By Bob Doppelt and ITRC
Problem: The U.S. is experiencing a mental health epidemic, with over 1 in 5 Americans experiencing diagnosed difficulties, and this does not include the millions of people with unreported conditions. A 2024 study found that mental health problems cost the U.S. economy more than $280 billion annually, a financial burden comparable to an annual recession. Without significant reform mental health costs will only rise.
Solution: Research shows that community-led mental health prevention and resilience programs can save significant money, while improving the health, safety, and wellbeing of individuals, families, and communities. One community program was found to save over $5 for every $1 invested. This document highlights key research findings and concludes that to reduce costs and improve Americans' mental health, the federal government must expand beyond individual treatments to prioritize community-led mental health prevention and resilience initiatives. The bipartisan Community Mental Wellness and Resilience Act provides a vehicle for achieving these goals.
Factors Causing the High Costs of Today’s Mental Health Epidemic
Direct Costs
Lost economic productivity
Mental and physical health treatments
Increased human services
Economic impacts on the workforce
Indirect Costs
Reduced consumer spending
Impacts on education and worker training
Costs of mental health-related crime
Mental health impacts of extreme weather
Community-Led Prevention Can Significantly Cut Costs and Enhance Mental Wellness and Resilience
Improving the U.S. mental health treatment system—for example, by increasing providers, establishing community centers, and expanding telehealth—will help, but it’s insufficient. Even with more services, up to 50% of those in need won’t engage, and treatment typically addresses symptoms only after they arise, not before. To reduce the costs of today’s mental health epidemic, the U.S. must prioritize community-led mental health prevention and resilience initiatives. These programs can build social support networks, promote trauma-informed self-regulation resilience skills, and engage residents in many other activities that prevent and heal mental health problems. In doing so they enhance the health, safety, and resilience of individuals, families, and communities for all types of stresses and traumas.
The bi-partisan Community Mental Wellness and Resilience Act will achieve this goal.
I. Skyrocketing Economic Costs of Today’s National Mental Health Epidemic
A 2024 National Bureau of Economic Research study concluded that mental health problems cost the U.S. economy over $280 billion annually. This cost is comparable to a recession.[1]
Another 2024 study, determined premature deaths related to mental health inequities resulted in $278 billion in costs between 2016 and 2020. The study projected that unaddressed mental health inequities could produce about $14 trillion in excess costs between 2024 and 2040.[2]
Depression alone cost the U.S. $236 billion in 2018, reflecting a 35% increase since 2010, driven by medical services and medications, workplace, and suicide-related expenditures.[3]
A study of Adverse Childhood Experiences, which often generate mental health problems in adulthood, found that ACEs cost the U.S. a staggering 12.1 trillion annually due to lost productivity, direct spending on health care, and other factors.[4]
Huge costs have also been found at the state level. In Indiana a study of over 429,000 residents found untreated mental health issues cost the state $4.2 billion in 2019, equal to 1.2% of its 2019 GDP.[5]
II. Factors driving the Economic Costs of Mental Health Problems in the U.S.
Direct Costs
Lost Productivity:
75% of people with mental health disorders say it affects their productivity at work, and mental health is the most expensive employer health costs across many industries.[6]
Mental health struggles can impair cognitive ability, increase absenteeism, decrease focus, hinder innovation, and increase workplace accidents.
Costs of Mental Health and Physical Health Treatments:
Mental health treatment—therapy, medication, and hospitalization—cost money.
Comorbidities often exacerbate physical health problems and lead to worse outcomes. For example, people with mental health issues are more likely to develop heart disease or cancer.
Mental health conditions often increase physical health treatment costs. Treating diabetes, for example, is more expensive when accompanied by depression.
Untreated mental health issues, including depression, can result in greater utilization of primary and specialty healthcare services due to related physical health complications.[7]
Human Services:
People with mental health problems may be unable to work, leading to increased reliance on Supplemental Security Income and Social Security Disability programs.
Mental health issues can be linked to housing insecurity, with 30-35% of unhoused individuals having mental health conditions. These individuals often face unemployment, poverty, substance use, and relationship difficulties, all of which may require social services.
Family members are also likely to provide substantial informal care, which impacts their own employment potential, their mental and physical health, and their relationships.[8]
Workforce Impacts:
The employment rate of people with mental health disorders is 10-15% below those with good mental health. People with mental health conditions are 6-7x more likely to be unemployed, and those with mild-to-moderate psychological problems are 2-3x more likely to experience unemployment than the general population.
People with mental health issues also tend to have early mortality. For example, people with severe mental illnesses die on average 20 years earlier than the general population. This increases costs for employers due to impacts on staff morale and the need to hire and train new employees.[9]
Indirect Costs
Consumer Spending: Individuals with mental health issues may spend less money due to financial stress or lack of motivation. They often have a difficult time managing their finances, leading to difficulty budgeting, neglecting bills, and a decreased ability to make sound financial decisions.[10]
Education and Worker Training Losses:
Mental Health-Related Abuse, Neglect, Crime, and Violence:
People with mental health problems can have a slightly higher likelihood of aggression or violence compared to the general population, especially when they experience substance use problems.
