Resilience
To Cut Government Costs, Address Mental Illness
Mental health problems are extremely costly. Reducing them can save billions.
Updated January 18, 2025 Reviewed by Jessica Schrader
Key points
- To cut economic costs, the mental illness must be dramatically reduced.
- To reduce the economic costs of mental health problems their prevalence must be addressed.
If people are serious about cutting the cost of government, they should prioritize dramatically reducing social, psychological, emotional, and behavioral problems by supporting community-led mental wellness prevention and resilience initiatives.
Mental Health America’s 2024 report found that 23 percent of adults, or nearly 60 million people, now have experienced mental illness. Over 20 percent of youth ages 12 to 17 reported at least one major depressive episode, and 15 percent experienced a severe impairment.
These totals do not include the millions of Americans with unreported mental health conditions.
The aggregate costs of these problems are enormous. A paper produced last year for the National Bureau of Economic Research said mental health conditions now cost the U.S. economy more than $280 billion annually. This is comparable to a recession every single year and is equal to 1.7 percent of the nation's annual consumption.
Giant costs have also been found at the state level. A study in Indiana, for instance, found that untreated mental health problems in 2019 produced an estimated $4.2 billion in annual costs. This was 1.2 percent of that state’s annual gross domestic product and represented approximately 100,000 jobs.
Think about it. Each year mental illness has recession-level effects. Yet, rather than changing policies as governments normally would to resolve any other recession, they have mostly pursued more of the same.
Today’s mental health problems has vast direct costs resulting from lost economic productivity, increased mental and physical health treatments and human services, and effects on the workforce. Hefty indirect costs also result from reduced consumer spending, impacts on education and worker training, and mental health-related crime and violence. One way or another, the burden of many of these costs falls on the federal government.
Extreme weather disasters including wildfires and hurricanes, for example, have been found to directly increase the rates and costs of acute stress, post-traumatic stress disorder, and associated psychiatric co-morbidities. Research also concluded that the crisis is contributing to the increased prevalence and costs of nutritional deficiencies, leading to increased rates of depression, bipolar disorder, and child neurocognitive disorders.
This problem is also activating other significant yet difficult-to-quantify costs, including the suffering caused by people with mental health-related substance abuse disorders, homelessness, and poverty in their families and communities.
Few people see it, but today’s mental illnesses are blocking solutions to the climate crisis. That’s because stressed and traumatized people usually retreat into a self-protective survival mode that reduces their ability to adapt to changing circumstances or embrace changes like a shift to renewable energy.
So far, the primary response of most elected bodies to mental health has been to improve treatment systems. This is important. However, even with more training, there will never be enough providers to meet the demand. In addition, research shows that up to 50 percent of the people who need mental health services will not engage due to fears of being stigmatized if they participate, conflicts with religious beliefs, and other concerns.
Mental health services are also reactive. They treat individuals, mostly one at a time, only after they experience symptoms. They do not proactively prevent problems within large populations.
This underscores that merely increasing the availability of mental health services cannot resolve the problem. Population-level prevention must become a top priority. This requires the use of a public health approach to mental wellness and resilience.
A public health approach is very different from the individual treatment model. The premise is that interacting social, economic, and environmental factors activate mental health problems, not just individual genetics or early childhood experiences.
To address the intersecting drivers, broad-based coalitions of residents and organizations are formed in communities that implement multiple interventions to strengthen “protective factors”—norms, practices, and policies—that shift the culture of the community to prioritize healthy, safe, just, and resilient perspectives and behaviors. The coalitions also work to minimize “risk factors”—which are features that undermine wellness and resilience.
Most community-led prevention initiatives, for example, help youths and adults develop bonds with individuals and groups that promote pro-social thinking and behaviors. These bonds minimize the social isolation and loneliness that are today creating pervasive mental health struggles. They also provide residents with the mutual aid and emotional support needed during accelerating climate crisis-generated extreme weather disasters.
Many community-led initiatives also teach residents trauma-informed emotional self-regulation skills, help local organizations adopt practices that enhance mental health, and in other ways build a local culture that boosts individual and collective mental wellness, safety, and resilience.
Prevention initiatives can be more cost-effective than treating or managing mental health conditions after they appear. A joint analysis by the National Academies of Sciences, Engineering, and Medicine, for example, determined that every $1 invested in prevention and early intervention for mental health and addiction programs yields $2 to $10 in savings by preventing decreased productivity and high health care costs and reducing criminal and juvenile justice costs.
Research on the Communities That Care model, which hundreds of community-led coalitions have implemented across the U.S., found that $5.31 was returned for every $1 invested due to reductions in youth substance abuse and delinquency.
The World Health Organization has also determined that community-based mental health initiatives are cost-effective and produce good outcomes.
To reduce the costs of government, the current state of mental health must be addressed. Community-led mental health prevention and resilience-building initiatives are key to accomplishing this.
