The U.S. Mental Health Epidemic Costs the Nation the Equivalent of a Recession Every Single Year
Community-Led Initiatives that Use a Public Health Approach to Mental Wellness and Resilience Are Key To Reducing Both the Prevalence and Costs of Mental Health Issues
The U.S. is experiencing a mental health epidemic, with over 1 in 5 Americans experiencing diagnosed difficulties. This total does not even include the millions of people with unreported severe conditions. Research also shows that community-led mental health prevention and resilience building programs can save significant money, while improving the health, safety, and wellbeing of individuals, families, and communities. The mental health and psychosocial issues generated by the climate-ecosystem-biodiversity (C-E-B) crisis demand that we expand our nation's approach to mental health to prioritize community-led initiatives.
A 2024 National Bureau of Economic Research study concluded that mental health problems cost the U.S. economy over $280 billion annually. This is comparable to an economic recession every single year.
Another study released that same year determined premature deaths related to mental health inequities resulted in $278 billion in costs between 2016 and 2020. The study projected that unaddressed mental health inequities could produce about $14 trillion in excess costs between 2024 and 2040.
Depression alone costs the U.S. $236 billion in 2018, reflecting a 35% increase since 2010, driven by medical services and medications, workplace, and suicide-related expenditures, and those costs have undoubtedly risen since then. A study of Adverse Childhood Experiences, which often generate mental health problems in adulthood, found that ACEs cost the U.S. a staggering U.S. $12.1 trillion annually due to lost productivity, direct spending on health care, and other factors.
Huge costs have also been found at the state level. In Indiana a 2019 study of over 429,000 residents found untreated mental health issues cost the state U.S. $4.2 billion, which was equal to 1.2% of that year's GDP.
Both direct and indirect factors contribute to the massive costs of the U.S. mental health epidemic.
The Direct Costs Include:
· Lost Productivity:
o 75% of people with mental health disorders say it affects their productivity at work, and mental health is the most expensive employer health costs across many industries.
o Mental health struggles can impair cognitive ability, increase absenteeism, decrease focus, hinder innovation, and increase workplace accidents.
· Costs of Mental Health and Physical Health Treatments:
o Mental health treatment—therapy, medication, and hospitalization—cost money.
o Co-morbidities often exacerbate physical health problems and lead to worse outcomes. For example, people with mental health issues are more likely to develop heart disease or cancer.
o Mental health conditions often increase physical health treatment costs. Treating diabetes, for example, is more expensive when accompanied by depression.
o Untreated mental health issues, including depression, can result in greater utilization of primary and specialty healthcare services due to related physical health complications.
· Costs of Human Services:
o People with mental health problems may be unable to work, leading to increased reliance on Supplemental Security Income and Social Security Disability programs.
o Mental health issues can be linked to housing insecurity, with 30-35% of unhoused individuals having mental health conditions. These individuals often face unemployment, poverty, substance use, and relationship difficulties, all of which may require social services.
o Family members are also likely to provide substantial informal care, which impacts their own employment potential, their mental and physical health, and their relationships.
· Costs of Impacts on the Workforce:
o The employment rate of people with mental health disorders is 10-15% below those with good mental health. People with mental health conditions are 6-7x more likely to be unemployed, and those with mild-to-moderate psychological problems are 2-3x more likely to experience unemployment than the general population.
o People with mental health issues also tend to have early mortality. For example, people with severe mental illnesses die on average 20 years earlier than the general population. This increases costs for employers due to impacts on staff morale and the need to hire and train new employees.
The Indirect Costs Include:
· Reduced Consumer Spending:
Individuals with mental health issues may spend less money due to financial stress or
lack of motivation. They often have a difficult time managing their finances, leading to
difficulty budgeting, neglecting bills, and a decreased ability to make sound financial
decisions.
· Losses in Education and Worker Training:
o Students with mental health issues often struggle academically, leading to potential loss of future workforce productivity. Severe mental health problems can increase the risk of dropping out.
o Mental health struggles can lower the ability to learn new skills and therefore change professions.
· Mental Health-Related Abuse, Neglect, Crime, and Violence:
o People with mental health problems can have a slightly higher likelihood of aggression or violence compared to the general population, especially when they experience substance use problems.
o Studies have linked untreated mental health issues to higher crime rates in certain communities.
o About 64% of U.S. adults reported having at least one adverse childhood experience (ACEs—such as child abuse or neglect) before 18, and over 17% reported four or more ACEs. People who experience ACEs have a higher likelihood of experiencing mental health problems in adulthood.
· Mental Health Impacts of Extreme Weather Disasters Generated by the Accelerating Climate-Ecosystem-Biodiversity (C-E-B) crisis:
Numerous disasters in 2024 caused widespread devastation. Hurricane Milton inflicted $60 billion in damage and claimed 25 lives, while Hurricane Helene caused $59.6 billion in damage and 232 deaths. Even excluding hurricanes, other extreme weather disasters caused over $60 billion in damage and killed 88 people.
o The costs of mental health problems generated by disasters are significant and rising, yet are almost never not fully accounted for in recovery plans.
o Research shows events like wildfires and hurricanes are increasing rates of acute stress, post-traumatic stress disorder (PTSD), and related co-morbidities.
o Disasters are also indirectly increasing the prevalence and costs of nutritional deficiencies, leading to increased rates of depression, bipolar disorder, and child neurocognitive disorders.
o Repeated extreme weather disasters can cause long-term regional impacts including economic instability, cumulative community stress and trauma, increases in poverty, domestic violence, substance use, and forced migration. Continual flooding and prolonged droughts have been associated with elevated levels of anxiety, depression, suicide, and PTSD.
