EPIDEMIOLOGY Dis Manage Health Outcomes 1998 Sep; 4 (3): 135-142

1173-8790/98/0009-0135/$04.00/0

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Depression in the Workplace

Epidemiology, Economics and Effects of Treatment
James M. Russell, James Patterson and Andrew M. Baker
1 Department of Psychiatry and Behavioral Sciences, The University of Texas Medical Branch
at Galveston, Galveston, Texas, USA
2 Pfizer Inc., New York, New York, USA

Contents
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
1. Scope of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
2. Economic Costs of Depression . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
2.1 Direct Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
2.2 Indirect Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
3. Economic Implications of Illness in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
3.1 Depression in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
3.2 Depression Compared with Other Chronic Medical Illnesses . . . . . . . . . . . . . . . . . . . 138
4. Depression and Work Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
4.1 Absenteeism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
4.2 Productive Capacity at Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
5. General Medical Utilisation in Depression . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
6. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Abstract Depression is a common, serious illness that affects millions of individuals,

most often in their prime years of productivity. There is strong evidence that
depression is as debilitating as most other general medical conditions and results
in increased general medical resource utilisation.
The economic costs of depression are extremely high. The total cost of depres-
sion in the US in 1990 was estimated to be $US53 billion. Of this amount, $US33
billion was estimated to be directly related to the loss of productivity in the
workplace.
Well-controlled clinical studies have demonstrated that depression can be ef-
fectively treated with antidepressant medications. In addition to symptom reduc-
tion, these same studies have demonstrated that productivity at work also
improves. The economic benefits from this increased productivity far outweigh
the cost of appropriately diagnosing and treating depression.
136
1. Scope of the Problem
Depression is a serious disease that is com-
mon,[1] debilitating[2] and highly treatable. It is one
of the most common reasons for visits to primary
care physicians[3,4] and is more pervasive than most
chronic medical conditions. In 1987, it was esti-
mated that 22.4 million Americans experienced at
least one episode of depression.[5] Chronic illnesses
such as coronary artery disease and diabetes are
less common than depression, affecting 9.4 and 8.8
million of the US population, respectively, in
1987.[6]
The National Comorbidity Study (NCS), based
on DSM-IV diagnostic criteria, estimated the life-
time prevalence rate for major depression to be
17.1%, meaning that approximately 1 in 6 individ-
uals in the US will have a major depressive episode
some time in their life. Kessler et al.[5] estimates
that 10.3% of the population is either currently ex-
periencing or has experienced a major depressive
episode in the past 12 months. Those in their prime
years of productivity, from 18 to 44 years of age,
were most likely to be affected. Berndt et al.[7] re-
ported that the vast majority of chronically de-
pressed patients first experienced depressive states
before the age of 15 years. This early onset might
impair their ability to accumulate human capital
and avoid secondary health and social problems
when they should be most productive.
Bromet et al.[8] conducted research on depres-
sion and alcohol abuse/dependence in a sample of
1876 managers and other professionals at Westing-
house Corporation in the US. In this sample of
highly paid and very productive individuals, the
rate of depression was twice that of the general pop-
ulation. Lifetime and 1-year prevalence rates of
major depression (DSM-III-R criteria) were 23 and
9% respectively for men, and 36 and 17% respec-
tively for women. The average age of onset was
29.9 years in men and 25.4 years for women. The
percentage of persons with onset of major depres-
sion before the age of 25 years was 35% for men
and 54% for women. The average length of the
worst episode was 12.3 weeks for men and 9.3
weeks for women. Only 11.4% of these patients
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Russell et al.
with major depression were prescribed antidepres-
sant medication.[8] The extremely low rate of treat-
ment of persons with major depression in this study
is alarming since it is a highly treatable disease.
Not only is depression prevalent in the work-
place, but it is extremely costly to both employees
and employers. Depression affects patients’ pro-
ductivity, physical health and social interactions
both at work and at home. More than 50% of re-
sponders in a study by Bromet et al.[8] reported dif-
ficulty in concentrating which may severely ham-
per work productivity. It is estimated that employers
bear greater than one-half of all costs related to
depression in terms of increased absenteeism by
depressed employees and concomitant decreased
productivity while at work.[9]
2. Economic Costs of Depression
The direct and indirect costs of depression have
been estimated in an economic model (table I). [10]
In addition to the direct and indirect costs sum-
marised in table I, there are also the intangible costs
of pain, suffering, stress and reduced quality of life
of patients, partners, dependents and caregivers.
