Study: Untreated mental illness costs Kansas more than $1 billion yearly

1 | Advocacy, Foundations, Mental Health

— The financial toll of untreated mental illness in Kansas is $1.17 billion annually, according to new research released today by the Health Care Foundation of Greater Kansas City.

In the KC metro area, the cost is $624 million per year — about $287 million of which is also included in the statewide Kansas tally.

About one in 10 adults in Kansas and Kansas City has at least one of the serious mental illnesses considered in the research: major depression, anxiety disorder, schizophrenia and bipolar disorder, said Jessica Hembree, the foundation's policy officer. About 40 percent of those go untreated, she said.

The financial consequences of untreated mental illness is spread across the economy, according to the research, but the lion's share was shouldered by individuals and employers.

Hurting the bottom line

"We were surprised by how many of those costs are borne by individuals and by private employers," Hembree said. "I think it's a wake up call to the business community that the lack of funding for mental health is affecting the bottom line of businesses just as much as the pocketbooks of taxpayers. The costs are showing up in the places we don't want them to show up, which is job development and business creation."

The study reinforced what advocates have been telling the Legislature for a number of years, said Rick Cagan, executive director with Kansas Chapter of the National Alliance on Mental Illness.

"You can cut funding for mental health centers — and (legislators) have substantially over the last four or five years — but you can't make these people go away," Cagan said. "These are life-long chronic illnesses and they need treatment. They're going to show up as a cost on somebody's ledger."

Kansas spending for mental health services dropped by more than $14 million — or 16.4 percent — between fiscal years 2009 and 2012, according to a recent report by the national NAMI organization. Only six states made steeper cuts during that same period.

The research

To estimate the financial impact, researchers at The HSM Group used national prevalence rates of the four mental illnesses. They overlaid the Kansas and Kansas City demographics from U.S. Census data to estimate the number of cases of untreated mental illness in the two areas. They used economic modeling to quantify the costs of untreated mental illnesses among adults.

In Kansas, there were an estimated 177,727 cases of untreated mental illnesses. For the KC metro area, the estimate was 94,478. Individuals could account for more than one case.

The estimated cost of those cases in Kansas, according to the study, was:

• Individuals/families: $522 million

• Employers/private sector: $429 million

• Federal government: $111 million

• State government: $113 million

The proportional costs for the KC metro area were similar.

Nearly 90 percent of the total costs were borne indirectly by employers and individuals, including lost work productivity, unrealized earnings due to unemployment and lost income due to disability or suicide.

About 10 percent of the costs were direct, including increased hospitalizations, outpatient and long-term care, as well as criminal activity, Social Security disability and welfare administration costs.

More information about the report is available on the website of the Health Care Foundation of Greater Kansas City, which commissioned the research.



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