Strengthening the Case for Investing in Canada’s Mental Health System: Economic Considerations

In 2013, the Mental Health Commission of Canada (MHCC) The Mental Health Commission of Canada released Making the Case for Investing in Mental Health in Canada, which set out a clear economic argument for investing in the mental health of people in Canada. Forecasting ahead three decades, the MHCC projected the serious economic and social ramifications of failing to make mental health a priority.

Strengthening the Case for Investing in Canada’s Mental Health System: Economic Considerations, does more than reiterate the importance of directing funds to mental health. This report highlights nine important Canadian studies that underscore the cost offsets of investing in evidence-based approaches. These effective interventions mirror the recommendations put forward in Changing Directions, Changing Lives: The Mental Health Strategy for Canada, and the 13 provincial and territorial mental health and addictions strategies.

Preview of the Issues

The MHCC estimates that the total cost to Canada’s economy incurred by mental health problems and illnesses is currently well over $50 billion annually, or nearly $1,400 for every person living in Canada in 2016. Health economists distinguish between three types of costs. First are direct expenditures: private and public expenditures incurred in providing services and supports in the illness treatment, care, and recovery process. Second, indirect or spillover costs are those absorbed by the economy. Third, some studies also estimate the intrinsic value of better health and subjective consequences of illness, such as measuring loss of quality of life (quality-of-life-adjusted life-years), disability (disability-adjusted life-years) or willingness to pay. These are known as intangible costs.

Spending on evidence-based direct services and upstream interventions can mitigate indirect and intangible spillover costs, whether from lost productivity, disability insurance payments, premature death, disability limitations, or costs arising from social exclusion or poor quality of life. The Conference Board of Canada’s latest report calculated indirect costs due to depression alone at $32.3 billion. This is well over what is spent on providing public services for all mental health conditions. As many experts now attest, spending on effective services should be viewed as an investment in, rather than a cost to, the economy.

Examples of cost-effective programs in community mental health care include using community-based rapid-response teams, which can halve health care costs per young person with suicidal thoughts, or creating improved access to psychotherapy, which saves about two dollars and creates improved quality of life for every dollar spent. This is also true for adopting the housing first approach for helping people who are homeless and living with serious mental illnesses. Ontario’s Better Beginnings Better Futures Program is an example of an effective public-health approach to primary prevention and early intervention. It has replicated earlier targeted comprehensive early intervention programs. This Ontario program saves four dollars in public expenditures for every three dollars it spends.

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