Amanda Brummitt12/3/25 1:35 PM6 min read

Why Employers Should Invest in Mental Healthcare

Mental health is now a core driver of workforce performance, not a peripheral perk. When employees can access timely, high-quality care, employers see fewer absences, stronger retention, and better engagement.

In this episode of the Generous Benefits Podcast, Amanda Brummitt talks with William “Billy” Schroeder of Just Mind Counseling about why workplace mental health is now a business and humanity imperative. They discuss the real costs of ignoring mental health, how quality care reduces ER visits and turnover, and what effective employer support looks like, from fast access and experienced clinicians to coordinated care and scalable programs for companies of all sizes.

Listen to the episode:
Investing in Minds: How Mental Health Drives Retention and ROI

Treating mental health as essential care pays off. Unaddressed issues show up as avoidable medical spend, emergency department use, and departures that drain institutional knowledge. Employers that remove friction and make it easy to use benefits see measurable returns in retention, productivity, and morale. The first step is making the pathway to care quick, confidential, and easy to navigate.

Quality mental healthcare starts with fast access, right-fit matching, and evidence-based approaches that lead to clear next steps. Employees use benefits when they trust the process, understand what to expect, and can get help without long waits. That trust grows when leaders talk about mental health as part of total health and make it normal to ask for support.

You do not need a high-dollar program to make real progress. Begin with what people will actually use. Modern EAPs that are easy to find and simple to book can be a good start. Primary care with mental health screening and warm handoffs reduces drop-off. Teletherapy expands access for remote and after-hours needs. Just as important, managers need simple playbooks so they can spot issues early, hold supportive conversations, and connect people to resources.

Practical takeaways include investing in high-quality mental health programs or direct contracts, offering timely access to evidence-based care, and creating supportive workplace practices that improve retention, engagement, and overall wellbeing.

For a practical blueprint you can use right away, listen to the full conversation with Billy Schroeder. We dig into access, quality, cost-effective design, and the everyday habits that make mental health support work for real teams.

🎧 Episode link: Investing in Minds: How Mental Health Drives Retention and ROI

Resources Billy Mentioned

Spring Health Study (JAMA Network Open, February 2025)

1.9x Return on Investment (ROI): For every dollar invested in mental health benefits, employers saw a return of $1.90 in reduced healthcare costs.
$1,070 Net Savings per Participant: This was the average net savings per employee in the first year after implementing enhanced mental health benefits.
30% Gross Cost Reduction: Overall healthcare costs decreased by 30% due to improved mental health support.
14% Net Cost Reduction: Even after accounting for the cost of the mental health program, there was a net reduction of 14% in total healthcare expenses.

PubMed Study (2021)

$1,146 Savings per Adult with Chronic Conditions: Adults with chronic physical conditions who received mental health services experienced a $1,146 reduction in healthcare expenditure compared to those who did not (in 2014 dollars).
$2,690 Savings with Psychotherapy & Medication: Combining psychotherapy and medication for mental health resulted in even greater savings, averaging $2,690 per person (in 2014 dollars).

Milliman Report (American Psychiatric Association)

$26-$48 Billion Annual Savings Potential: Effective integration of medical and behavioral healthcare could lead to annual savings in general healthcare costs within this range nationwide.

"Addiction and Mental Health vs. Physical Health: Widening Disparities in Network Use and Provider Reimbursement" (Milliman, 2019)

This study focuses on reimbursement and network adequacy disparities but also highlights how fragmented care and limited network coverage for mental health/substance use services lead to increased out-of-network utilization and higher overall costs (including emergency department visits).
Patients often end up in higher-cost settings (e.g., the ER) when they cannot get timely outpatient mental health care.

Kaiser Family Foundation (KFF) (Washington DSHS cites KFF)

20% Decline in Medical Costs: Managed mental health treatment was linked to a 20% reduction in overall medical costs for individuals receiving it.
Medical Cost Offsets: KFF highlights that mental health treatment, especially for those with chronic conditions and depression, can lead to significant medical cost offsets.

American Psychiatric Association (APA)

The Collaborative Care Model & Cost Savings

The APA’s reports on the Collaborative Care Model (integrating mental health specialists into primary care) show that for every dollar spent on evidence-based behavioral interventions, overall medical costs can be reduced by as much as $2–$4.
One APA study highlighted that integrating mental health into primary care can significantly reduce ER visits, inpatient stays, and total medical spending for patients with mental health diagnoses.

