Impact of comorbid mental and physical illness on employment, disability and costs

Comorbid physical and mental illness greatly increases the direct costs of illness compared to having one condition alone. However, little is known about how the indirect costs of illness such as job loss, earnings loss and disability are affected by comorbidities. There is limited empirical evidence on the association between comorbidities and the indirect costs of illness since most standard models in the literature analyze the independent effects of mental and physical illness without taking into account the interaction between them. The proposed research will investigate to what extent having a physical comorbidity increases the impact of mental disorders on indirect costs of illness such as employment status, earnings loss and disability, in addition to the impact on direct health care expenditures. Understanding the joint impact of comorbidities between mental and physical disorders on direct and indirect costs is crucial from a policy standpoint since it aligns with a number of initiatives currently under way to integrate mental and primary health care under the Affordable Care Act. Specifically, we will analyze the marginal impact of having a physical comorbidity for individuals with mental disorders using the Medical Expenditure Panel Survey (MEPS) covering years 1996 to 2011. We propose to use the panel structure of the MEPS to improve the identification of causal relationships using repeated individual observations. The analysis will be performed using linear mixed models and generalized linear models.