Media releases

May 8, 2013

Expenditure on mental illness in Australia revealed

For the first time in Australia, a new report has shown the overall cost of supporting people with a mental illness to be at least $28.6 billion(i).

Previous research has largely limited analysis to health expenditure only, such as the AIHW's $6.3 billion estimate(ii). However the new research, The Case for Mental Health Reform in Australia: a Review of Expenditure and System Design, conducted by Medibank and Nous Group, is four times this figure as it takes a whole-of-system look at expenditure on supporting people with a mental illness in Australia, including the activities that lie outside hospital services and community and public health services.

The research is being launched today in partnership with beyondblue and highlights that, whilst both policy attention and new funding are being directed towards mental health, there are still significant numbers of mentally ill people not seeking help or receiving appropriate treatment.

Dr Matthew Cullen, Group Executive of Medibank Health Solutions and a practising psychiatrist, explains further: "The critical issue with mental illness treatment in Australia is that individuals with mental health needs are not receiving adequate support because the system is fragmented and uncoordinated.

"People fall between the gaps of the healthcare system and the social services systems, and even between the various components of the social services system such as housing and income support.

"We need to address these gaps urgently. While governments since the 1990s deserve credit for lifting the effort, we can do much more to coordinate care for our mentally ill."

beyondblue CEO Kate Carnell AO believes this report is great news for government.

"It shows that the issue is not how much is being spent on mental health, but how the money is being spent.

"The current system is complex, fragmented and very hard for users to navigate, especially as they have mental health issues, which can make planning and decision making very difficult."

Historically, specialist mental health support has been provided by state governments in Australia, with housing support provided by different departments and programs like income support and employment services provided by the federal government. This meant that people with mental illness have to grapple with multiple layers of bureaucracy in order to get the support they need.

"Australia urgently needs reform to make it easier for people to get the information, services and support they need in a coordinated and timely fashion," Ms Carnell says.

Dr Cullen believes that Australia has an opportunity to lead the world in end-to-end mental health system redesign to deliver better quality and outcomes at a lower cost. Major system changes are needed, covering detection to diagnosis to treatment to ongoing recovery. Crucially, the system needs to integrate health and non-health support and funding.

Dr Cullen concludes: "As both a funder and provider of services, Medibank has shown through other health services that it can address systemic issues through the advancement and coordination of healthcare. We can take many of the learnings we have in improving coordination of care and apply them to mental health.

"We have no choice but to look at new ways, as the current system is unsustainable for taxpayers, other funders and an unbearable strain on the mentally ill and those who support them."


The Case for Mental Health Reform in Australia: a Review of Expenditure and System Design

Conducted by leading Australian management consulting firm, Nous Group and Medibank, the research provides a comprehensive picture of the direct financial costs of supporting people with a mental illness in Australia; examines the structure of the current Australian system; and reviews domestic and international examples in which integrated approaches to mental healthcare and social services deliver better health outcomes and a better experience for consumers as well as improved cost effectiveness.

(i)This estimate specifically excludes indirect costs such as lost productivity.

(ii) AIHW 2012. Health expenditure Australia 2010-11. Health and welfare expenditure series no. 47. Cat. no. HWE 56. Canberra: AIHW.

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