The Real Costs of Workforce Depression

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Employees who live with depression know its costs only too well. Employers, however, are likely to greatly underestimate depression’s impact on their employees and the costs to their business.

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Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

IBI Research on the Real Costs of Workplace Depression

Purpose: Quantify the full costs of workforce depression to include lost productivity

Key Insights:

“The common cold of mental health,” depression affects only 16% of STD claims, but their cost, duration and complexity grabs employer attention

Medical payments for STD with depression represents only about a third of their full costs, ignoring wage replacement payments and lost productivity.

Most significantly, lost productivity is greatest for those employees still working, with more than 80% of all lost productivity for depressed employees associated with sick leave and presenteeism .

Evidence in the research and expert advice suggests that early identification and treatment of depression may reduce overall costs.

Other evidence associates relatively minor depression treatment costs with substantially higher medical and wage loss costs.

The full study is available to members of IBI.

Commentary is available in Notes view.

Depression and STD Claims

No depression80%

STD claim, subsequent depression

11%

Only depression treatment

prior to STD 4%

Depression STD diagnosis

5%N = 45,171 EEs

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

STD Lost Time by Depression

50

7265

0

10

20

30

40

50

60

70

80

Control Group Depression Group Co-morbid Group

Ave

. ST

D L

ost

Day

s

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

STD with Depression – Full Costs

$8,414

$1,989

$982 $4,301

$16,021

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Medical care STD lost time

Depression medical Non-depression medicalPharmacy STD wage replacementLost productivity

$11,385

$20,322Total full costs = $31,707

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

$11,058$6,991

$1,931

$2,272

$4,460

$3,728

$16,544

$13,269

$963$605$0

$10,000

$20,000

$30,000

$40,000

No prior treatment Prior treatment

Fu

ll c

ost

s

Depression medical care Non-depression medical care

Pharmacy STD wage replacement

Lost productivity

Co-Morbid Depression Group

$34,598

$27,223

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

Total STD Costs by Component – No pre-STD depression treatment –

$0

$10,000

$20,000

$30,000

$40,000

Control Group Co-morbid Group

Depression medical Non-depression medical Pharmacy STD wage replacement Lost productivity

$26,846

$10,159

$1,124$3,603

$11,960

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

Total STD Costs by Component – No pre-STD depression treatment –

$0

$10,000

$20,000

$30,000

$40,000

Control Group Co-morbid Group

Depression medical Non-depression medical Pharmacy STD wage replacement Lost productivity

$26,846

$10,159

$1,124$3,603

$11,960

$605

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

Total STD Costs by Component – No pre-STD depression treatment –

$0

$10,000

$20,000

$30,000

$40,000

Control Group Co-morbid Group

Depression medical Non-depression medical Pharmacy STD wage replacement Lost productivity

$26,846

$34,598

$10,159

$1,124$3,603

$11,960

$16,544

$4, 460

$1,931

$11,058

$605

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

Depression from a Broader View: HPQ Self-Reports

• Prevalence: 28%– Currently not in treatment: 70%

• Lost time– Absence: 2.2 days/person/year

– Presenteeism: 7.5 days/person/year

• Co-morbidity

– 97% of depression cases are co-morbid

– Average of 7 co-morbid conditions

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

Lost days for depression-

diagnosis STD 6%

Sick days 18%

Lost days for STD claim with

subsequent depression

13%

Presenteeism lost days

63%

Components of Lost Productivity for Depressed Employees

Source: The Real Costs of Depression in the Workforce, Integrated Benefits Institute, 2009

What Does the Research Teach?

• Look beyond the STD diagnosis

• Broaden scope beyond claims costs to include lost productivity – improved ROI

• A little depression may go a long way

• Self-report data must be integrated for full costs

• Employers should consider presenteeism effects to see what really drives productivity

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