The true lost-time costs of these cases – including disability payments and lost productivity – are 2-1/2 times the costs of medical care and pharmacy benefits combined; lost productivity is the largest single cost component, making up 60% of these “full costs.”
In addition, the research finds that twice as many employees develop depression after filing a disability claim, and again lost productivity is the biggest single cost driver of these disabled employees.
But most significantly according to the research, lost productivity is greatest for those employees still at work, as more than 80% of all productivity losses for depressed employees are associated with sick leave and presenteeism (employees who are not fully functioning while at work due to ill health).
“Our results show that depression is a case in point for employers wanting to improve the health of their workforce while improving business results: a huge potential for lost productivity, yet not on employers’ radar screens from the paid-cost standpoint,” said Thomas Parry, PhD, president of IBI. “A short-sighted focus on paid benefits causes employers to underestimate the true impact of depression on the workforce and fail to make appropriate investments in improving workforce mental health. Such an investment, reflecting the full costs of workforce depression, would benefit employers and their employees alike.”
The analysis examines the relationship between depression, disability and productivity and presents unanticipated employer costs and significant challenges. The new study comes at a critical time for U.S. employers struggling to improve both the productivity and health of their employees as they work to remain competitive in the global economy. Depression-related short-term disability (STD) claims can be expensive, extended and hard to manage; they also are common and constitute the second leading cause of disability worldwide.
Key Findings of The Full Costs of Depression in the Workforce:
IBI’s Employer Member Solutions Board Recommends “Increase early depression screening for disability sufferers,” recommends IBI’s Member Solutions Board, a group of employers and suppliers that review research findings and provide actionable recommendations. The Board for this research also suggests that employers engage a disability supplier to look at claims horizontally and get beyond the disability diagnosis to probe for claimant family and social or work/life issues. Mental health parity requirements represent an opportunity for employers to fine-tune mental health benefits and treatment as a productivity instrument.
For this study, IBI used an Ingenix master research database on 400,928 unique employees from six companies, distributed across all ten geographic regions of the U.S. and a large, national database from employee self reports using the Health and Work Performance Questionnaire (HPQ), a tool developed by Dr. Ronald Kessler of Harvard Medical School and the World Health Organization.