Data can transform group plans, and this is needed, but a shortage of data today about mental health claims and costs, means the true scope of the problem remains unknown, according to an extensive research report published by the Geneva Association.
Entitled Promoting peace of mind: Mental Health and Insurance, the new report about the costs and the risks associated with poor mental health says a focus on data can reduce the number of mental health-related claims, average costs and improve user outcomes.
Regarding the scope of the problem, however, they say this is unknown to policy makers and employers who negotiate group health plans for their employees alike. They also say the extent of the problem is unknown to life and health insurers.
“Better data is needed to demonstrate demand – this is a prerequisite for increasing access to mental health services and protection,” writes the Geneva Association’s managing director, Jad Ariss. “What we can quantify reveals that the cost of the mental health crisis is staggering.”
He continues, saying poor mental health costs economies around the world USD $6-trillion each year in medical expenses and lost productivity.
“For individuals living with poor mental health, this translates into wage and employment gaps and curtailed life chances. (The report puts numbers to the phenomenon, as well. Data collected by 25 Organisation for Economic Co-operation and Development countries, five years before the pandemic, revealed a 20 per cent employment gap and 17 per cent wage gap between people with and without mental health problems, for example.) Poor mental health has also been linked to an increase in mortality,” researchers write.
“All of this translates into significant insurance claims,” they add, saying life and health insurers pay out USD $15-billion each year in related claims. Although the report is global, it includes data points on Canada where insurers experienced a 75 per cent rise in claims related to poor mental health between 2019 and 2021.
“The well-established link between mental and physical health problems may mean that even health plans that exclude mental health could be affected,” the report states.
It goes on to define mental health using existing research, looks at the determinants of mental health and discusses the economic toll poor mental health can have, including health systems costs, costs to individuals and to insurers. It also looks at factors affecting and impeding mental health insurability, makes recommendations and, notably, provides an extensive literature review, supplemented with global data and contributions from 16 senior underwriting and claims experts.
It suggests that firms consolidate the data they do have to engage in effective triaging to offer the right levels of support. “There is evidence to suggest that this can reduce the number of mental health-related claims, the average cost of claims and most importantly, improve user outcome.”
Among its list of recommendations, the report also says evidence suggests there is significant consumer demand for insurers to deepen their role. Citing a survey of 4,500 people conducted by Swiss Re across seven mature insurance markets, they say consumers had a noticeable appetite for protection against common mental health problems like depression, preferring these coverages over those for complex or rare conditions.
“Surprisingly, anxiety and depression – not more complex mental health conditions such as bipolar or psychotic disorders – are the most common types of mental health problems,” says the Geneva Association’s director of health and aging, Adrita Bhattacharya-Craven. “Our report lays out the facts for insurers so they are equipped to better align their mental health strategies with realities. There is a big opportunity for the insurance industry to have more impact by leveraging what they already offer.”
