Economic impacts of supported employment for persons with severe mental illness

Most persons with severe mental illness prefer competitive to sheltered vocational settings. Supported employment (SE) has become a clearly defined model for helping people with severe mental illness to find and maintain competitive jobs. It involves individualized and rapid placement, ongoing support and assessment, and integration of vocational and mental health staff within a single clinical team. Previous studies show that SE secures competitive employment much more effectively than do other approaches. This review focuses on its economic impacts.

Studies reporting some service use or monetary outcomes of adding SE programs were identified. These outcomes were tabulated and are discussed in narrative form.

Five nonrandomized and 3 randomized studies compare SE programs with day treatment or transitional employment programs. The introduction of SE services can result in anything from an increase to a decrease in vocational service costs, depending on the extent to which they substitute for previous vocational or day treatment services. Overall service costs tend to be lower, but differences are not significant. Earnings increase only slightly on average.

Converting day treatment or other less effective vocational programs into SE programs can be cost-saving or cost-neutral from the hospital, community centre, and government points of view. Investments of new money into SE programs are unlikely to be materially offset by reductions in other health care costs, by reductions in government benefit payments, or by increased tax revenues. Such investments must be motivated by the value of increasing the community integration of persons with severe mental illness.