Economics of Mental Health – The Case for Investment in Prevention and Promotion
Since 2012, the Commission has considered the economic impacts of mental health. Significant economic and social gains have been identified when mental health reform occurs, combined with greater investment in promotion, prevention and early intervention. Based on this evidence, the Commission is committed to initiatives that support the mental health of individuals and also bring economic benefits by reducing public health costs. This has a positive domino effect, increasing productivity and reducing absenteeism and presentism, while creating additional funds that may be funnelled back into mental health services.
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.
Investing in prevention and early intervention makes good economic sense because it can improve Australia’s productivity and result in savings to the health system.
Results of interventions ranked by ROI with total costs and total savings
Length of modelled costs and benefits
Total costs of intervention
|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.