Depression, Related Costs on the Rise in the Workplace

June 9, 2004
According to a new study published in the American Journal of Psychiatry, depression in the workplace has risen over the last 10 years, costing American business an estimated $50-$80 billion a year.

To raise awareness about depression in the workplace, PhRMA, the U.S. Chamber of Commerce, the American Psychiatric Association and other groups are coming together to highlight the problem and provide tools for employers to help them understand the benefits of providing treatment options to depressed employees.

Symptoms of depression include fatigue, inability to concentrate and lack of motivation all of which result in reduced productivity and increased workplace costs.

Employees suffering from depression are affected, on average, about 30 to 50 workdays per year by absenteeism or low productivity, and they sustain average annual medical costs that are $2,000 to $3,000 higher than those of other employees. The combination of missed days, lower productivity when on the job, and other associated issues costs the U.S. economy approximately $50-$80 billion annually, yet a high percentage of those with depression do not receive treatment.

Even a small company can experience significant costs from depression. A company with 500 employees, for example, can expect about 25 employees to be suffering from depression at some time during a 12-month period. This amounts to 750 to 1,250 days lost each year to absenteeism and low productivity.

"Employers and employees both come out ahead when employees with depression receive the right medical treatment, with both counseling and medicines. Employers see improved work productivity and decreased absenteeism," said Alan F. Holmer, president and CEO, PhRMA, which stands for the Pharmaceutical Research and Manufacturers of America. The group represents research-based pharmaceutical and biotechnology companies.

A new, Internet-based calculator available at www.depressioncalculator.org helps employers compute the financial benefits of treating employees with depression. The calculator was developed by the HSM Group Ltd., a health care consulting firm based in Scottsdale, Ariz., with support from PhRMA.

The calculator estimates the incidence of depression and its impact on a company's work force, based on the company's size, type of industry, location and the age/gender breakdown of employees. It computes the expected number of days each year that employees will be absent or suffer low productivity due to their depression and calculates the associated costs to a business. Finally, it projects the net savings the company can expect, after accounting for the cost of treatment, if employees obtain treatment. An employer can change the key assumptions so that the calculation best reflects the characteristics of that particular work force.

"This calculator integrates extensive research findings from peer-reviewed literature and turns them into useable results for employers. It's an important research-based management tool that lets employers and others see the whole picture on the economics of bringing patients with depression into needed medical care," said Sheryl Bronkesh, president of the HSM Group Ltd.

About the Author

Sandy Smith

Sandy Smith is the former content director of EHS Today, and is currently the EHSQ content & community lead at Intelex Technologies Inc. She has written about occupational safety and health and environmental issues since 1990.

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