Opinion: The financial impact of undiagnosed depression

By Steve Melek

Depression, like many other physical and behavioral conditions, is a prevalent and expensive disorder. However, depression often goes undiagnosed and hence untreated for a significant period of time. The median delay from onset to a formal diagnosis and treatment is about six to eight years for depression.

The health care expenses and lost productivity due to diagnosed depression have been widely studied. While the lost productivity due to absence from work is relevant primarily for the employers, the health care costs are relevant to both the insurers and the employers. A less studied topic is the impact on health care and workplace productivity for costs from depression that has not yet been diagnosed. Do people with not-yet-diagnosed depression have higher health care costs than similar people without depression? Do they miss more time from work? Can the gap between depression onset and depression diagnosis be shortened? We are currently working on an analysis that seeks to address these questions.

We designed a matched case-control study using health care claim data to quantify the total healthcare and lost productivity cost attributable to depression prior to its diagnosis. To do so, we studied a depressed sample as compared to a non-depressed sample that was similar to the depressed sample in terms of age, gender, state of residence and health status. We hypothesized that given the average amount of time between onset and diagnosis of depression, elevated cost levels likely emerge in the depressed group prior to the depression diagnosis.

Our analysis revealed that our hypothesis was correct: the costs over the two year study period prior to depression diagnosis were significantly higher for those eventually diagnosed with depression. The increased levels of health care services and the lost productivity are both important contributors to the excess costs attributable to undiagnosed depression. We are in the final stages of this study and will be releasing the research results in the next couple of months.

Given the significantly increased costs for the depressed cohort, a logical next question is what can be done to control these pre-diagnosis depression-related costs. We have embarked upon a follow-up study to understand the characteristics of people prior to their depression diagnosis that could allow care managers to identify them sooner for intervention.

Care managers have limited resources to spend on screening and identifying depressed members. If they use those resources to screen patients at random, they are likely to find that 5-to-8 percent of the members are depressed, which is consistent with the prevalence of treated depression in a commercially insured population. We are investigating models that can help case managers more selectively target resources on screening, in an effort to identify a larger number of depressed patients. We are targeting the release of these results later this year.

We look forward to sharing the report on the excess costs of undiagnosed depression.

Steve Melek is a principal and consulting actuary with the Denver office of Milliman. He specializes in financial analysis of health issues and has worked extensively in the behavioral health specialty. This opinion piece is reprinted with permission from Milliman’s Behavioral Health Advisor.


Opinions communicated in Solutions represent the view of individual authors, and may not reflect the position of the University of Colorado Denver or the University of Colorado system.
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