The Long-Term Impact of Employment on Mental Health Service Use and Costs for Persons With Severe Mental Illness

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Stable employment promotes recovery for persons with severe mental illness by enhancing income and quality of life, but its impact on mental health costs has been unclear. This study examined service cost over ten years among participants in a co-occurring disorders study. Latent-class growth analysis of competitive employment identified trajectory groups. The authors calculated annual costs of outpatient services and institutional stays for 187 participants and examined group differences in ten-year utilization and cost. A steady-work group (N=51) included individuals whose work hours increased rapidly and then stabilized to average 5,060 hours per person over ten years. A late-work group (N=57) and a no-work group (N=79) did not differ significantly in utilization or cost outcomes, so they were combined into a minimum-work group (N=136). More education, a bipolar disorder diagnosis (versus schizophrenia or schizoaffective disorder), work in the past year, and lower scores on the expanded Brief Psychiatric Rating Scale predicted membership in the steady-work group. These variables were controlled for in the outcomes analysis. Use of outpatient services for the steady-work group declined at a significantly greater rate than it did for the minimum-work group, while institutional (hospital, jail, or prison) stays declined for both groups without a significant difference. The average cost per participant for outpatient services and institutional stays for the minimum-work group exceeded that of the steady-work group by $166,350 over ten years. Highly significant reductions in service use were associated with steady employment. Given supported employment's well-established contributions to recovery, evidence of long-term reductions in the cost of mental health services should lead policy makers and insurers to promote wider implementation.