Mental disorders impact a significant portion of the global population, presenting substantial challenges to healthcare systems due to high hospitalization costs and resource demands. This narrative review explores the economic implications of mental health disorders, focusing on hospitalization costs, the effectiveness of interventions, and the outcomes of recent research. Materials and Methods: A narrative review was conducted, sourcing articles from PubMed and Google Scholar published between 2014 and 2024. The search terms included combinations related to mental illness, costs, hospital care, and mental healthcare interventions. A total of 1,110 articles were initially identified, with 37 studies meeting the inclusion criteria after rigorous screening by two independent researchers. These studies included quantitative and qualitative data covering a range of outcomes such as hospital admission rates, consumer satisfaction, and quality of life. The findings of the present review reveal that mental disorders significantly increase hospitalization costs due to frequent admissions, extended stays, and the need for specialized treatments. Additionally, physical comorbidities in individuals with mental disorders lead to higher healthcare costs and resource use. Integrated care models, early intervention, and preventive strategies show promise in reducing these costs and improving patient outcomes. Conclusions: Our review emphasizes the critical need for integrated healthcare strategies that address both mental and physical health to reduce hospitalization costs and improve outcomes. Effective management of mental health disorders requires comprehensive approaches, including complex outpatient services and preventive care. Future research should focus on standardizing methodologies to provide clearer insights into the economic impact of mental health conditions and guide effective healthcare strategies.