In Addition to These Known Costs, There Are Significant But Difficult-to Quantify Mental Health Costs Such As:
· Personal Costs: People with mental health problems are more likely to experience stigmatization and discrimination, problems with employment, finances, relationships, physical health, social isolation, and loneliness, all of which can have high financial costs.
· Costs To Families: Mental health issues in a family can strain relationships and dynamics, directly and indirectly producing high costs. For example, parents with depression or anxiety increase the odds of their child developing depression or anxiety by two-fold.
· Costs to Communities: Mental health issues can affect neighborhood safety, security, and quality-of-life, and create mistrust and fear that reduce the capacity of neighbors to help each other during disasters and other adversities.
Improving the US. Mental Health Treatment System is Important—But Cannot Solve the Problem
Improving our nation's treatment system is important to reduce today’s mental health epidemic. This can include, for example, increasing the availability of mental health providers and community health centers with mental health providers, expanding virtual mental health services, and other actions.
However, this approach alone has significant limitations:
· Demand for mental health professionals far exceeds the supply: Even with more funding for training, there will never be enough providers to meet the needs of millions of Americans who struggle with mental health challenges.
· Lack of engagement: Nearly 50% of the people who can benefit don't seek treatment often because of perceptions that therapy is for the mentally weak, a luxury for the rich, conflicts with religious or cultural beliefs, or they fear being stigmatized by others if they participate.
· Mental health treatment is largely reactive and does not proactively prevent problems: Most treatment systems assist individuals only after symptoms arise. They do not preventing mental health problems across larger populations. However, today’s widespread stressors—including the distresses and traumas generated by extreme weather disasters—are increasingly affecting entire communities. Effective approaches must be proactive and work at the population-level within communities, and not just react to problems or focus only on individuals.
While very important, merely improving the nation’s mental health treatment system cannot resolve today’s epidemic. We must expand our approach to mental health by prioritizing population-level prevention, healing, and resilience building initiatives.
Widespread Prevention and Healing Requires a Public Health Approach Applied in Communities
Prevention can be more cost-effective than treating or managing severe mental health conditions after they appear. One study found, for example, determined that every $1 investment in prevention and early intervention for mental illness and addiction yields $2 to $10 in savings by reducing lost productivity, healthcare costs, and criminal justice expenses.
Large-scale prevention requires the use of a public health approach in neighborhoods and communities that addresses interacting individual, family, social, economic, and environmental stressors that influence mental health and psychosocial wellbeing, rather than focusing only on individual biomedical or early childhood factors.
A community-led public health approach engage coalitions of local residents, groups, and organizations in neighborhoods and communities that work to strengthen “protective factors” —norms, skills, practices, resources, and policies that foster a culture of health, safety, and resilience—while minimizing “risk factors” that undermine wellness and resilience.
· Community-led mental health prevention initiatives typically help youths and adults develop robust social connections that reduce the social isolation and loneliness fueling many of today’s mental health struggles. Social connections are also vital to provide the mutual aid, practical assistance, and emotional support residents need during severe stresses, emergencies, and disasters.
· Many community-led initiatives also teach trauma-informed emotional self-regulation and co-regulation skills, help residents clarify the values they want to live by in the midst of adversities, help local businesses and other organizations adopt practices that enhance employee and stakeholder mental health, and in other ways cultivate a culture that boosts individual and collective mental wellness, safety, and resilience.
Examples of Cost-Effective Community-Led Prevention Initiatives
· Washington Family Policy Council’s Community Public Health and Safety Networks: Between 1994 and 2011, the program averaged a $3.4 million annual budget. From 2002 to 2006, taxpayer savings from the Networks were estimated at $120 million per year, saving $35 for every $1 invested.
· Communities That Care Model: An initiative designed to prevent youth mental health related issues such as crime, substance use, and violence, has returned $5.31 for every $1 invested.
· Community Resilience Initiative (Walla Walla, Washington): This program led to youth school suspensions dropping from 798 per year to 135; discipline referrals and expulsions were both reduced by 50%, and police incident reports dropped from 48 to 17, all of which reduced costs.
These examples underscore the many benefits of community-led initiatives. The skyrocketing prevalence and financial costs of today's mental health epidemic underscore the urgent need to expand the U.S. approach by investing in these initiatives nationwide.
On July 24, U.S. Representatives Paul D. Tonko (D-NY), Brian Fitzpatrick (R-PA), Don Bacon (R-NE), and Senator Edward Markey (D-MA) introduced H.R. 4744, the Community Mental Wellness & Resilience Act. This bipartisan bill will address the nation’s mental health epidemic by directly funding community-led initiatives that use a public health approach to prevent and heal mental health issues caused by all types of toxic stresses, emergencies, and disasters.
I encourage you to contact your House and Senate members and urge them to co-sponsor and support the Community Mental Wellness and Resilience Act of 2025.
I also encourage you to speak with your Governor and state legislators, as well as local community and philanthropic leaders about establishing state and local mechanisms to fund and support community-led mental wellness and resilience building initiatives. A "model bill" for developing this type of local legislation can be found here.
It is essential to think systemically and respond holistically to dramatically reduce the number of people affected by mental health issues—and the costs of those problems. Community-led initiatives are the key to success.