Cost Effectiveness

Employers have much to gain from integrated care in both cost savings in health premiums and reduction of disability days (Broadhead, W., Blazeer, D., George, L., & Tse, C., 1990). IPC appears to make the treating of psychiatric disorders in primary care more effective. The correlation between improvement in psychiatric disorders and improved functioning seems intuitively obvious. In fact, improved occupational functioning is one of the most immediate results of psychiatric improvement (Ormel et al., 1993).

Anxiety and depression are associated with an average of 4 to 5 lost work days per month in addition to any days lost to accompanying medical conditions. The monthly cost to an employer of an employee with depression is over $400, significantly greater than the monthly cost of behavioral and medical treatment in primary care. The effective treatment of depression, for instance, keeps people on the job. In one study, patients with severe depression who improved reduced their disability days by 36% and patients with moderate depression who improved reduced disability days by 72% (von Korff, M., Ormel, J., Katon, W., Lin, E., 1992).

Historically employers have put the cost of disability from depression and the cost of health insurance in different categories. Some have developed Employee Assistance Programs to provide in-house counseling for substance abuse, depression and family problems of employees. Substantial savings have been documented in studies of behavioral health services offered by employers through employee assistance programs. A clear example was documented by the McDonnell-Douglas Corporation (1989). An independent company conducted a comprehensive longitudinal analysis of approximately 20,000 employees who were identified as having alcohol and drug problems or emotional problems over a period of four years. McDonnell-Douglas Corporation saved $4.00 in health costs, absenteeism and attrition for every $1.00 spent on the in-house counseling.

The Economics of Behavioral Health Services in Medical Settings by Alexander Blount, Michael Schoenbaum, Roger Kathol, Bruce Rollman, Marshall Thomas, William O’Donohue and C. J. Peek.

And the cost benefits of substance abuse treatment in primary care for populations who are prone to needing medical hospitalizations are immense. Want to save $10,000,000 in a fiscal year? Look at what collaborative care did at the Portsmouth (NH) Naval Hospital.