Bend the Trend: Lower Healthcare Costs by Supporting Mental Health

Stress takes a toll on both employees and employers, fueling turnover, disengagement, absenteeism, and higher healthcare spend. In fact, 5–7% of U.S. healthcare spending is tied to mental health and behavioral health services. But even small actions, like normalizing conversations or piloting a single support resource, can deliver measurable impact.

The Alliance recently held a webinar with Rich Derks, co-owner and business director at QUEST Counseling and Consultation Center, one of the largest behavioral health practices in The Alliance network.

The session discussed how to review workplace data to spot stress points, engage employees in mental health initiatives, and design strategies that build healthier, more resilient teams.

Watch the full webinar to get the complete framework for evaluating your mental health benefits strategy.

Healthier minds mean healthier bottom lines. Keep reading to discover how supporting mental health can bend your healthcare cost curve.

Mental Health and Healthcare Costs Are More Connected Than Many Employers Realize

Mental health challenges such as anxiety, depression, chronic stress, and burnout can significantly affect both direct and indirect healthcare costs.

When behavioral health needs go unaddressed, employees are more likely to experience:

• Higher rates of chronic disease
• Increased emergency room utilization
• Poor medication adherence
• More workplace injuries
• Greater absenteeism and presenteeism (which costs employers about $575 billion annually)
• Increased disability claims

Mental health conditions can also intensify physical health issues. For example, employees managing diabetes, heart disease, or musculoskeletal pain may struggle more when stress, depression, or anxiety are present.

This creates a compounding effect: untreated mental health concerns often lead to higher total healthcare spending across multiple categories.

In many cases, employers are already paying for mental health challenges; they’re just paying them through higher claims, lost productivity, and avoidable downstream costs.

The Cost of Burnout in the Workplace

“When the pandemic hit in 2020, our caseload increased at QUEST Counseling. I helped with intake for a bit and realized the number one reason people were seeking therapy was because of workplace stress and burnout,” said Rich Derks.

Burnout is not just an employee satisfaction issue. It can become a business cost issue.

Employees experiencing burnout are more likely to:

• Use more healthcare services
• Miss work
• Deliver lower productivity
• Experience disengagement
• Seek employment elsewhere

Replacing employees is expensive, and workforce instability can increase hiring, onboarding, and training costs. It is often less expensive to prevent burnout in the first place.

Rich said, “Employers can’t control stressors in employees’ lives outside of work, but they can change how they support employees at work. About 60% of employees say mental health issues are driven or exacerbated by the workplace. So, employers can make sure they aren’t adding more stress.”

Prevention Often Costs Less Than Crisis

Many employers approach healthcare costs reactively, focusing on claims after they happen.

Mental health support offers an opportunity to shift from reactive to proactive healthcare management. This is where preventive care principles apply.

Providing employees with accessible mental health resources can help address concerns earlier, before they escalate into:

• Crisis care
• Emergency room visits
• Inpatient treatment
• Long-term disability
• Serious physical health complications

Practical Ways Employers Can Support Mental Health While Managing Costs

Supporting employee mental health does not require a massive overhaul or increased spending. Often, it means designing benefits and workplace cultures that reduce barriers to accessing mental healthcare.

Improve Access to Behavioral Health Services Access matters. Even with health benefits, employees may avoid seeking care if they cannot get an appointment, or it feels confusing, expensive, or stigmatized. Employers can: Expand Employee Assistance Programs (EAPs) Improve behavioral health network access Offer virtual mental health options Promote primary care integration Reduce financial barriers when possible

Strengthen Benefit Navigation Many employees simply do not know where to start when it comes to accessing mental health services. Employers should provide clear guidance, navigation tools, and education around: Therapy options Crisis resources Virtual/telehealth services Medication support This can help improve employee utilization and reduce delays in care.

Train Leaders to Recognize Burnout Managers often shape day-to-day employee experience. So, training leaders to identify warning signs, encourage healthy workloads, and create psychologically safer workplaces can improve early intervention.

Normalize Mental Health Conversations Stigma around mental health remains a barrier to accessing care. When employees fear judgment, they may delay care until issues become more severe. Rich Derks said, “Unfortunately, of the people navigating behavioral health issues, only 25% seek help. While this is getting better with younger generations, there is still a stigma around mental health.” Employers can reduce stigma by: Encouraging open conversations Sharing available resources regularly Positioning mental health as part of total health and wellbeing Highlighting confidentiality protections Workplace culture can influence utilization just as much as effective health benefits.

Address Workplace Stressors Mental health support is not only about being able to access treatment; it’s also about prevention. Rich advises, “ask employees what their stressors are. You may think you know, but asking can give you the full picture. Employers can also ask about EAP use and effectiveness or other wellness programs.” Organizations should evaluate: Workload expectations Scheduling flexibility Manager communication Job clarity Psychological safety Sometimes lowering healthcare costs starts by reducing workplace conditions that contribute to stress.

Behavioral Health Support Can Strengthen Recruitment and Retention

Today’s workforce increasingly values employers who prioritize wellbeing.

Mental health support can help employers:

• Attract talent
• Improve retention (the cost of replacing an employee can cost 50–200% of salary)
• Strengthen employee trust
• Increase engagement
• Support productivity

In a competitive labor market, accessible and affordable resources may also improve employees’ perception of the value of benefits.

Better Mental Health Can Lead to Better Healthcare Consumerism

Employees under chronic stress are often less likely to make informed healthcare decisions.

Stress can reduce:

• Preventive care utilization (while increasing urgent and emergent care use)
• Benefit plan understanding
• Cost comparison behavior (shopping for care)
• Medication adherence

When mental well-being improves, employees may be better positioned to engage as smarter healthcare consumers, making more proactive, high-value decisions.

The Bigger Opportunity: A Smarter Cost Strategy

Lowering healthcare costs is not only about paying less for care. It is also about creating healthier employees who need less high-cost intervention over time.

Mental health support is not separate from healthcare strategy; it’s a core part of it.

When employers invest in accessibility, early intervention, and supportive workplace systems, they can reduce costs while improving employee well-being, retention, and organizational performance.

In today’s workforce environment, supporting employees’ health is not just the right thing to do; it may also be one of the smartest healthcare investments an employer can make.

Want to see how The Alliance helps employers build better benefits and lower healthcare costs? Talk to our team to explore what’s possible for your organization.