The Parallel Pandemic: Addressing the Mental Health Crisis through Public-Private Funding

Health Finance Institute
5 min readSep 9, 2021


This is part two of a two-part series on the global mental health crisis and potential solutions. Content Warning: This article includes a discussion of mental health issues.

Increasing financial support for and investment in mental health has not been consistently reflected in global health funding trends, due to complex but often intersecting challenges. Fortunately, a growing number of researchers are analyzing these trends to identify current barriers and challenges, including the quantification of the health and economic impacts of mental illnesses and treatments. COVID-19 has deepened the worldwide mental health crisis, bringing unprecedented challenges but also novel investments and solutions towards the disease area. Even with new commitments and solutions to increase funding for mental health, public-private partnerships must be leveraged to fill the funding gap that exists.

Although difficult to parse out, analyses of development assistance for health (DAH) have reported that development assistance for mental health (DAMH) has always been critically underfunded, especially proportional to the burden of disease. As Dr. Paul Summergrad from Tufts Medical School notes, reducing the burden of mental illness has, for the first time, been formally incorporated in the United Nations Sustainable Development Goal (SDG) 2030 targets. However, even after the SDG 2030 targets were set, only 2 out of 15 bilateral donor agencies listed mental health explicitly as a priority, further demonstrating the continued lack of strategic commitment to the disease area.

Determining global trends in mental health funding has itself faced setbacks due to the decentralized nature of health funding and tracking. One study aiming to identify trends found DAMH represented ~0.4% of DAH funding in 2015, with private philanthropy and US funding the first and second-largest sources, respectively. In another study looking at the same period, philanthropic funding for DAMH has remained critically low even as philanthropic funding for DAH has increased significantly.

Many organizations and governments, however, are aware of this and are looking to understand better the challenges in raising global mental health funding. For example, the Bill and Melinda Gates Foundation has listed “Mental Health for All” as a Goalkeeper Accelerator project, working with partners such as HSBC and Sierra Leone’s government to make high-impact progress on expanding mental healthcare, and the WHO implemented an action plan from 2013–2020 to help build global, national, and local support for mental health.

The lack of health and economic evidence for mental illness prevention, treatment, and care is a large part of the reason why there is low investment globally. Commonly identified barriers and challenges to increasing funding for mental health include a lack of understanding of the negative impacts of mental illnesses, including but not limited to, individual and population health impacts, impacts on productivity, and uptake of economic welfare programs.

A return on investment cannot be calculated where there is a lack of evidence, and so new tools and models are currently being developed to build stronger quantifiable cases to support the cost-effectiveness of mental health interventions. Dr. Dan Chisholm of the WHO has, for the first time, using the WHO OneHealth tool, modeled the coverage gap and investment needed to bring care of depression and anxiety disorders worldwide to minimally acceptable levels. The analysis estimated that coverage of 80% of the population in need would require a US$141 billion investment between 2016 and 2030, as seen in the figure below. Given the large investment needed for coverage, new capital must be identified to address the need for scaling-up of mental health interventions.

With more comprehensive tools for health economic analyses and more and more evidence for the health investment gap particularly for mental health funding, there is a strong case for public-private partnerships helping inject new capital into mental health systems strengthening. In such partnerships, however, private sector funders need to see financial returns linked to the providers of capital. Health considerations directly impact productivity and therefore profitability and must be included in financial analysis. Several thought leaders in the field, such as Dr. Reudiger Krech of the WHO, have built out thoughtful analyses of public-private partnerships in global health that can be tailored to specific complexities of mental health financing. Dr. Krech’s key takeaways are highlighted below.

Domains of Focus for Public-Private Partnerships:

Trust and Stability: Investors seek stability in the political and economic environment, an essential criterion for putting capital at risk. Dr. Krech notes “The [European Central Bank] defines financial stability as a condition in which the financial system can withstand shocks without major disruption.” However, trust and stability are complicated for mental health financing as it is breaking new ground and may not necessarily be possible to seek a stable environment in the COVID-19 pandemic.

Investment and Growth Potential: Health investments are already attractive for private sector investors, and this can be seen in stock market index trends. Since 2006, the MSCI World Index rose by 60%–70%; in contrast, the healthcare index rose by almost 150%. In emerging markets, the index of the overall economy rose by 20%–25%. Healthcare sector equities rose by more than 160% within the same timeframe. The growing evidence for the need for mental health funding and the cost-effectiveness of such investments means there is growth potential in a relatively untouched market.

Sectoral Level Bias: Investors continue to prioritize pharmaceutical and health tech investments while other health areas — such as programmatic and systems strengthening — have been financially neglected. Dr. Krech notes that in India, between 2000 and 2013, 71% of FDI equity inflows went to the pharmaceuticals sector while hospitals and other health centers only received 21%. Considering the widespread deficits in mental health systems, there are real concerns that mental health systems would continue to be neglected due to sectoral bias, and investors must be made conscious of this bias.


It is well-documented that global mental health funding has not been sufficient to support mental health programs across different country contexts. This underfunding has only been exacerbated by the pandemic — preliminary studies indicate that the COVID-19 pandemic has increased the treatment gap for those with mental health conditions, putting even more strain on the health system and therefore requiring innovative financing mechanisms. The COVID-19 pandemic has been linked to increases in mental health conditions among the young, which will have a huge impact on the productivity of future workforces.

Given the untapped nature of mental health investments and new tools for understanding the health and economic impacts of such interventions to strengthen mental health, private actors may find public-private partnerships an effective mechanism to strengthen mental health programming with both financial and health benefits.

Written by Omar Khan, Claire Dziewicki, Jenna Patterson, graphics produced by Isabel Hardy



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