. Approximately 217 million days of work are lost annually because of productivity decline related to mental-illness and substance-abuse disorders, costing U.S. employers $17 billion each year.
The good news is that we have effective treatments for most mental-health conditions. Advances in psychotherapy and medications produce positive results, particularly when those therapies are combined. In the case of depression, the second most costly illness in the workplace, treatment works over 80% of the time. When treated effectively, employees with depression spend considerably more days at work and maintain productivity.
Among its recommendations, the National Business Group on Health urges improved benefit design for behavioral health screening and treatment services to ensure that mental illnesses and substance-use conditions are identified and effectively treated.
In Mental Health America’s “FundaMental Health” program, we address the many benefits of workplace health promotion that focuses on mental health. Many employers have found that productivity tends to increase after workers are treated for mental illnesses and drug or alcohol dependence. Such treatments can reduce the number of lost work days and increase productivity. Unlike other medical conditions such as heart disease or diabetes, the indirect costs associated with mental illness meet or exceed the direct treatment costs.
Last year, in a survey of human resources officials conducted by Employee Benefits News, those surveyed cited mental illness as the issue they believed had the most impact on indirect costs to employers, far outstripping diabetes, smoking and heart disease. A 2004 study at Cornell University rated depression and sadness as a top five reason for lost productivity, along with conditions such as arthritis.
Workplace initiatives—the investment in behavioral health services, for example—can have a significant effect on reducing the workplace impact of these mental-heath conditions. And “cost offsets” related to absenteeism, work slowdowns (a phenomenon known as “presenteeism”) and increased productivity can pay dividends.
We know that a comprehensive, targeted work-based strategy that integrates prevention and health promotion with disease and disability management can improve outcomes—economic, clinical and occupational. A 2005 review of workplace health promotion programs showed a $5.81 savings per dollar spent. Providing high-quality depression care has been shown to decrease employee absenteeism by 28%. A 2005 study indicated that, depending on the size of the company, between 2.5% and 4.5% of the money spent on salaries goes to absent employees. So implementing programs that focus on wellness can save millions of dollars annually.
Business leaders increasingly understand the truth that employee mental health is essential to a company’s success. Thoughtful and tested efforts to identify and treat depression and other mental disorders in the workplace significantly enhance employee health and performance. It’s in the best interest of the employee and the continuing success of the company to ensure that employees facing mental-health issues are effectively treated.
Leaders in the business community can assume a greater and more responsible role in helping to reduce the stigma that is still associated with mental illness and seeking treatment. Embracing the principles behind parity is one way to get that job done.