Employed family members might also have in-
creased absenteeism and lower productivity be-
cause of the depressed patient’s illness.[12]
2.1 Direct Costs
Direct costs are those incurred in the diagnosis
and treatment of depression. They include inpa-
tient/partial care (estimated at $US8.4 billion, 1990
dollars), outpatient care ($US2.8 billion) and phar-
maceutical costs ($US1.2 billion; 2.2% of the total
cost estimates). The overall direct cost of $US12.4
billion accounts for only 23% of the $US53 billion
estimated total cost of depression in the US in
1990.[12] In the UK, the direct costs of depression
are similar.[13]
2.2 Indirect Costs
Indirect costs are those associated with the man-
ner in which symptoms of the disease affect an in-
dividual’s ability to function and produce at their
Dis Manage Health Outcomes 1998 Sep; 4 (3)
Depression in the Workplace
expected capacity, use of medical resources unnec-
essarily, and lost productivity due to premature
death by suicide. In the US in 1990, indirect costs
accounted for 77% of the total $US53 billion at-
tributed to depression.[11] If a patient’s depressive
illness is untreated, or diagnosed but inadequately
treated, indirect costs will rise. Since depression
directly affects an employee’s productivity, the
employer is largely responsible for the costs of re-
duced productivity. The economic implications of
depression in an employee can be calculated by
determining the net economic benefit of the diag-
nosis and treatment of depression in the model that
follows.
Net economic benefit of diagnosis & treatment =
∆ [work productivity × income] − treatment costs
Work productivity = performance at work × hours
worked[10]
The part of the equation that includes the em-
ployee’s performance at work may vary in it’s con-
tribution to productivity depending on the cogni-
tive skills required of the employee.[14] It is often
hypothesised that the higher the cognitive require-
ments of the job, the more depression will affect
work performance. The indirect costs of depres-
sion in the workplace are enormous. Increased ab-
senteeism and decreased productive capacity while
at work are the major contributors to these indirect
costs.[11]
The National Comorbidity Survey data indicate
that there are a substantial number of workers be-
tween 18 and 44 years of age who experience de-
pression, and these are the most productive years
in a worker’s lifetime. In a given year, it is esti-
mated that 9% of the US employed work force,
consisting of 10.3 million workers, experience a
depressive episode.[9] Considering the age group
most affected and the number of people included,
this represents a large economic burden to both
employers and to the economy in general.
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137
Table I. Economic costs of depression in 1990 in the US (after
Greenberg et al.,[9,11] with permission)
$US (billions)
Direct costs
Inpatient/partial care 8.34
Outpatient care 2.79
Pharmaceutical costs 1.17
Partial hospitalisation 0.09
Total 12.4 (23% of grand total)
Indirect costs
Absenteeism 24.50
Lost productivity 8.50
Mortality 7.50
Total 40.5 (77% of grand total)
Grand total 52.9
3. Economic Implications of
Illness in the Workplace
3.1 Depression in the Workplace
Greenberg et al.[9] estimated that workplace
costs associated with absenteeism and reduced
productive capacity while at work are approxi-
mately $US33 billion per year in the US (in 1990
dollars). In response to this large economic impact,
several large employers have assessed depression
in the workplace and reported data supporting the
fact that depression is widespread and should be of
great concern to employers. In 1989, the New York
Business Group on Health, Inc. engaged the Gallup
organisation to conduct a nationwide survey of
companies to assess healthcare utilisation. Ran-
dom samples of medical directors, personnel direc-
tors and Employee Assistance Program (EAP) di-
rectors provided information. Company size
ranged from under 500 to more than 30 000 em-
ployees. 72% of respondents reported mental
health problems to be fairly (16% of respondents)
to very (56%) pervasive in the workplace. Respon-
dents reported major complaints by depressed
workers, the most common complaint being diffi-
culty in concentrating (36%). In addition, 35% re-
ported sleep disturbances, 27% loss of energy, 18%
loss of interest in work and 13% complained of
absenteeism in their employees. 87% of the re-
Dis Manage Health Outcomes 1998 Sep; 4 (3)
138
spondents agreed that stress, anxiety or depression
impaired employees’ ability to function in their
job.[15] Warshaw[15] also reported that reduced pro-
ductivity, morale problems, absenteeism and poor
work quality were reported in the top 5 most seri-
ous consequences of employee stress, anxiety, or
depression.