Studies have linked untreated mental health issues to higher crime rates in certain communities.
About 64% of U.S. adults reported having at least one adverse childhood experience (ACE—such as abuse or neglect) before 18, and over 17% reported four or more ACEs.[13] People who experience ACEs have a higher likelihood of experiencing mental health problems in adulthood.[14]
Mental Health Impacts of Extreme Weather Disasters: Numerous disasters in 2024 caused widespread devastation. Hurricane Milton inflicted $60 billion in damage and claimed 25 lives, while Hurricane Helene caused $59.6 billion in damage and 232 deaths. Even excluding hurricanes, other extreme weather disasters caused over $60 billion in damage and killed 88 people.
The costs of mental health problems generated by disasters are significant and rising, yet are almost never not fully accounted for in recovery plans.
Research shows events like wildfires and hurricanes are increasing rates of acute stress, post-traumatic stress disorder (PTSD), and related comorbidities.[15]
Disasters are also indirectly increasing the prevalence and costs of nutritional deficiencies, leading to increased rates of depression, bipolar disorder, and child neurocognitive disorders. [16]
Repeated extreme weather disasters can cause long-term regional impacts including economic instability, cumulative community stress and trauma, increases in poverty, domestic violence, substance use, and forced migration. Continual flooding and prolonged droughts have been associated with elevated levels of anxiety, depression, suicide, and PTSD.[17]
III. Significant but Hard-to-Financially Quantify Mental Health Costs
Personal costs: People with mental health problems are more likely to experience stigmatization and discrimination, problems with employment, finances, relationships, physical health, social isolation, and loneliness, all of which can have high financial costs.
Family Disruption: Mental health issues in a family can strain relationships and dynamics, directly and indirectly producing high costs. For example, parents with depression or anxiety increase the odds of their child developing depression or anxiety by two-fold.[18]
Community Impacts: Mental health issues can affect neighborhood safety, security, and quality-of-life, and create mistrust and fear that reduce the capacity of neighbors to help each other during disasters and other adversities.
IV. Solution: Invest in Community-Led Mental Health Prevention and Resilience
To reduce today’s mental health epidemic and its skyrocketing costs, improving the nation’s mental health treatment system is crucial. This includes, for example, increasing the availability of mental health providers and community health centers with mental health providers, expanding virtual mental health services, and other actions. However, this approach alone has significant limitations:
Demand for mental health professionals far exceeds the supply: and even with more funding for training, there will never be enough providers to meet the needs of millions Americans struggling with mental health challenges.[19]
Lack of engagement: Nearly 50% of those in need don't seek treatment often because of perceptions that therapy is for the mentally weak, a luxury for the rich, conflicts with religious or cultural beliefs, or fear being stigmatized by others if they participate.[20]
Mental health treatment is largely reactive and does not prevent problems: Most treatment systems assist individuals one-at-a-time after symptoms arise. They do not preventing mental health problems across larger populations.[21] However, today’s widespread stressors—like extreme weather disasters—affect entire communities. Effective approaches must be proactive and work at the population-level, not solely reactive, or focus just on individuals.
While very important, merely improving the nation’s mental health treatment system cannot resolve today’s epidemic. Congress must expand the nation’s approach to mental health by prioritizing population-level prevention and resilience building.
Widespread Prevention Requires a Community Health Approach
Prevention can be more cost-effective than treating or managing severe mental health conditions after they appear.[22] The National Academies of Sciences, Engineering and Medicine determined that every $1 investment in prevention and early intervention for mental illness and addiction yields $2 to $10 in savings by reducing lost productivity, healthcare costs, and criminal justice expenses.[23]
Large-scale prevention requires a community health approach that addresses interacting individual, family, social, economic, and environmental stressors that influence mental health, rather than focusing only on individual biomedical or early childhood factors.
A community health approach engages coalitions of local residents, groups, and organizations in neighborhoods and communities that work to strengthen “protective factors” —norms, skills, practices, resources, and policies that foster a culture of health, safety, and resilience—while minimizing “risk factors” that undermine wellness and resilience.
Community-led mental health prevention initiatives typically help youths and adults develop supportive relationships that promote pro-social behaviors and reduce the social isolation and loneliness fueling many of today’s mental health struggles. The social connections are also vital to provide the mutual aid, practical assistance, and emotional support residents need during disasters and crisis.
Many community-led initiatives also teach trauma-informed emotional regulation, help local organizations adopt practices that enhance employee and stakeholder mental health, and cultivate a culture that boosts individual and collective mental wellness, safety, and resilience.
Examples of Cost-Effective Community-Led Prevention Initiatives:
Washington Family Policy Council’s Community Public Health and Safety Networks: Between 1994 and 2011, the program averaged a $3.4 million annual budget. From 2002 to 2006, taxpayer savings from the Networks were estimated at $120 million per year, saving $35 for every $1 invested.[24]
Communities That Care Model: An initiative designed to prevent youth mental health related issues such as crime, substance use, and violence, has returned $5.31 for every $1 invested.[25]
Community Resilience Initiative (Walla Walla, Washington): This program led to youth school suspensions dropping from 798 per year to 135; discipline referrals and expulsions were both reduced by 50%, and police incident reports dropped from 48 to 17, all of which reduced costs.[26]
V. Conclusion: The Community Mental Wellness and Resilience Act will support community-led initiatives that reduce the costs and prevalence of mental health issues
The skyrocketing prevalence and financial costs of mental health problems in the U.S. underscore the need for Congress to expand our approach by investing in community-led prevention and resilience building initiatives.
