Mental illness in England cost £50 billion in 2007

A major year-long study into the cost of meeting the mental health needs of the nation over the next two decades is published today by the King’s Fund. Paying the Price: The Cost of Mental Health Care in England to 2026 suggests that significant investment in evidence-based services could help thousands back to productive work.

The report reveals that mental illness in England cost £50 billion in 2007. Almost half, £22.5 billion, represents money spent on direct NHS and social care services to support people with mental disorders. More than half, £26.1 billion, represents the estimated cost to the economy of earnings lost because of the thousands of people unable to work due to their mental illness.

Although it finds that the prevalence of most mental disorders, including schizophrenia, is likely to remain stable over the next 20 years, it predicts a huge increase in dementia - up by almost two-thirds (61 per cent) from 582,827 to 937,636 due to an ageing population.

As a result of this, and above inflation rises in health care costs, the bill for mental health services is expected to grow from £22.5 billion to £47 billion.

However, there are potential savings. The report suggests that there are ways to reduce the number of expensive hospital inpatient days for patients with schizophrenia and bipolar disorders, to improve early detection and treatment of dementia and to increase the proportion of people with depression and anxiety disorders who are well enough to work.

Professor Martin Knapp, co-author of the report said:

‘We found that paying for more people to be treated would create net savings as reductions in lost employment costs would outweigh treatment costs. With a third of adults with depression and a half with anxiety disorders not in touch with services there is significant potential to treat more people with those illnesses and make savings because of the boost to the workforce.

‘The problem is that the costs of care fall largely to the health service whereas the economic benefits mostly accrue elsewhere -  to employers, the taxman, the benefits system and the criminal justice system. The government, the NHS, social services and employers need to extend efforts to help people with mental health needs who are of working age but not in employment to get back to work.’

Commenting on the dramatic increase in cases of dementia predicted for 20 years’ time Niall Dickson, King’s Fund Chief Executive, said:

‘The fact that we are living longer is a cause for celebration but it will mean that the health and social care systems will have to cope with a dramatic increase in the number of people suffering from dementia. Unless there is a major breakthrough in drugs to arrest the course of this illness, there will be a great need for extra care and support, some of it quite intense. The projections in this report should help policy-makers and those responsible for local services plan for future demand.

‘It is also clear that there is still a high level of unmet need and that will need to be addressed. But the report is reassuring in the sense that there is no evidence that, as a society, we are becoming more anxious or depressed or that many more of us are suffering from serious conditions such as schizophrenia and severe personality disorders.’

The report contains chapters on eight different specific disorders: depression, anxiety disorders, schizophrenic disorders, bipolar and related conditions, eating disorders, personality disorder, disorders affecting children and adolescents, and dementia.

Download Paying the Price: The Cost of Mental Health Care in England to 2026

Notes to editors: 

  1. Paying the Price: The Cost of Mental Health Care in England to 2026 by Paul McCrone, Sujith Dhanasiri, Anita Patel, Martin Knapp and Simon Lawton-Smith is published on Wednesday 28 May 2008.
  2. The report’s key findings include the following (see the Executive Summary for more details):
    • The prevalence of all mental disorders is likely to remain stable over the course of the next 20 years
    • Due to an aging population incidences of dementia will increase by 61% from 582,827 to 937,636.
    • Current mental health service costs are £22.5 billion. This includes direct NHS costs, social service costs, the estimated economic value of informal care and where appropriate costs to the criminal justice services.
    • Mental health service costs are projected to increase by 45% over the next 20 years from £22.5 billion to £47 billion, due to more cases of dementia and the projected above inflation increase in health care costs.
    • The cost of lost employment is currently estimated to be £26.1 billion which is currently more than the direct NHS and social care services costs of supporting people with mental disorders. The cost of lost earnings is projected to rise to £41 billion by 2026.
    • There is the potential to help more people achieve better mental health as many people with mental illnesses currently do not receive treatment. It is estimated that 35% of working age adults with depression are not in touch with services and therefore not in receipt of any treatment. 51% of adults with anxiety disorders are not in contact with services and of those who are, 46% do not receive medication or psychological therapy.
  3. The report’s recommendations include the following (see Chapter 12 Conclusions, for more details):
    • Future governments should ensure that funding for health and social care services keep is sufficient to meet expected future health need.
    • There should be cross-governmental work with employers and mental health services to increase understanding of mental health and generate greater employment opportunities for people with mental health problems.
    • Primary Care Trusts should commission more evidence based interventions for people with depression and anxiety disorders
    • PCTs should aim to treat more people who have depression and anxiety disorders who don’t currently receive treatment.
    • The expansion of crisis services for those with schizophrenia and bipolar and early interventions for those with psychosis would help reduce inpatient days and save money.
    • Given the major cost impact of dementia a priority should be made of early detection and treatment of dementia by GPs and research into cost-effective treatments by pharmaceutical companies.
    • More research should be done on the cost-effectiveness of mental health promotion.
    • The Department of Health should publish better and more frequent updates on incidence and prevalence of mental disorders and service use.
  4. Potential annual savings from interventions to treat depression, anxiety disorders, schizophrenia, bipolar disorder and dementia are outlined in Table 2 in the executive summary.

    They include possible annual savings in 2026 of:

    • up to £61 million if medication is provided to people with depression who are currently untreated
    • up to £120 million if medication is provided to people with anxiety disorders who are currently untreated
    • up to £37 million if there is an expansion of crisis intervention teams to support people with schizophrenia.
  5. Professor Martin Knapp, Director of the Personal Social Services Research Unit at the London School of Economics, Professor of Social Policy and co-director of LSE Health and Social Care, and Professor of Health Economics and Director of the Centre for the Economics of Mental Health at King’s College London, Institute of Psychiatry.
  6. For further information or interviews please contact the King’s Fund media and public relations office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185.
  7. The King’s Fund  is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications: information and library services; and conference and meeting facilities.