Study: Mental Health Programs May Increase Long-Term Expenses

August 8, 2003 ( - Plan sponsors with mental health programs in place aimed at containing costs should be aware - these programs may actually increase an employer's long-term expenses.

Workers in plans with deductibles greater than $600, long waiting periods for treatment of pre-existing conditions, and carve-out benefits, were found to be less likely to return to work after suffering a mental disability. The research results suggest that money saved by restricting access to care is offset by higher employee turnover costs, according to a Johns Hopkins Bloomberg School of Public Health study.

Further, speaking to carve-out benefits, the study, which was funded by grants from the U.S. National Institute of Mental Health, found that while employees with these benefits were on disability for shorter periods of time, these employees may retire sooner rather than return to work.

Looking for the possibility of a positive impact on corporate bottom line, the researchers examined the impact of employers’ disability management practices on the likelihood employees would return to work. It was discovered that companies where internal management of health and disability benefits were integrated in the same unit had better return-to-work records, while giving front-line managers disability management responsibilities did not promote return to work.

“Our results show that from the employer’s perspective, adequate mental health coverage for employees can yield tangible benefits at the bottom line,” said David Salkever, PhD, lead author of the study.

Researchers analyzed the mental-health benefits of 116 US firms and the mental-health disability claims of 407 employees from these firms, who were on long-term disability leave.The study appears in the September 2003 issue of Mental Health Services Research.