In 1988 the Depression Awareness, Recognition
and Treatment National Worksite Program (DART)
was established. This was a cooperative initiative
of the National Institutes of Mental Health and the
Washington Business Group on Health. Partici-
pants were comprised of leaders in the fields of
human resource management, health benefits, em-
ployee assistance services evaluation and medical
and health promotion programmes. The cost of oc-
cupational disability related to mental health prob-
lems was estimated to be $US8000 per case.[16]
Since the effectiveness of antidepressant treatment
is very high and the disease is often unrecognised
and/or under-treated, the productive capacity of a
company could be increased substantially if greater
efforts were directed toward the detection and ap-
propriate treatment of depression.
The results from the DART programme and
other worksite studies are summarised below.
• 1-Year prevalence rates at Westinghouse Corpo-
ration for major depression were 17% for
women and 9% for men.[8]
• Depression accounted for 11% of all days lost
from work during 1 year and half the total time
lost because of mental health problems at Pa-
cific Bell.[17]
• An employee survey at Wells Fargo Bank
revealed that 30 to 35% of respondents were
experiencing depressive symptoms. The preva-
lence of clinical depression could be as high as
12 to 15%.[17]
• A 4-year study of the effectiveness of an em-
ployee assistance programme at McDonnell
Douglas Corporation yielded a 4 to 1 return on
investment after considering the costs of medi-
cal claims, absenteeism and turnover.[18]
• After initiating a comprehensive mental health
programme including prevention and early in-
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Russell et al.
tervention programmes and the redesign of
mental health benefits, the First National Bank
of Chicago realised a 32% reduction in inpatient
psychiatric charges.[19]
The results from the DART programme indicate
that depression is a significant problem in the
workplace which results in billions of dollars of
lost productivity. Implementation of appropriate
intervention and treatment programmes can reduce
these costs significantly.
3.2 Depression Compared with Other
Chronic Medical Illnesses
The economic burden of major depression in the
US was estimated at almost $US53 billion in 1990.
This is similar to other major illnesses such as cor-
onary heart disease, cancer and AIDS in terms of
cost to society.[9,12,20] Depressed patients are as de-
bilitated as those with other chronic medical con-
ditions. Depression results in more days lost from
work, approximately 440 million days (1.2 million
work-years), than both hypertension and heart dis-
ease combined. However, treating depression re-
sults in more work-days saved than treating hyper-
tension or heart disease.[6,20,21] Patients experiencing
depression had greater role and physical limitations
and more bodily pain than those with diabetes, gas-
trointestinal conditions, back conditions, or hyper-
tension. In addition to the high levels of pain and
physical, social and role limitations seen in depressed
patients, they also spent more days in bed than pa-
tients with hypertension, diabetes, angina, arthritis,
gastrointestinal problems, lung problems, or back
problems.[2,22]
The direct costs of cancer and coronary heart
disease are substantial because of the intensive hos-
pital care needed. However, it must be considered
that these illnesses most often affect patients who
are either retired or near the end of their working
lives. Hence, the effect on workplace costs is un-
likely to be high. In contrast, depression primarily
affects people between the ages of 18 to 44 years,
thus contributing significantly to workplace costs.
The costs are often hidden since they occur grad-
ually and are less noticed; thus, they are not nearly
Dis Manage Health Outcomes 1998 Sep; 4 (3)
Depression in the Workplace 139

Table II. Functioning in medically ill and depressed patients (after Wells et al.,[2] with permission)
Condition Physicala Role a Free of paina Bed daysb
Depression 77.6 73.7 64.5 1.40
Hypertension 86.4 90.0 77.5 0.36
Diabetes 81.5 80.7 76.3 1.02
Coronary artery disease 65.8 60.4 70.8 2.08
Angina only 71.2 72.4 70.0 0.30
Arthritis 80.6 83.6 60.4 0.53
Gastrointestinal problems 82.8 79.9 65.1 0.93
Lung problems 75.5 78.8 73.0 1.14
Back problems 79.0 82.6 66.8 0.76
No chronic condition 88.1 90.6 76.2 0.41
a Measures are scored on a scale of 1 to 100, with 100 representing perfect health in the various categories.
b The number of days in bed in the last 30 days.

as dramatic as costs associated with cancer and cor-
onary heart disease treatment. The diminished
work productivity and increased absenteeism as a
result of depression could go unnoticed but ulti-
mately cost more than work productivity costs as-
sociated with cancer or coronary heart disease in
the long term.[14]
4. Depression and Work Productivity
Lost productivity has 2 components, absentee-
ism and decreased performance while at work. The
depressed employee will not be able to work or will
not be able to work to full capacity, hence the eco-
nomic effect on the employer is negative. Several
studies have assessed the effect of depression on
work productivity utilising clinical samples.
