Untreated Mental Health Costs Hoosiers About $4.2B a Year

When mental health concerns go unaddressed among Indiana residents, the effects add up to a very costly situation. Think of it a bit like a person trying to walk on a broken leg without seeking treatment. They’re clearly not going to perform at their best. Mental health concerns are very similar. When they go unchecked, they hold us back across many aspects of life, and they also impact many areas of our economy.

A new study from researchers throughout the state tells us just how much it’s costing us. It’s a tune of about $4.2 billion each year, caused by a number of factors. The most expensive of which are, unfortunately, premature mortality and lost productivity.

The Indiana Behavioral Health Commission was the organization that commissioned the study, released in late 2022 and compiled by experts from about seven different public health organizations. A breakdown of the massive costs created by untreated mental illness is estimated to be:

• $1.4 billion to premature mortality,
• $885 million to productivity losses,
• $708 million to direct health care costs,
• $142 million to Medicaid,
• $567 million to private insurers,
• $106 million to Indiana’s criminal justice system,
• $9 million to Indiana through homeless support,
• $566 million for caregiving,
• $407 million in unemployment for those unable to work.

“By identifying the economic costs of untreated mental illness, we provided quantitative evidence that supports what many families and communities are acutely aware of – that the consequences of inadequate care for mental illness are enormous,” said Justin Blackburn, PhD, associate professor of health policy and management at IUPUI’s Richard M. Fairbanks School of Public Health.

“One in five people in Indiana experience some sort of mental illness each year, but we know many people don’t get the treatment they need,” said Heather Taylor, PhD, MPH, assistant professor of health policy and management at the Richard M. Fairbanks School of Public Health. “By sharing this report, we hope state leaders better understand the burden created by untreated mental illness and take action to prioritize interventions that improve access to and delivery of mental health services.”

How Can Indiana Fix This?

One of the interesting things about the study was a look back at how the state has invested in behavioral health services historically. According to researchers, Indiana invested $116 million in 2006 for community-based care for individuals with severe mental illness and emotional disturbances. In 2022, we invested about $126 million – which should have been $174 million if we would have kept pace with 2006’s levels when adjusted for inflation. Researchers stated that Indiana “dramatically undershot the mark in the last decade and a half, and results are evident.”

Or, to describe it as one CEO of a community mental health center put it, the situation is like “trying to fill a giant sinkhole with a single spoon.”

According to the experts, the evidence-based pathway forward is to not only increase funding (which they recommend we do by no less than 60% over the next two biennium budgets) but also make significant changes to the structure of our mental health system. Many of their recommendations mirrored what other similar states are doing, including:

• Follow the nationwide push to make 988 a new suicide and crisis lifeline. Indiana is already building this using American Rescue Plan funding, but by adding a surcharge on phone bills the program can be made sustainable. This would also include mobile crisis teams and safe places for help.
• Transition from our current community mental health center (CMHC) model to the federally supported certified community behavioral health clinic (CCBHC) model. Other states like Missouri have done this because it’s been proven to increase access to care and quality. There are 17 CMHCs in Indiana that already have limited grant funds to begin the transition.
• Both 988 and CCBHC will ease the mental health burden on our judicial system, which can save money. Other criminal justice strategies would include increasing the number of mental health courts and adding a Medicaid waiver so behavioral health costs can be reimbursed for incarceration.
• Other recommendations included increasing mental health literacy, increasing the capacity of psychiatric consultation programs, modifying the licensing process to increase numbers of qualified mental health professionals, and more.

With Adjustments, We Can Save $$$

Although making major alterations to our current statewide mental health programming will come at a cost, we’re already losing much more to untreated mental illness as things are today. It’s an expensive issue, but with a few modifications to our approach Indiana can become much more proactive in keeping people mentally healthy. There’s a lot for our economy to gain by doing so, and lots of potential for greater prosperity.