CPR Working Paper Series No. 22

Determinants of Medical Costs Following A Diagnosis of Depression

Regina H. Powers, Thomas J. Kniesner, and Thomas W. Croghan

March 2001
 (Revised from April 2000)

Objective:    Assess the determinants of medical costs for depressed individuals.

Method:    Using medical insurance claims for a population of depressed individuals with employer provided insurance, we estimated multivariate models of the costs for general medical care, exclusive of costs for mental health services, following diagnosis. Explanatory variables included provider choice (psychiatrist or non-physician mental health specialist), treatment choice (medication, psychotherapy, or combination treatment); treatment adequacy as defined by APA guidelines; characteristics of depression symptoms and severity; and other demographic characteristics.

Results:  On average, there were increases in the costs for general medical services in the year following diagnosis of a depressive disorder.  The increases in general medical costs were slightly higher when depressed persons received a treatment for depression when compared to those who did not receive a treatment for depression. Among those treated, there was no significant difference between those who received an adequate course of treatment when compared with those who did not.  Significant predictors of high medical costs following diagnosis included choice of a non-psychiatrist as the initial provider, high pre-period medical costs, and several measures of severity.

Conclusions:    Our findings suggest that a diagnosis of depression is associated with increases in costs for general medical care.  These increases are more modest when care is initially provided by a psychiatrist.

A revised version of this paper appears in T·E·N The Economics of Neuroscience, 3 ( 8 ) August (2001): 39-45

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