4.1 Absenteeism
The most recent estimate of lost productivity
due to absenteeism in the US is $US24.5 billion
(1990 dollars).[9] In a study of chronically de-
pressed individuals, absenteeism decreased by
82% from an average of 12 to 2 hours/week in
treated patients.[10] Greenberg et al.[9] assumed that
the time absent from work per depressive episode
was 33 days during a 12-week episode for treated
persons versus 60 days during an 18-week episode
for untreated persons.
4.2 Productive Capacity at Work
The average duration of a disability period be-
cause of a depressive disorder was approximately
40 days in a large US corporation from 1989 to
1992,[22] which is consistent with the assumption
of Greenberg et al.[9] This exceeded the average
disability duration for low back pain (37 days),
heart disease (37 days), mental health disorders
other than depression (32 days), hypertension (27
days) and diabetes (26 days).[22]
In a recent study by Finkelstein et al.,[23] the
relationship between depression and workplace
performance was analysed further by evaluating
the productive capacity of patients while at work
based on questions answered by both the clinician
and the patient. In this preliminary analysis of 266
patients, depression status and workplace perfor-
mance were measured at baseline and after 12
weeks of treatment. The Hamilton Depression
Scale (HAM-D)[24] was used at baseline to screen
study participants for clinical depression. Subjec-
tive workplace performance was determined using
indices from clinician and patient reported re-
sponses to questions about work function. The
questions were from 6 widely used behavioral in-
struments, each having a question that produced a
response concerning productive capacity while at
work.[23]
HAM-D scores after 12 weeks of treatment in-
dicated that depressive symptoms had decreased
by 53% and the subjective productive capacity

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140
while at work index had increased by 26%. There-
fore, the previous estimates of Greenberg et al.[9]
of a 20% decrease in productive capacity while at
work costing $US8.5 billion in depressed employ-
ees appears to be reasonable and could be an un-
derestimate.
In a subsequent analysis of this study by Russell
et al.,[10] all patients that responded to the treatment
phase continued treatment and completed a 16-
week follow-up phase were evaluated with 3 clini-
cian rated questions: HAM-D question 7, Cornell
Dysthymia Rating Scale question 16, and the LIFE
(Longitudinal Internal Follow Up Evaluation)
work activities question. An expert panel quanti-
fied the implied productivity from each of these
questions and each question was weighted based
on this assessment. Indices based on these
weighted scores were then calculated and the
changes in indices over the treatment period were
used to measure productive capacity while at work.
The productive capacity index improved by
30% in the first 12-week treatment period, and this
level of improved productive capacity while at
work was sustained during an additional 16 weeks
of treatment. This degree of improvement is in ac-
cordance with the 20% decrease in productive ca-
pacity while at work in untreated depressed pa-
tients assumed by Greenberg et al.[9]
5. General Medical Utilisation
in Depression
It has become apparent that depression is not
only strongly related to perceived and actual phys-
ical illness but also to an increase in medical ser-
vice utilisation. Frerichs et al.[25] reported data
from a 1979 survey in which depressed persons
reported more physical illness than nondepressed
persons. Patients with 2 or more pain complaints
were 6 times more likely to be depressed and those
with 3 or more pain complaints were 8 times more
likely to be depressed.[26]
Patients with depressive illness often focus on
somatic rather than depressive symptoms because
of the stigma attached to mental illness in Western
society. Consequently, the physician, unless ade-
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Russell et al.
Table III. Patient reported vs actual abnormalities found on physical
examination (after Russell et al.,[10] with permission)
Medical history Physical
(%) examination (%)
Cardiovascular 18.58 4.56
Respiratory 23 1.26
Gastrointestinal 38.74 9.76
Neurological 27.4 3.15
Dermatological 19.21 22.55
Endocrinological 10.2 2
quately trained to recognise somatic symptoms as
possible signs of depression, will most likely pur-
sue treatment of these somatic symptoms. Expen-
sive diagnostic tests (x-rays, computed tomogra-
phy scans, magnetic resonance imaging, laboratory
tests etc.) and referrals to specialists other than
mental health professionals often escalates costs,
but does not result in the treatment of depressive
illness. As a result, there will be further follow-up
visits which will increase both direct and indirect
costs because of continued ill health and conse-
quent absenteeism and decreased productivity in
the workplace. Table III illustrates the results of
patient reported complaints versus abnormalities
found on physical examination and the large differ-
ences between them.
