Loneliness: The hidden mental health crisis costing $2.7 billion per year

09 January 2023 Consultancy.com.au 4 min. read
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Considered a time for family festivities, the holiday season can add to the burden for those experiencing loneliness. A new KPMG report examines the economic cost of the hidden epidemic.

A report conducted by KPMG in collaboration with the Groundswell Foundation has found that more than a quarter of Australians experience frequent loneliness, including over a third of young adults.

Not simply just an emotional burden, the growing issue can have serious physical and mental health repurcussions, and is estimated to cost the Australian economy some $2.7 billion per year in direct healthcare support.

The prevalence and cost of loneliness in Australia

While making a distinction from ‘social isolation’ (the objective lack of interaction, which may or may not lead to negative feelings), the ‘Connections Matter’ report outlines two forms of subjective loneliness – social and emotional – with the former described as a perceived absence of a broader social network and quality friendships or sense of belonging, and the latter the unfulfilled desire for a close attachment figure such as a romantic partner.

Altogether, a quarter of the nation’s population – or more than five million Australians – report feeling the sensation of loneliness on a regular basis. And it’s experienced at a much higher rate for many at-risk communities, including young adults, single parents, First Nations people, those who identify as LGBT+, and migrants. It’s also an issue which has continued to grow during the Covid-19 pandemic and even post-lockdowns.

Rates of those reporting loneliness had remained relatively steady at around 17 percent between 2010 and 2016, but climbed almost 10 points by 2019, before then being exacerbated by Covid-19 and the nation-wide restrictions.

The heightened impact of loneliness on at risk communities

In a survey conducted in April of 2020, a staggering 46 percent reported feeling lonely during the prior week. While that figure had eased a bit by the start of 2021, the 36 percent rate still remained well above the previous average.

The added risks of loneliness

Of concern, lonely people have a 26 percent increased risk of death, with the impacts said to be equivalent to smoking 15 cigarettes or consuming six alcoholic drinks per day. Those affected are more predisposed to poor diet, physical inactivity, problem gambling, and even aggressive behaviour and bullying.

The KPMG report calculates the annual economic and healthcare cost of loneliness at $2.7 billion, or more than $1,550 per person per year.

The wider cost however when factoring in other health issues often associated with loneliness, such as depression, could be as high as $60 billion per annum. Another recent report conducted by KPMG in association with Rethink Addiction pegged the 2021 economic cost of related addictions such as alcohol, tobacco, gambling and illegal and prescription drugs and their impact on productivity and other associated losses at $80 billion.

The ecomomic cost of addictions in Australia

“In a world of always-on social media and digital connectedness, it seems almost inconceivable that loneliness could become a health crisis affecting up to one in four Australians,” the report states. “It’s a health priority that has been almost entirely overlooked by health regulators and providers in Australia. Loneliness is a significant risk factor for poor physical health, mental health problems, and decreased quality of life.”

To address the issue, KPMG recommends three critical actions; collaboration to establish clear policy directions to raise awareness of loneliness as a priority concern; communication to engage public, private and not-for-profit in embedding the combat of loneliness into new and existing health and well-being initiatives; and the tracking of progress on interventions through dedicated data collection, research and evaluation to better build the evidence base.

“Loneliness is a public health issue that many Australians identify with,” concludes KPMG mental health advisory lead Andrew Dempster. “However, it’s at risk of being trivialised because it remains widely unrecognised. There is robust evidence to suggest that loneliness is detrimental to physical and mental health and can have profound socio-economic impacts. It also has a negative impact in the workplace for both employees and employers.”