Mental health matters: Excess healthcare costs of psychological distress among young women are substantial and early intervention is required to reduce the risk of more severe mental illness

Authors: Danusha Jayawardana¹, Brenda Gannon^2,3, Jenny Doust³, Gita D. Mishra³

1. Centre for Health Economics, Monash Business School, Monash University, Caulfield East, Victoria, Australia.
2. School of Economics and Centre for the Business and Economics of Health, University of Queensland, St Lucia, Queensland, Australia.
3. NHMRC Centre for Research Excellence on Women and Non-Communicable Diseases (CRE WaND), School of Public Health, The University of Queensland, Herston, Queensland, Australia

Summary:

Recent data shows that almost 40% of young Australian women aged 16-24 have experienced symptoms of mental health disorders such as anxiety, depression, or substance abuse disorder in the past year. The additional annual healthcare cost of moderate and severe psychological distress among women aged 18-27 years is approximately $43 million and $96 million, respectively.  These estimates are from a study by the NHMRC Centre for Research Excellence on Women and Non-Communicable Diseases, University of Queensland, which also found that young women with psychological distress spend 15% more each year on medical services and prescribed medicines than women without psychological distress. The effect is much larger for women experiencing severe psychological distress, where costs increase by 26% indicating a need for policy measures that focus on early intervention and prevention of psychological distress.

Although depression can affect individuals of all ages, young people, especially young women, are most susceptible, with women being twice as likely as men to develop depression. Despite the prevalence of anxiety, depression, or substance abuse disorder in the community, there is limited evidence on these healthcare costs. The researchers used linked data and econometric techniques to estimate the precise government-funded healthcare costs (excluding hospital costs) attributable to psychological distress. Specifically, the study used survey data from over 16,000 young women (aged 18–23 years) from the Australian Longitudinal Study on Women's Health, which is linked to their administrative records of healthcare costs from Medicare – the Australia’s public health insurance system.

The key findings were:

• Young women with psychological distress spend 15% more each year on medical services and prescribed medicines than women without psychological distress. The effect is much larger for women experiencing severe psychological distress, where costs increase by 26%.
• The additional annual healthcare cost of moderate and severe psychological distress among women aged 18-27 years is approximately $43 million and $96 million, respectively.
• The effect of psychological distress on healthcare costs is highest during the first six months of onset and gradually decreases afterward.
• Antidepressants, as well as the services of psychiatrists and psychologists, account for a large portion of the increased healthcare costs.
• Women with psychological distress have higher out-of-pocket costs on these mental health-related services compared to non-mental health-specific services.

The policy implications of these findings are significant. First, the excess healthcare costs of psychological distress among young women are substantial. Second, individuals with psychological distress are more likely to develop major mental health disorders, placing additional burden on healthcare resources. Therefore, the study highlights the need for policy measures that focus on early intervention and prevention of psychological distress, not only to minimise the economic consequences of such distress, but also to reduce the larger costs associated with other mental illnesses.

The research on which this paper is based was conducted as part of the Australian Longitudinal Study on Women's Health by the University of Queensland and the University of Newcastle. We are grateful to the Australian Government Department of Health and Aged Care for funding and to the women who provided the survey data. The authors acknowledge the Australian Government Department of Health and Aged Care for providing MBS and PBS data, and the Australian Institute of Health and Welfare (AIHW) as the integrating authority.