Many studies have shown that patients diag-
nosed with psychiatric disorders, particularly de-
pression, are high users of nonpsychiatric medical
services.[27,28] Increases in family doctor visits,
hospitalisations and functional pain complaints
were demonstrated by Widmer et al.[29] 40% of pa-
tients with a diagnosis of major depression were
found to be high users of healthcare services by
Katon et al.[30] More recently, Katzelnick et al.[31]
found evidence of major depression in 29% of high
users of medical services compared with 17%
among low users.
A recent study indicated that in a large prepaid
health maintenance organisation (HMO), the top
15% of high-use patients accounted for 64% of to-
tal healthcare costs while the patients in the lowest
50% were responsible for only 9.5% of total
costs.[32] MacFarland et al.[4] found that the top
Dis Manage Health Outcomes 1998 Sep; 4 (3)
Depression in the Workplace
13% of highest users in a prepaid HMO repre-
sented 31% of physician visits, 35% of hospital
admissions and 30% of outpatient surgical ser-
vices. Additionally, psychological distress corre-
lated positively with high utilisation patterns.
Katon et al.[30,33] observed that depressed pa-
tients had significantly more ambulatory visits,
phone calls and medical evaluations than non-
depressed patients. Of patients who were in the top
10% of ambulatory services users, 35% met the
criteria for recurrent major depression. In general,
patients with depressive illnesses incur healthcare
utilisation costs that are 1.5- to 2-times greater than
those not diagnosed with depression.
Although depression is highly responsive to
treatment with antidepressant medication,[34] it is
often untreated or inadequately treated. Fre-
quently, the dosage of medication and/or the dura-
tion of treatment are inadequate.[35-37] This well
documented situation will often lead to overutilisa-
tion of medical resources.
6. Conclusion
Depression in the workplace is of serious con-
cern because it has high morbidity and substantial
negative effects on workplace economics due to
increased absenteeism, decreased productive ca-
pacity and increased utilisation of general medical
services. Compared with other major illnesses, it
is high on the scale of decreased physical and func-
tional well-being. Since depression can be effec-
tively treated, it is expected that active screening
(i.e., proactive employer initiated programmes to
diagnose depression not passive programmes that
require that the employee asking for help), diagno-
sis and treatment programmes will substantially
improve absenteeism and productive capacity at
work. Rizzo estimated that the net annual benefit
of appropriate treatment with antidepressant med-
ication would be $US1100 per worker with depres-
sion.[6]
Although it is not known exactly how much pro-
ductive capacity is lost due to depression, the cur-
rent cost of treating an individual with depression
in the US is approximately $US1000. Given an
 Adis International Limited. All rights reserved.
141
average income of $US20 000, a 5% increase in
productive capacity would be needed to offset the
cost of treatment. Most health economists agree
that Greenberg’s estimate of 20% improvement in
productive capacity is conservative and that in
most societies the economic benefits outweigh the
cost of treatment.[9]
In summary, depression can be relatively easily
diagnosed and very effectively treated. The costs
associated with depression are high for the patient,
their employer and society in general. Employers
who require high cognitive skills of their employ-
ees are often most affected. These are frequently
highly paid employees and the costs of reduced
work time and/or productive capacity to the em-
ployer can be substantial. The cost of depression
could be decreased markedly if employers were
educated about the disorder and efforts were di-
rected toward detection and appropriate treatment.
This should be considered an investment by em-
ployers which will have substantial returns. It can-
not be over emphasised that employers paying for
healthcare for their employees will experience sub-
stantial increases in productive capacity while at
work and a decrease in absenteeism.
Acknowledgements
Supported by an unrestricted educational grant from
Pfizer.
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About the Author: James N. Russell is an Associate Profes-
sor and Team Leader at Adult Clinical Services, at the Uni-
versity of Texas and Director of Quality Management
Outcomes Research in the Department of Psychiatry and
Behavioural Sciences, University of Texas. His interests in-
clude the pharmacoeconomics of CNS compounds in de-
pression, mania and psychotic disorders.
Correspondence and reprints: Dr James Russell, The Uni-
versity of Texas Medical Branch at Galveston, Dept. of Psy-
chiatry and Behavioral Sciences, Mary Moody 5.122, Rt.
0428, Galveston, TX 77554-0428, USA.
E-mail jrussell@utmb.edu
Dis Manage Health Outcomes 1998 Sep; 4 (3)