A recent study funded by the National Institute of Mental Health shows that the medicare participants who suffer from depression along with chronic medical conditions such as diabetes or congestive heart failure have much higher health care costs than those who do not have co-existing depression; the results were reported in the January 2009 issue of the Journal of the American Geriatric Society. The researchers reviewed medicare claims of nearly 15,000 participants most of whom suffered from diabetes; many had congestive heart failure and approximately one in five suffered from both medical conditions. The study compared health care costs for three groups: those who had been diagnosed with depression, those who had not been not formally diagnosed but who screened positive upon taking a depression questionnaire or who were already taking medication for depression, and those who did not have depression. The results of the analysis indicated that over a 12 month period, those who were diagnosed with depression incurred approximately $23,000 in total health care costs, while those who did not have depression had their health care costs close to $12,000. The ones with possible depression, based on depression screening or already on depression medication costed the system an annual of about $14,000. This study clearly shows that the elderly who have depression along with chronic physical illness have much higher health care costs. In addition, the study shows that many in this high-risk group are not receiving the treatment needed for their mental illness. It is quite likely that the higher medicare co-payments associated with outpatient mental health care (50% as compared to 20% for medical services) are the reason for depressed seniors not getting the treatment they need and that could actually save a lot for the system as a whole. It goes without saying that improving mental health care for our elderly population is likely to reduce the overall health care costs quite significantly.