Home / INTERVIEWS / Martin Knapp Interview – What is Mental Health’s Impact On The Economy?

Martin Knapp Interview – What is Mental Health’s Impact On The Economy?

Perspectives: How would you define mental illness, mental health?

8530463217_328671000d_zKnapp: People usually talk about individuals having poor mental health, and lots of us have poor mental health at different times but the question is then are you mentally ill enough to reach the threshold for diagnosis. Normally we say that about 1 in 5 people have mental health problems at any point in time, of which the most common are depression and anxiety. Then there are rare diseases like schizophrenia, bipolar disorder and manic depression which each afflict about 1 percent of the population. The other big mental health condition which has grown a lot over time is dementia, which is most common with older people. As the world population ages so that number grows.

P: Could you comment on the economic impact of mental health worldwide?

K: Well it’s huge. The biggest economic impact is on productivity because people are either not working or they are in a job performing poorly or entirely absent. Another reason why people would have lower productivity is premature mortality: through suicide or other reasons people have a shorter working life. If you look at the cost of depression in England, about 90 percent of the cost of depression is due to productivity loss, with about 6 percent due to healthcare costs and about 4 percent due to premature death so the proportionate impact of mental illnesses on productivity is huge. The other thing I want to say about productivity is that mental illnesses such as schizophrenia and bipolar disorder don’t really show themselves until teenage years or the early 20s: that’s exactly the time when most people are investing in serious human capital. So young people are trying to complete their school education but if you get a severe mental health problem at exactly that point – to use a technical term – you are going to screw up the rest of your life if you are not careful. This means that in terms of human capital acquisition you have a real challenge for those people because they are fine until they are 17 and then things go badly wrong. By the time they have their lives settled down again, which might take 3, 4, 5 years or more, they have potentially lost that opportunity for investment so it can damage them for a long time.

P: Is there a disparity in the proportionate provision of mental health services between developed and developing countries?

K: There is a difference in terms of proportion of spending. We spend 13 percent of the NHS budget on mental health, in China it is about 1 percent or less . Even in countries like Brazil and India which are doing pretty well economically now – the  proportionate spend on mental health is way lower than in the UK. Partly that has to do with cultural issues and stigma around mental illness and so on. Partly it is due to not having the workforce and it is partly because priority is still put on contagious diseases and life-threatening diseases. So malaria and ebola and various other diseases will always grab the lion’s share of the funding and probably rightly so but I think when societies have dealt with more emergency or urgent conditions then they turn to addressing mental health.

P: Do you think the WHO should allocate more of its budget of its development programs to mental health?

K: I think there is evidence that spending on mental health contributes to development – whether it is the best buy with your resources is an open question. But if you could help people with mental health problems such as depression and anxiety so that they are productive members of the workforce they are going to contribute to national productivity. If you can keep kids in school or adolescents through university then you are investing in that country’s resources and you are contributing to economic growth.

P: What effect does a financial crisis have on a population’s mental health?

K: It does have an impact. One finding is that there has been an increase in suicide rate but there is some contention about that: there is no doubt that the suicide rate in Western European countries for example has continued at a higher trend than what had been predicted on the basis of previous years trends – so it is above trend. But in Portugal and Spain which still have serious economic issues, the suicide rate seems to have plateaued – the argument I have heard from people in those two countries is that this is due to relativity. When everybody is in a difficult situation, the suicide rate responds partly to the relative position you have in society rather than your absolute position. We also know that generally speaking poverty is not a factor in mental health problems. To be poor isn’t very good but it’s uncontrolled debt – if you’re in debt and not in control of that situation – that is a major risk factor for depression.

P: The number of available beds for mentally ill patients has decreased by 30 percent since 2003. What are your opinions on the way mental health is funded in the UK today?

K: Firstly, as I said previously, relative to international standards, the UK actually spends a high proportion of its health budget on mental health. However, it is still not high enough relative to its burden of disease. If you aggregate its burden, it amounts to roughly 28 percent, while it gets about 13 percent of the funding, so there is an imbalance in that sense. That being said, there are many things that should influence how much gets spent, not just the burden, but nevertheless it does look like there is an imbalance. We’ve had a reasonable division in spending for a long time, but there does seem to be evidence of greater cuts in mental health in comparison to other areas in the last few years, and that is directly contrary to what this government has said, that there should be parity between physical and mental health. By giving responsibility to the NHS, the ministers have very little control over what happens in the health service, which is partly good and partly very bad. They’ve got to persuade local ministers to change the patterns of their spending and that’s a much tougher task.

P: Speaking of efficiency gains, do you think the way care is delivered for different diseases such as Schizophrenia or Bi-polar disorder could be improved without changing the way funding is allocated?

K: Let’s take two examples. Firstly depression. Medication works for most people, but research has shown that psychological therapy can be an excellent add-on – not replacement – for medication-based approaches to depression. Now initially there was very little of that around, but what we’ve done in England is to hugely expand psychological therapy access. It’s still not perfect, but it has improved treatment and overall is a very efficient use of resources. The second example is dementia. There is no cure for dementia, and drugs have little effect. However carers have a huge role to play in the management of the disease. There is now evidence that improving the mental health of carers has a direct impact on the patients they are caring for and slows down the rate of admission into care homes and hospitals. Now both psychological therapy and increased attention given to carers for dementia patients have low costs, but can make a huge impact. So there are certainly efficiency gains to me made in terms of how care is delivered.

P: What role does privatisation have to play in the provision of mental health by the NHS? Could It improve efficiency? What potential effects would an increase in privatisation have on care?

K: Well I have no ideological or empirical reason to argue for or against privatisation. The key thing is to evaluate how good a service is regardless of which sector it belongs in. If that service is good enough and you can sort out the transaction costs involved then go with it. In the past, research that I undertook showed that you found both the best and the worst care home in the private sector. The range in terms of standard of care provided can vary considerably. In some situations,  the local service for whatever reason may simply not be adequate, and there is a genuine need for private provision

P: Is enough being done to highlight the relationship between health issues and the economy in economics courses?

K: No. Here at the LSE in the Social Policy Department we now have an undergraduate course in Health and Social Care, which we didn’t have for quite a few years before. The course is very popular among students. I’m not sure there is enough room in core economics modules to include these issues, but any module related to health and policy should feature mental health. In my experience, courses focusing on health and the economy appealed to them because it provided an opportunity for them to study something more “real-world” than standard theory driven micro and macro modules.

P: Over the next century, where do you see mental health trends going?

K: In developing countries, mental health will become more of a priority for all sorts of reasons. Generally, this trend will not be driven by economics development considerations, rather scenarios such as the population demanding an increase in the provision of evidence-based interventions. Age will have a big impact. A girl born today in the UK has a 40 percent chance of living until 100. Also, if you live until 100, you have a 75 percent chance of having dementia. My granddaughter born last week has a 30 percent chance of having dementia at the age of 100. People seem to think that dementia is a rare condition, it definitely isn’t. The last thing I’ll say is that through research, we are uncovering long term trends related to mental health.  For example there is evidence that some children who experienced bullying are still having problems thirty years later. We need to do something to break that continuity, so I really hope that we invest in children over the next century as that will help reduce a lot of social problems in the future.

InterviewMartin Knapp is Professor of Social Policy at the London School of Economics. Since 2009, Prof. Knapp has also been Director of the School for Social Care Research funded by the National Institute of Health Research. Until early 2014 he was also Professor of Health Economics at the Institute of Psychiatry, King’s College London, having established the Centre for the Economics of Mental Health there in 1993.

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