OBJECTIVE: The authors examined the overall health care costs associated with depression and anxiety among primary care patients. METHOD: Of 2,110 consecutive primary care patients in a health maintenance organization, 1,962 were screened with the 12-item General Health Questionnaire. A stratified random sample of 615 patients were selected for further diagnostic assessment; 373 of these patients completed the Composite International Diagnostic Interview at baseline and 328 were reassessed 12 months later. Computerized cost records were used to calculate total health care costs for the 6-month period surrounding the baseline assessment and a similar period surrounding the follow-up assessment. Cost accounting data were available for 327 patients at baseline and for 206 patients at both assessments. RESULTS: Primary care patients with DSM-III-R anxiety or depressive disorders at baseline had markedly higher baseline costs ($2,390) than patients with subthreshold disorders ($1,098) and those with no anxiety or depressive disorder ($1,397). Large cost differences persisted after adjustment for medical morbidity. Cost differences reflected higher utilization of general medical services rather than higher mental health treatment costs. Although most patients with baseline anxiety or depressive disorders showed significant improvement, longitudinal analyses did not show any clear relationship between change in psychiatric diagnosis and change in health care cost. CONCLUSIONS: Among primary care patients, anxiety and depressive disorders are associated with markedly higher health care costs even after adjustment for medical comorbidity. In this small sample, improvement in depression over 1 year was not clearly associated with decreases in cost.Abstract Teaser