The bipartisan Community Mental Wellness and Resilience Act will accomplish this goal and begin the process of building universal capacity to prevent mental health problems and build resilience for severe stresses, disasters, and other adversities nationwide.
[1] Abramson, B. et al. (April 2024). Macroeconomics of Mental Health. National Bureau of Economic Research.
[2] Dawes, D. (May 2024). The Projected Costs and economic impacts of mental health inequities in the United States. Deloitte Center for Health Solutions.
[3] Greenberg, P.E. et al. (May 2021) The Economic Cost of Depression is Increasing; Direct Costs are Only a Small Part.
Pharmacoeconomics.
[4] Peterson, C. et al., (Dec. 2023) Economic Burden of Health Conditions Associated With Adverse Childhood Experiences Among US Adults. Journal of the American Medical Association; and Danielsdottir, H. et al ((March 2024), Adverse Childhood Experiences and Adult Mental Health Outcomes, JAMA
[5] Taylor H. et al. (Oct. 2023). Economic Burden Associated with Untreated mental Illness in Indiana. JAMA health Forum. 8
[6] Abramson, B. et al. (April, 2024). Macroeconomics of Mental Health. National Bureau of Economic Research. 4
[7] Scott K. et al. (2016). Association of Mental Disorders With Subsequent Chronic Physical Conditions: World Mental Health Surveys From 17 Countries. JAMA Psychiatry.
[8] Padgett D. (2020). Homelessness, housing instability and mental health: making the connections. BJ Psychology Bulletin.
[9] World Health Organization. (Sept. 2022). Mental Health at Work: Policy Brief
[10] Holkar M. Seeing through the fog: Mental health and financial capability. Money and Mental Health Policy Institute. D
[12] Augusta College (April, 2024). The Crucial Link Between Mental Health and Career Development..
[13] Adverse Childhood Experiences (ACEs). Centers for Disease Control and Prevention.
[14] Gill, K. Understanding the Causes of Child Abuse. (Dec. 2018). Healthline.
[15] Cutter S. (2018). Compound, Cascading, and Complex Disasters: What’s In a Name? Journal of Environmental Science and Policy for Sustainable Development.
[16] Chen M. et al. (June 2013). Association between psychiatric disorders and iron deficiency amenia among children and adolescents: a nationwide population-based study. BMC Psychiatry.
[17] See for example: White B., et al. (Oct. 2023). Mental Health Impacts of Climate Change Among Vulnerable Populations Globally: An Integrative Review. Ann Glob Health.; and Haase E. (May 2023) How Extreme Weather Events Affect Mental Health. American Psychiatric Association.
[18] Haynes E. et al. (June 2020). Exploring the association between a parent’s exposure to Adverse Childhood Experiences (ACEs) and outcomes and depression and anxiety among their children. Children and Youth Services Review.
[19] See for example: Sun. R. and Shain S. (Dec. 2024) ‘It’s a crisis’: How the shortage of mental health counselors is affecting the rural Northwest. Oregon Public Broadcasting.
[20] Nietzel M. (May 2021). Almost Half of Americans Don’t Seek Professional Help for Mental Health Disorders. Forbes.
[21] See for example: Stoerkel, E. (2020). What is a Strength-Based Approach? (Incl. Activities and Examples), PositivePsychology.com; Saul J. (2014). Collective Trauma Collective Healing. Routledge Publishing; and the large body of research on Positive Psychology.
[22] Singh V. et al, (July 2022). Mental Health Prevention and Promotion—A Narrative Review. Front Psychiatry.
[23] Steinberg Institute (2024). The costs and benefits of early intervention in mental illness.
[24] Porter L. et al, (June 2016) Self-Healing communities. Robert Wood Johnson Foundation.
[25] See for example: Kuklinski M. et al, (2012). Cost-Benefit Analysis of Communities That Care: Outcomes at Eighth Grade. Prevention Science; Rowhani0Rahbar, A. et al. (April 2023). Effect of the Communities That Care Prevention System on Adolescent Handgun Carrying. JAMA Network; University of Washington, Creating Communities that Care;
Izquierdo A. Et al. (Sept. 2018) Community Partners in Care: 6- and 12-month outcomes of community engagement versus technical assistance to implement depression collaborative care among depressed older adults. Ethnicity and Disease; and Springgate B. et al. (Sept 2018). Comparative effectiveness of coalitions versus technical assistance for depression quality improvement in persons with multiple chronic conditions. Ethnicity and Disease.
[26] Brown, M., & Barila, T. (2012). The Children's Resilience Initiative of Walla Walla: one community's response to Adverse Childhood Experiences [PowerPoint Presentation].