Employers can't ignore the staggering costs of depression
Employee mental health is starting to get the attention it so rightly deserves. Employers simply can’t ignore the staggering costs attached to depression.
In 2002 the Toronto-based Global Business and Economic Roundtable on Addiction and Mental Health estimated the cost of depression to Canadian employers at $33 billion. In September 2003, the Canadian Community Health Survey on Mental Health and Well-being, published by Statistics Canada, reported that one in 10 Canadians had significant problems with anxiety, depression or alcohol and drug dependency within the previous year.
Even as far back as Feb. 25, 2000, a Globe and Mail article cited Manulife Financial’s finding that psychiatric claims — primarily for depression — “are the fastest growing category of disability costs in Canada.”
But most employers don’t need these shocking statistics to know depression is a serious concern. Many believed they had their bases covered when they purchased an employee assistance program (EAP). After all, here was a benefit that was supposed to address employee mental health issues and lower employer costs through reduced health and disability claims.
But despite employers’ best intentions, the return on investment for mental health benefits appears to be getting worse, not better. So what’s going wrong?
The changing face of EAPs
As the EAP industry is largely unregulated, the importance of quality service is not well understood by most employers. Quality includes a combination of factors, but among the most important are the skill and training of the professional practitioner who is directly managing the troubled employee.
Any return on investment for an EAP is going to be a direct function of how well the professional handles the employee’s crisis — from initial consultation through to counselling, case management and ongoing support services.
Because what constitutes quality in the mental health field is not well understood and can easily be camouflaged through slick marketing and account management reports, the cost tends to be the dominant driver in EAP purchase decisions.
This has led to a price war in the Canadian EAP industry. The unfortunate result is a race to the bottom, with employers saving dollars in the short term and paying in the long term through rising benefit costs, reduced productivity and the loss of valuable employees.
The message to HR departments around the country is buyer beware. There are very solid arguments for providing an effective EAP for employees. But there’s also the risk of spending good money on a poor product.
Penny wise, pound foolish
The professional literature is quite clear in defining best practices around the treatment of depression. A combination of a specific set of medications along with cognitive behaviour therapy (CBT) usually results in the best outcomes. Proper CBT must be delivered by a professional trained to deliver it, usually a psychologist. The average number of sessions reported in the literature for this treatment is 12 and as high as 20.
Because the market has driven down the cost of EAPs, few programs can afford to hire staff qualified to diagnose mental illness, let alone treat it. Call-centre staff, regardless of training, cannot effectively diagnose over the phone or the Internet. Thus when employees suffering from depression finally reach out for help, they are not getting the qualified attention they require. Their illness is not properly treated and they often end up on disability.
Mental health and risk management
No employer wants an open-ended benefit, particularly one dealing with difficult-to-define mental health issues. So how does an employer control costs while providing effective employee support?
All employers are paying for the escalating rates of depression and anxiety among the workforce. Some costs are direct, such as employees on long-term or short-term disability who are consuming costly psychotropic medications. Some costs are indirect, such as steadily increasing insurance premiums.
Employers need to acknowledge this is a risk management issue. Treating depression and anxiety disorders solely through disability and extended health benefits is costly and ineffective. A properly funded EAP offers a proven economic alternative.
Research has demonstrated that, on average, CBT treatment for anxiety or depression costs slightly less than medication. More importantly, a combination of drug therapy and CBT costs dramatically less than the cost of managing these problems through disability benefits.
According to a 1995 article in the Clinical Psychology Review, the average cost for treating depression or anxiety disorders with CBT is between $1,800 and $2,000. The cost for medicating the problem as the only means of treatment is $2,200 to $2,500. Disability costs can run into the thousands.
An effective EAP should intervene early. A great deal can be done to prevent anxiety and depression in the workplace. Ask the EAP provider what programs it has to help the organization prevent these problems. The employer may also need to empower its EAP provider with the capacity to properly diagnose depression and anxiety and then properly treat these problems.
The EAP should provide statistical reports that show how employees diagnosed with clinical levels of depression or anxiety are being treated so that the employer knows how its money is being spent. It should also include an independent, professional clinical audit.
Scare statistics alone, even when designed to enlighten, seldom result in behaviour change. The data linking smoking to cancer was known by smokers for many years, but significant changes in smoking behaviour did not occur until employers and service establishments stopped allowing it on their property. Similarly, knowing that depression and anxiety cost employers billions of dollars each year does little without a definite road map out of the dilemma and a decision to place resources where they will do the most good.
A checklist
What to ask an EAP provider
Every employer concerned with mental health costs and employee productivity should look into the following issues to determine if the EAP can properly treat depression.
•Ask the EAP provider if it has professionals properly qualified to diagnose and treat clinical depression. The correct answer: “We have registered psychologists trained in CBT.”
•Ask the provider what procedures are in place to manage cases of depression and anxiety disorders. The correct answer: “We communicate with the client’s physician about medication and we provide the service of a properly trained CBT therapist.”
•Check EAP data to see if the category of problems reported as “psychological” or “depression” or “anxiety” have an average of 12 hours of counselling attached. If the average is much less, the provider has not been attending to the needs of people with these issues, and the organization is not receiving value for its investment.
If the provider is falling short, it may not be entirely its fault. The organization simply may not be funding the program adequately.
Robert Wilson is the CEO of Wilson Banwell Human Solutions, a Vancouver-headquartered national provider of employee and family assistance programs. He can be reached at (888) 689-8604.
