Fact Sheet: The cost benefits of early intervention in mental illness


Depressed teen

Prevention and Early Intervention in Mental Illness

The Need: Mental illness affects 1 in 4 people in America and is the leading cause of disability worldwide. Researchers broadly agree that early intervention in serious mental illness, with intensive, coordinated services, is a defining factor in how far the disease progresses and the prognosis for a productive and successful life.

  • Every year, 100,000 young adults in the U.S. experience their first psychotic episode, frequently involving debilitating hallucinations and delusions.
  • Behaviors and symptoms that signal the development of a serious thought or mood disorder often manifest two to four years before a disorder is present.
  • Nonetheless, the average delay in receiving appropriate diagnosis and treatment is an astonishing 5 months after the illness takes root and the patient suffers his or her first psychotic break.
  • The longer the illness goes untreated, the more likely that young person will spiral down a damaging course, unable to graduate, unable to form relationships, unable to hold a job.

The Potential: Early intervention in mental illness comes with a measurable cost benefit. But most counties in California lack the training or capacity to offer such services.

  • A joint analysis by the National Academies of Sciences, Engineering and Medicine determined that every $1 investment in prevention and early intervention for mental illness and addiction programs yields $2 to $10 in savings in health costs, criminal and juvenile justice costs and low productivity.
  • A multi-year review by the National Institute of Mental Health found patients with first episode psychosis who received early intervention, with coordinated specialty care, experienced greater improvement in their symptoms, relationships and quality of life; and were more involved in work or school compared with patients who did not receive these services.
  • Nonetheless, just 24 of California’s 58 counties offer these comprehensive services, and we lack a statewide strategy for implementing such programs and measuring outcomes.

The Economic Toll: The failure to ensure every young person in every county in California has access to early intervention puts a heavy burden on taxpayers, employers, hospital systems and public services.

  • Untreated mental illness results in more than $193 billion in lost earnings each year in the U.S., according to national studies.
  • Mental disorders are the single most expensive category of health costs for many employers, across all industries and sizes.
  • Approximately one in eight visits to hospital emergency rooms involve mental health or substance abuse disorders, and such patients are more than twice as likely to require hospitalization compared with other types of patients.

The Human Toll: In most cases, we can effectively bring serious thought and mood disorders, including schizophrenia, bipolar disorder and major depression, into remission if we intervene early with appropriate, evidence-based treatment. But we consistently fail to do so, and the human toll is evident.

  • One third of the people living homeless in California are diagnosed with untreated mental illness.
  • One third of the inmates in California prisons are living with mental illness.
  • Each year in the U.S., more than 44,000 people die by suicide, largely because of untreated mental illness.
  • A recent one-year study found the death rate for young people diagnosed with psychosis was 24 times higher than their peers in the general population.

— Compiled by the Steinberg Institute

For more information: Contact Executive Director Maggie Merritt, (916) 553-4167/ 



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