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Economics of Mental Health – The Case for Investment in Prevention and Promotion

Since its establishment, the National Mental Health Commission has sought to put mental health on the economic agenda. The potential economic and social gains from mental health reform from investing in promotion, prevention and early intervention are considerable.

The Commission is seeking to build on the evidence base of why investing in prevention initiatives can result in benefits for the individual in terms of their mental health, and also economic benefits in the form of improvements in productivity and health care cost savings.

Ten prevention interventions have been modelled using a return on investment framework. The rationale for selecting the interventions is available from our Prevention and Promotion page.

Results for the interventions are summarised in the table below and in the document - The economic case for investing in mental health prevention summary.

Results for the individual summaries are available at the links in the table below. 

Results of interventions ranked by ROI with total costs and total savings 



Target population

Length of modelled costs and benefits

Total costs of intervention

Total saving

3.06 e-Health interventions for the prevention of anxiety disorders in young people (435KB) School students aged 11–17 10 years $6.2M $18.8M
2.87 Educational interventions to reduce older persons' loneliness (344KB) Women aged 55 years and above residing in the community 5 years $25.2M $72.4M
2.54 Exercise programs for the prevention of postnatal depression (319KB) Women at least 4 weeks post birth 5 years $5.5M $14.0M
2.40 Parenting interventions for the prevention of anxiety disorders in children (332KB) Preschool children aged 4–5 years 3 years $3.7M $8.3M
2.14 e-Health interventions to reduce older person' loneliness (351KB) Lonely older adults aged 65 and above enrolled into the Community Visitors Scheme 5 years $2.2M $4.7M
1.63 Psychological interventions for the prevention of postnatal depression (344KB) Pregant women 5 years $14.6M $23.3M
1.56 School based interventions for bullying prevention (384KB) School students aged 8–11 10 years $66.8M $103.9M
1.19 School based psychological interventions to prevent depression in young people (331KB) School students aged 11–17 10 years $31.1M $37.1M
1.05 e-Health workplace intervention for the prevention of depression (370KB) Employees aged over 18 years 11 years $6.2M $6.5M
0.28 Face to face psychological workplace interventions for depression prevention (274KB) Employees aged over 18 years 11 years $166.6M $45.8M

Additional information - context for modelling 

Each intervention has been tested for its effectiveness in preventing mental illness or promoting mental health. It has then undergone an assessment of cost effectiveness using a return on investment (ROI) ratio. This ratio calculates gain or loss in relation to the initial investment of funding. A ROI which is greater than $1 means that the cost savings are greater than the costs of the intervention. For example, a ROI of $1.50 means that for every $1 invested, $1.50 will be gained.

To calculate the ROI for each intervention, assumptions are made about how the intervention is implemented. For example, each model assumes a sufficient workforce is available and existing infrastructure is in place to deliver the intervention. These assumptions might be optimistic or conservative and can influence: the results of the modelling, the ROI calculated, and how the results are interpreted. There may also be different ways of implementing the intervention in the real world that may not be captured in the modelling. This means that there are limitations on the applicability of the recommendations in different settings. For example, the workplace interventions were modelled in businesses with more than 200 employees because these interventions have not been tested in smaller sized businesses.  

Also, a ROI framework is just one lens through which to consider the value in delivering mental health prevention interventions. There are other considerations beyond the economic rationale which may influence whether decision makers (such as government and employers) implement an intervention. These considerations include the acceptability of the intervention to the target population, sustainability of the intervention in the long term and the impacts/benefits on people around the person receiving the intervention e.g. family, carers, co-workers.

The lay summaries should therefore be read and interpreted in this context.

More details of the modelling, including technical summaries for each intervention are available from the NMHC upon request.

Economics of Mental Health Resources

The Economics of Mental Health Resources (120KB) document contains some of the many references that have been identified in the Commission’s work around the economics of mental health. Please note this is not intended to be an exhaustive list of materials, but rather a sample of the substantial work in this area both in Australia and internationally.

National Mental Health Commission Initiatives