Mental health reform is a social and economic investment for the future of Australia

Chris Schilling PhD, Associate Director, Economics
Andrew Dempster, Director, Health Human Aging

Australia is in the midst of a productivity growth malaise, but an often unspoken outlier, improving mental health, could be the microeconomic reform of the 21st century.

Released today, ‘Investing to Save’ The Economic Benefits for Australia of Investment in Mental Health Reform found interventions to improve mental health can generate return on investment of $1.30 to over $9.00 for every dollar invested. The report by Mental Health Australia and KPMG provides clear recommendations for government, service providers and industry about the concrete steps they can take today towards improving the mental health of all Australians.

This report highlights immediate actions that combined generate $8.2 billion in short-term savings from an investment of under $4.4 billion. They are substantial, immediate returns on investment.

The three main areas for action where there is robust evidence for success are:

  1. Support individuals with mental health issues to gain and maintain employment, and maintain the mental health and wellbeing of the workforce.
  2. Minimise avoidable emergency department presentations and hospitalisations.
  3. Invest in promotion, prevention and early intervention.

Much like Australia has invested in parental leave arrangements in a bid to improve both social equality and economic outcomes, mental health reforms are an opportunity for Australian workplaces to improve employee health, and in doing so generate lasting economic returns for employers and improved future prosperity for the nation.

While employers benefit directly from a mentally healthy workplace, most need further encouragement to undertake the investment. Mental health is still stigmatised by much of Australia and is often seen as a disability rather than a health issue. As an incentive, we recommend workplaces that show improvement in the mental health of their employees should be rewarded with reduced Work Cover premiums.

But mental health is also a distinctly personal issue experienced by one in five Australians every year and impacting many more.

Around 3,000 Australians are diagnosed with schizophrenia each year and many go on to spend significant time in hospitals over many years.  Early identification and intervention at the onset of illness is important. A community-based assertive outreach program that focuses on early identification, provides specialist treatment and medication, vocational support and occupational therapy, can substantially reduce the transition to severe illness. The long-term benefits are stark – with the economic modelling showing a return on investment of over $8.00 for every dollar invested.

With a 14 percent increase in homelessness from the 2011 to the 2016 census, homelessness must be reduced in Australia. Reducing homelessness, often part of the cycle of mental health decline, is not only economically attractive, but the right thing to do. Our review of the literature found that an intensive housing first model that provides not just secure housing but assertive community outreach has been shown to particularly effective. It’s not cheap, because the intervention involves community support as well as bricks and mortar, but it’s worth it. In one study, hospitalization, for those in the program, was reduced by 50 days.

Overall, the aim of this report is to increase the evidence base for investment and reinvestment in mental health reforms. The recommendations deliver both economic returns as well as achieving positive health and social outcomes. With 45 percent of Australians 16-85 experiencing a mental health condition in their lifetime, 1 in 5 employees taking time off work for stress, anxiety, depression and other mental health matters, and a rising use of emergency and crisis services to support people in mental health distress; there has never been a more pressing time for action.

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