For Mental Health Awareness Week we are sharing some of our perspectives around the economics of mental health, looking particularly at recent approaches taken to measure and monetise the cost of mental ill health on the UK’s economy. We focus on two reports, one from the Mental Health Foundation (2022) and the other from the Centre for Mental Health (2024). Our review considers the methods, purpose, and limitations of this kind of analysis. On the one hand, our conclusions are confirmations: mental ill health is a very real and important issue to measure, despite the complexity and difficulty. On the other, we conclude that the real contribution and value of this type of analysis is arguably less the precise estimates generated, and more how its broad scope can highlight many aspects of, and tools for, understanding the wider costs associated with mental ill health.
What do we mean by mental health – and how do we measure its cost?
Defining mental health
Monetising mental health starts with definitions. Mental health is an umbrella term covering wellbeing, stress and capacity, including the capacity to work.[1] Like with physical health, instead of trying to pin down what ‘good’ looks like, it is easier to identify ill health. Consider the following two means of categorising mental disorder – they underpin the economic analyses studied below.
- Common Mental Disorders (CMDs) such as depression or anxiety, which is used by the NHS[2] to cover impairments that interfere with day-to-day activities but tend not to affect insight or cognition – these conditions affected around one-in-six adults in the (most recent) 2014 survey. The NHS contrasts CMDs with major disorders that have a stricter clinical definition.
- A classification that covers such major disorders, for example, as used in the Global Burden of Disease study, which provides 12 categories, such as bipolar or autism spectrum disorders.[3]
The two classifications include different groups of mental health conditions, and sometimes their definitions vary. Neurodiversity is captured within the Global Burden of Disease study, but not in the list of CMDs. Depression is in both classifications, yet stress is not included in either. This is particularly relevant in the following economic analysis due to the prevalence of stress in causing sickness-absence from work. These points are important because deciding what is ‘in’ or ‘out’ shapes the economic analysis and influences the nature of findings.
Costs associated with mental ill health
Returning to the two reports in focus, the Mental Health Foundation report approaches mental health from the perspective of valuing the cost of mental health conditions, which it estimates to be £118bn per year in the UK. The Foundation’s report states that this is equivalent to 5% of UK GDP in 2019, and so makes a case for increasing investment in prevention of mental health conditions (and it is important to recognise this was a pre-pandemic position). The Centre for Mental Health has a similar motivation to increase action on prevention and treatment. The Centre’s estimate of the economic cost of mental ill health, £300bn in England alone in 2022, is aimed at drawing attention to the significance of the issue. Against which, the Centre references the cost of the NHS budget, £153bn, and the impact of Covid on the economy, £260bn.[4]
These two estimates cover different geographies and points in time, so the comparisons are not like for like. However, it is worth considering them together. Whilst they differ in nature, there is much overlap in the elements they measure.
Both studies identified costs associated with the delivery of health and care services. Here, monetisation relates to spending. Values here are closely aligned (both around £17bn) as they draw from the same sources e.g. the NHS budget.
The studies also explore informal care costs (i.e. unpaid contributions by friends and family); with methods being roughly similar: both aggregating the total amount of unpaid care, then scaling it by the value of carers’ time (circa £38bn).
In the productivity estimates there is more significant difference. This monetisation is effectively an opportunity cost – how much value is not generated through labour because of people’s mental ill health.
- The Mental Health Foundation considers those whose economic inactivity can be attributed to problems with their mental health (valued at £36bn). According to the Foundation, poor mental health hinders participation in employment and curtails career opportunities. Rates of economic inactivity are around 3-4 times higher for people with disabilities of depression or mental illness.
- The Centre for Mental Health has a higher figure (£110bn) because it considers wider consequences of poor mental health: individuals being away from work (absenteeism), individuals working but not functioning to their full potential (presenteeism), and individuals changing jobs owing to workplace stress (staff turnover).
Together, these approaches imply a two-way relationship between sickness and work stress. They are also useful in highlighting issues that are hard to see – you don’t need a diagnosis of clinical depression for your mental health to adversely affect your day at work. Estimates on sickness-absence due to stress, depression or anxiety range from 13% to 49% (ONS, HSE), making it one of, if not the, leading cause of lost productivity.
The human costs also differ greatly. There is no single established method for monetising the value we put on our own mental health (or ill health) so it is unsurprising the two approaches vary.
- The Mental Health Foundation refers to these as ‘intangible’ costs, basing its calculation on the Disability Adjusted Life Years from mental disorders (£26bn). DALYs incorporate the detriment to years lived with a disability as well as the years lost. As such, premature mortality and suicide enter the equation.
- The Centre for Mental Health uses the more recent ‘wellbeing’ approach. This method is based upon life satisfaction and, in part, the value people would be willing to pay for the equivalent loss of satisfaction with life (£130bn).
Both sources acknowledge the limitations of their approaches and position their figures as underestimates of the problem.
Is there a right approach to measuring mental health costs?
The two studies are comprehensive in pulling together the array of ways in which mental health touches upon all aspects of society. Rather than listing them here, we conclude with some reflections.
- It is positive that credible evidence is being generated that draws attention to the significance and prevalence of mental ill health in society. In particular, it is not just the sheer volume of the costs, but the comprehensive mapping of them that matters. Some impacts are less visible than others, but better insight and evidence is crucial in the development of good policy.
- Clearly, developing methods to monetise mental ill health is challenging. The design of any model is subjective, but the rigour and robustness applied by the Mental Health Foundation and Centre for Mental Health is helpful. The tools will no doubt be deployed in other studies around mental health.
- Taking the sum of NHS spending, the value of unpaid labour, and the human wellbeing cost is meaningful to highlight the scale of the problem. However, each of those values is generated with different analytical principles, so their aggregation must be taken with caution.
- Beyond monetisation, both reports relate the issues back to human experiences. The analyses consider the costs of the impacts derived from mental disorders. However, it is important to understand the variety and range of experience, as well as the aggregate pound-value, and how this affects people.
- Due to the positioning of both of these reports, their analyses are top-down – they consider the costs to society as a whole. So, whilst they do convey a range of ways in which mental ill health imposes costs, neither is well-placed to describe how this may be experienced differently by different groups. Women, for example, provide one-and-a-half-times more informal care than men, so the costs of mental ill health are not evenly distributed.
- Future work in this area could helpfully look to consider the issues from the perspective of the individual person or marginalised group rather than institutions or the workforce overall. Understanding the costs of mental ill health from this angle should help to identify where problems are felt most acutely, and so inform policy development and interventions that can support effectively those who need it most.
[1] For further details, see: Mental health (who.int)
[2] For further details, see: Adult Psychiatric Morbidity Survey: Survey of Mental Health and Wellbeing, England, 2014. - NHS England Digital
[3] For further details, see: Global, regional, and national burden of 12 mental disorders in 204 countries and territories, 1990–2019: a systematic analysis for the Global Burden of Disease Study 2019 - The Lancet Psychiatry
[4] For further details, see: The economic and social costs of mental ill health - Centre for Mental Health