Investment in mental health: low risk, high reward
Author: Connie Zhang | Project Leader
Disparity in economic development across the world has long been a topic of interest - for economists, for political scientists, for international organisations. Some of the prevailing theories presented in an attempt to solve this age-old debate attribute economic growth to natural geographic conditions (Diamond, 1997), to the inclusiveness of institutions (Acemoglu and Robinson, 2012), and to cultural mores (Landes, 1998). The theory that accumulating and investing in human capital is a key driving force of sustainable economic development was born to contribute to this exact discourse.
A story of economic growth
Human capital comprises the accumulated knowledge, skills and health of people which enable them to exercise their potential as productive members of society. In a rapidly evolving economy, investing in human capital has been promoted as a vital step in achieving greater equity and sustaining economic growth. Conversely, failure to strengthen human capital stifles the economy’s productivity.
To stimulate this agenda, the World Bank launched their Human Capital Index (HCI) in 2018 which calculates a numeric value between zero and one to quantify the expected productivity of the next generation. Measured using five indicators which consider the contribution of health and education to human productivity, the HCI concluded that 56% of children will exercise half their productivity potential whilst 92% will exercise 75% of their potential (World Bank, 2018).
Source: https://www.worldbank.org/en/publication/human-capital
Currently, Australia is ranked 7th out of 157 countries on the Human Capital Index, having scored in the upper quartile for every indicator of health and education. Despite this, our next generation is still only expected to be 80% as productive as they could be. Put simply, Australia is projected to lose 20% of its potential income.
Due to its relatively high rank on the HCI, Australia is in a position to consider less overt forms of human capital. This is distinct from the goal of developing countries, and the prevailing understanding of human capital investment, where the focus is on ensuring sustainable access to quality education and malnutrition. Indeed, Australia’s healthcare system is lauded as one of the best in the world, and we have the necessary infrastructure and facilities to solve most major health threats. Australia, therefore, has the privilege and the moral obligation to focus on the silent epidemic -- mental illness.
The case for mental health
Mental health, though theoretically incorporated under healthcare, is an oft neglected area of the Australian health system. Yet, 1 in 5 Australians struggle with mental ill-health each year (Productivity Commission, 2019). Mental ill-health, both severe and moderate, hinders Australians from social participation and negatively impacts their productivity (ABS, 2008). Australians with mental ill-health are less likely to be employed – and even when employed – are more absent from work and less productive while at work than their mentally healthy counterparts. Importantly, these indirect costs that are often overlooked actually amount to approximately double the expenditure of healthcare on people struggling with mental illnesses.
https://www.pc.gov.au/inquiries/current/mental-health/issues/mental-health-issues.pdf
“ If countries want to improve their relative ranking in the Human Capital Index, they must start investing seriously in integrated programs to promote mental well-being and prevent and treat mental ill-health.”
The following policy proposals aim to improve mental health services as a form of investing in human capital in Australia. With regards to the social and economic benefits of reform in Australia’s mental healthcare system, the goal of these recommendations is to raise our HCI and help maximise the next generation’s productivity potential.
Recommendation 1: Invest in programs and services which focus on the prevention and early intervention of mental ill-health in children and youths
According to Beyond Blue, approximately half of all severe mental health issues in adulthood begin before the age of fourteen. As humans develop their sense of identity between 6 to 14 years old, their emotional, social and physical development have lasting legacies on their progression into adulthood. Thus, the potential positive effects of early intervention should not be understated.
Each state and territory’s respective Department of Education should commission evidence-based emotional learning programs in primary and secondary schools for children and parents to assist with their development of positive mental health. The Longitudinal Study of Australian Children (LSAC) contains indicators of parent and child mental health, and can help to evaluate the success of these programs by monitoring these indicators before and after the programs’ administrations.
Along with these programs, state governments should mandate schools, and where required, fund the recruitment of accredited psychologists to provide early childhood and youth mental health screenings while assisting with emotional distress.
For youth who have been in contact with the child protection system, especially those who have been in Out-Of-Home Care (OOHC), targeted mental wellbeing programs should be implemented to help with trauma, displacement, and emotional disruption. Likewise, it is vital to provide therapy and cognitive support for children whose family members struggle with mental ill-health.
Attempts to create positive childhood and adolescent experiences are directly linked to people’s productivity potential later in life. Tangibly, it better equips people with the skills to enter the workforce as they are more receptive to education which encourages higher equality and attainment of education (Productivity Commission, 2019). Intangible benefits from positive adolescent mental health such as greater self-esteem and positive social development motivate people to engage in society and maximise their potential.
Recommendation 2: Invest in programs and services which promote positive mental wellbeing in the workplace
Mental ill-health presents two issues in the workforce: absenteeism wherein workers who struggle with mental health issues are more likely to be absent from work, and presenteeism where the productivity of workers is severely impacted by their mental ill-health. The marginal impact of mild depression on labour productivity is approximately 3.9% while severe depression has an impact of 9.2% (KPMG, 2018). These alarming statistics emphasise the need to act now.
The WorkSafe divisions of each state and territory should strengthen regulations on eliminating psychosocial hazards in the workplace. More efficient outcome monitoring solutions must also be developed by WorkSafe to ensure that organisations are taking sufficient measures to support mental wellbeing in the workplace. The NSW government currently partners with the Black Dog Institute, a not-for-profit facility, to deliver free workplace mental health training programs aimed at improving mental health literacy, reducing stigma, and equipping workers with strategies to help them manage their mental wellbeing (Black Dog Institute, 2019). All state and territory’s Department of Health should emulate this and fund evidence-based training programs which help foster positive mental health in the workplace.
Improving workplace conditions for mental wellbeing is crucial for improving productivity as well as providing greater opportunities for social interaction, both of which are key investments in human capital.
Recommendation 3: Prioritise investment in e-Mental health services to support underserved rural communities
Accessibility to specialised mental health services and professionals is limited in rural communities. E-Mental health services can help to alleviate this issue by providing psychotherapy and treatment for mental health disorders through telephone, video calls and virtual applications.
Source: https://mhsa.aihw.gov.au/resources/workforce/
“Even though the Government might be spending money to get [psychologists] to come to these small country towns, not everybody’s still getting seen because [in] a day, you’re not going to see everybody in town.”
In an age where technology is becoming more accessible, the Federal Department of Health should prioritise the development of e-Mental health services to better serve the needs of our rural populations. Whilst commonly understood as an effective method of treating mild to moderate mental illnesses, further development of e-Mental health services can also transform them into screening services to identify when people in rural communities require further support for more severe mental conditions.
For Australia to achieve greater equity amongst its populations through human capital investment, the government must focus on bettering the mental health of all communities.
Looking ahead
For too long, mental ill-health has flown under the radar for considerations into investing in Australia’s human capital. However, with both a Victorian Royal Commission and Productivity Commission Inquiry being conducted into mental health at present, it is clear that reform in our mental healthcare system is vital to the development of our society. These inquiries further provide the government with the data and research necessary in shaping the policy proposals which will invest in the future of Australians.
“Mental ill-health has huge impacts on people, communities and our economy but mental health is treated as an add-on to the physical health system. This has to change.”