Journal of the American Medical Association (JAMA) Psychiatry

Research suggests that effective depression care management can reduce total healthcare costs by up to 20–30% for high-utilizing patients, largely through reductions in hospitalizations and ED visits.

American Journal of Managed Care

Studies have demonstrated that integrated behavioral health programs produce ROI in the range of 2:1 to 4:1 when factoring in reduced ER admissions and inpatient costs.

National Institute of Mental Health (NIMH)

Mental illness can aggravate the severity of physical ailments such as heart disease and diabetes, driving up costs. Successful mental health interventions (therapy, medication management) can lessen that burden, indirectly reducing medical expenditures and hospital visits.

Evernorth (Cigna)

Evernorth research shows that behavioral health treatment can reduce healthcare costs by up to $3,321 per person over 27 months. These savings are due to fewer emergency department visits and inpatient hospital stays.

Sources

Evernorth Research demonstrates behavioral health care reduces medical costs - https://www.evernorth.com/articles/behavioral-health-care-reduces-medical-costs
PR Newswire - Spring Health Study Published in JAMA Network Open Demonstrates 1.9x ROI of Employer-Sponsored Behavioral Health Benefits: https://www.prnewswire.com/news-releases/spring-health-study-published-in-jama-network-open-demonstrates-1-9x-roi-of-employer-sponsored-behavioral-health-benefits-302369624.html#:~:text=1.9x%20ROI%3A%20For%20every,earlier%20in%20the%20care%20continuum
PMC - Employer-Sponsored Digital Mental Health Program and Health Care Cost Savings: A Matched Group Cohort Study: https://pmc.ncbi.nlm.nih.gov/articles/PMC11800021/
PubMed - Association of Mental Health Service Use With Healthcare Expenditure Among Adults With Chronic Physical Conditions: https://pubmed.ncbi.nlm.nih.gov/33940945/
American Psychiatric Association - Economic Impact of Integrated Medical-Behavioral Healthcare: https://www.coloradocoalition.org/sites/default/files/2017-01/milliaman-apa-economicimpactofintegratedmedicalbehavioralhealthcare2014.pdf
Melek, S., Norris, D., Paulus, J. (2019). "Addiction and mental health vs. physical health: Widening disparities in network use and provider reimbursement." Milliman 2019 Report (PDF): https://www.milliman.com/en/insight/addiction-and-mental-health-vs-physical-health-widening-disparities-in-network-use-and-p
Kaiser Family Foundation - The Business Case for Behavioral Health: https://www.dshs.wa.gov/sites/default/files/rda/reports/research-3-28.pdf
American Psychiatric Association (APA), "The Collaborative Care Model: An Approach for Integrating Physical and Mental Health Care in Medicaid Health Homes": https://www.psychiatry.org/psychiatrists/practice/professional-interests/integrated-care/get-paid/medicaid-payment-and-collaborative-care-model
Katon, W., et al. "Cost-effectiveness of a multicondition collaborative care intervention: a randomized controlled trial." Archives of General Psychiatry 69.5 (2012): 506-514: https://pubmed.ncbi.nlm.nih.gov/22566583/
"Return on Investment for Behavioral Health Integration in Primary Care" (AJMC, 2018): https://pmc.ncbi.nlm.nih.gov/articles/PMC11800021/

Amanda Brummitt

Amanda Brummitt is a healthcare strategist and host of both the Generous Benefits Podcast and Generous Impact Podcast. With more than 20 years of experience, she has guided healthcare organizations through targeted growth, operational improvements, and strategies that create better experiences for patients and providers alike. Amanda’s leadership style is both visionary and practical. A natural connector, she brings people together for candid conversations that uncover what works—and then translates those insights into clear, actionable steps that teams can execute. Outside of work, Amanda is happiest outdoors—paddle boarding, hiking, and gardening. She is also deeply committed to community service, volunteering with organizations such as Water is Basic, Austin Chamber of Commerce, Irving Chamber of Commerce, ACHE of North Texas and serving as a yoga instructor for Greater Austin YMCA.