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The economic cost of physical ill-health and serious mental illness

11 April 2016

A new report released by the Royal Australian and New Zealand College of Psychiatrists (RANZCP) confirms recommendations from the National Mental Health Commission’s National Review Contributing Lives, Thriving Communities.

The report provides further evidence that many Australians with a mental illness are experiencing much higher rates of physical ill-health and not receiving the physical health care and support they need, resulting in a substantial cost impact on individuals and on the national economy. 

The RANZCP report The economic cost of serious mental illness and comorbidities in Australia and New Zealand looks specifically at those with a serious (or severe) mental illness. It provides useful insight into a highly vulnerable group who on average die decades younger than the general population, often due to preventable or treatable physical health problems.  

The report calculates the economic cost of premature death of people with mental illnesses including schizophrenia, bipolar disorder, psychoses and severe anxiety and depression to be $15 billion (.9% of GDP) annually, and the cost overall to be $56.7 billion (3.5% of GDP).

Professor Allan Fels, Chair of the National Mental Health Commission, welcomes the report. “As an economist, I want to emphasise that mental health is a significant problem for our economy” Professor Fels said.

“Many people do not receive the support they need, and governments get poor returns on substantial investment. In particular, mental ill-health results in a substantial loss of productivity, and for Australian business this results in around 12 million days of reduced productivity a year”.

The Commission has been working with stakeholders to develop a ‘National Consensus Statement on Identification and Care for the Physical Health of People with a Mental Illness’, which addresses these inequalities. The Consensus Statement is now in its final draft and will be released later this year.

The RANZCP report provides further evidence of the need for coordinated care packages for people with severe and complex needs. Poor physical health compromises mental health recovery, and has a substantial cost impact on the national economy.

The Commission will continue to monitor and advocate for those with a serious mental illness to ensure they receive the physical health care and support they require. This will be carried out in partnership with professional colleges, consumers and carers, the Commonwealth, states and territories and some service providers.

"Even the most disadvantaged Australians should be able to lead a 'contributing life,' whatever that means for them and this simple goal will be our touchstone and yardstick."

Chair Prof Allan Fels AO
National Mental Health Commission

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