Anxiety is expensive: Employee mental health costs rise twice as fast as all other medical expenses

  • The amount of money companies spend on the mental health of their employees has been rising rapidly.
  • Employers plan to make mental health one of their top priorities in coming years, a new Willis Towers Watson survey finds.
  • People with mental health conditions make six times as many emergency room visits as the overall population.
Businessman sitting in chair at desk rear view
Thomas Barwick | Iconica | Getty Images

Anxiety is expensive for U.S. employers.

The amount of money companies spend on the mental health of their employees has been rising rapidly — with annual costs increasing twice as fast as all other medical expenses in recent years, according to data from Aetna Behavioral Health.

And people with mental health conditions like depression, bipolar disorder or substance abuse cost employers more money.

They make six times as many emergency room visits as the overall population, according to benefits consulting firm Willis Towers Watson. They submit two to four times as many medical claims. People suffering from depression submit an average of $14,967 per year in claims, compared with $5,929 a year for the total population, Willis Towers Watson said.

Some employers are making the treatment of mental illness a top priority — on par with combating cancer, diabetes and other chronic ailments, according to a new survey of 687 companies conducted by Willis Towers Watson. Of employers surveyed, 57 percent said they plan to focus on mental and behavioral health to a great or "very great extent" over the next three years.

"We all have a point at which stress can creep into negatively impacting our overall health and wellness," said Darcy Gruttadaro, director of the American Psychiatric Association Foundation's Center for Workplace Mental Health. "Employers are increasingly recognizing ... the importance of taking care of health, well-being and mental health, and also the role stress, isolation, loneliness and some of these other factors can play in overall mental health and well-being."

Over the past five years, employers' behavioral health expenses have jumped by more than 10 percent annually, compared with an annual increase of 5 percent for other medical costs, according to Dr. Mark Friedlander, chief medical officer for Aetna Behavioral Health.

The rise in mental health spending may not be a bad thing, Friedlander said. When employers help improve the mental health of their employees, they tend to be physically healthier too, health care professionals say.

"Overall, this is not a bad news story," Friedlander said. "As things expand on the behavioral health side, there may overall be benefits on the medical cost side."

Substance abuse, prescription drugs and costly treatments like magnetic stimulation for treatment-resistant depression are some factors driving up costs, said Jeff Levin-Scherz, national co-leader of the Willis Tower Watson's health management practice. Indirectly, mental health issues can take an "enormous toll" on employee productivity, he said.

Providing generous wellness benefits also helps to attract and retain employees, he said.

First, employers need to be able to identify who needs help. Some companies are eyeing chatbot services that employees can text when they're feeling depressed, anxious or stressed. One, called Tess, was built by clinical psychologists and uses artificial intelligence to coach users.

Another issue is actually finding people help when they need it. Sometimes, it can take weeks to schedule an appointment. Telehealth, or virtual visits, are emerging as one possible solution.

"Mental health has always suffered from stigma and the very substantial problem of access, too," Levin-Scherz said. "And what I see amongst my clients, who are mostly large employers, is increasing concern about the issue and the increasing desire to offer something."

Stress can weigh on anyone, leaving them discouraged and possibly cause them to burn out. Exhaustion and negative attitudes can lead to depression, according to the American Psychiatric Association.

Stress can also cause people physical harm. Constantly worrying about work can lead to erratic eating habits and cut into exercise routines, which can lead to weight problems, high blood pressure and higher cholesterol levels, according to the APA.

Employers are taking note. Some are covering the cost of subscriptions to relaxation and meditation apps like Headspace and Calm. Some are offering Sleepio, an app that scores users' sleep habits and teaches them cognitive behavioral therapy techniques to improve their sleep. Other companies are trying to change their corporate culture to reduce workplace stress and improve employee resilience.

Last year, financial services firm PwC introduced a program called "Be well, work well" to focus on physical, emotional, mental and spiritual well being. People can enter their progress in a phone app and earn credits to redeem for gift cards.

About 90 percent of PwC's 50,000 U.S. employees participated in the firm's "Habit Challenge" where employees picked behaviors to work on. Before the program began, employees conducted an energy audit of themselves. As a whole, the firm has seen a 19 percent score increase since January.

Nancy Spangler, founder and CEO of consulting firm Spangler Associates, says these cultural changes are crucial. She also emphasizes the need to train managers to recognize signs someone needs help, including lower production, difficulty meeting deadlines, emotional outbursts and withdrawal. She says they also need to learn how to approach the situation instead of ignoring it.

"There has to be cultures of health and cultures of compassion that allow people to be innovative and creative within climates of psychological safety. That's where well-being occurs," Spangler said. "(Companies) just can't slap a program on it, so that requires leadership and management, particularly middle management."

WATCH: This is what Medicare does and doesn't cover