In 2002 the Toronto-based Global Business and Economic Roundtable on Addiction and Mental Health estimated the cost of depression to Canadian employers at $33 billion. In September 2003, the Canadian Community Health Survey on Mental Health and Well-being, published by Statistics Canada, reported that one in 10 Canadians had significant problems with anxiety, depression or alcohol and drug dependency within the previous year.
Even as far back as Feb. 25, 2000, a Globe and Mail article cited Manulife Financial’s finding that psychiatric claims — primarily for depression — “are the fastest growing category of disability costs in Canada.”
But most employers don’t need these shocking statistics to know depression is a serious concern. Many believed they had their bases covered when they purchased an employee assistance program (EAP). After all, here was a benefit that was supposed to address employee mental health issues and lower employer costs through reduced health and disability claims.
But despite employers’ best intentions, the return on investment for mental health benefits appears to be getting worse, not better. So what’s going wrong?
The changing face of EAPs
As the EAP industry is largely unregulated, the importance of quality service is not well understood by most employers. Quality includes a combination of factors, but among the most important are the skill and training of the professional practitioner who is directly managing the troubled employee.
Any return on investment for an EAP is going to be a direct function of how well the professional handles the employee’s crisis — from initial consultation through to counselling, case management and ongoing support services.
Because what constitutes quality in the mental health field is not well understood and can easily be camouflaged through slick marketing and account management reports, the cost tends to be the dominant driver in EAP purchase decisions.
This has led to a price war in the Canadian EAP industry. The unfortunate result is a race to the bottom, with employers saving dollars in the short term and paying in the long term through rising benefit costs, reduced productivity and the loss of valuable employees.
The message to HR departments around the country is buyer beware. There are very solid arguments for providing an effective EAP for employees. But there’s also the risk of spending good money on a poor product.
Penny wise, pound foolish
The professional literature is quite clear in defining best practices around the treatment of depression. A combination of a specific set of medications along with cognitive behaviour therapy (CBT) usually results in the best outcomes. Proper CBT must be delivered by a professional trained to deliver it, usually a psychologist. The average number of sessions reported in the literature for this treatment is 12 and as high as 20.
Because the market has driven down the cost of EAPs, few programs can afford to hire staff qualified to diagnose mental illness, let alone treat it. Call-centre staff, regardless of training, cannot effectively diagnose over the phone or the Internet. Thus when employees suffering from depression finally reach out for help, they are not getting the qualified attention they require. Their illness is not properly treated and they often end up on disability.
Mental health and risk management
No employer wants an open-ended benefit, particularly one dealing with difficult-to-define mental health issues. So how does an employer control costs while providing effective employee support?
All employers are paying for the escalating rates of depression and anxiety among the workforce. Some costs are direct, such as employees on long-term or short-term disability who are consuming costly psychotropic medications. Some costs are indirect, such as steadily increasing insurance premiums.
Employers need to acknowledge this is a risk management issue. Treating depression and anxiety disorders solely through disability and extended health benefits is costly and ineffective. A properly funded EAP offers a proven economic alternative.
Research has demonstrated that, on average, CBT treatment for anxiety or depression costs slightly less than medication. More importantly, a combination of drug therapy and CBT costs dramatically less than the cost of managing these problems through disability benefits.
According to a 1995 article in the Clinical Psychology Review, the average cost for treating depression or anxiety disorders with CBT is between $1,800 and $2,000. The cost for medicating the problem as the only means of treatment is $2,200 to $2,500. Disability costs can run into the thousands.
An effective EAP should intervene early. A great deal can be done to prevent anxiety and depression in the workplace. Ask the EAP provider what programs it has to help the organization prevent these problems. The employer may also need to empower its EAP provider with the capacity to properly diagnose depression and anxiety and then properly treat these problems.
The EAP should provide statistical reports that show how employees diagnosed with clinical levels of depression or anxiety are being treated so that the employer knows how its money is being spent. It should also include an independent, professional clinical audit.
Scare statistics alone, even when designed to enlighten, seldom result in behaviour change. The data linking smoking to cancer was known by smokers for many years, but significant changes in smoking behaviour did not occur until employers and service establishments stopped allowing it on their property. Similarly, knowing that depression and anxiety cost employers billions of dollars each year does little without a definite road map out of the dilemma and a decision to place resources where they will do the most good.
A checklist
What to ask an EAP provider
Every employer concerned with mental health costs and employee productivity should look into the following issues to determine if the EAP can properly treat depression.
•Ask the EAP provider if it has professionals properly qualified to diagnose and treat clinical depression. The correct answer: “We have registered psychologists trained in CBT.”
•Ask the provider what procedures are in place to manage cases of depression and anxiety disorders. The correct answer: “We communicate with the client’s physician about medication and we provide the service of a properly trained CBT therapist.”
•Check EAP data to see if the category of problems reported as “psychological” or “depression” or “anxiety” have an average of 12 hours of counselling attached. If the average is much less, the provider has not been attending to the needs of people with these issues, and the organization is not receiving value for its investment.
If the provider is falling short, it may not be entirely its fault. The organization simply may not be funding the program adequately.
Robert Wilson is the CEO of Wilson Banwell Human Solutions, a Vancouver-headquartered national provider of employee and family assistance programs. He can be reached at (888) 689-8604.
