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Schizophrenia’s Behemoth Burden Grows

5 Oct 2016

by Michele Solis

Schizophrenia cost the US an extra $155.7 billion in 2013, according to a study published in the Journal of Clinical Psychiatry. This economic burden far exceeds a 2002 estimate, with the bulk due to indirect costs, including loss of productivity due to unemployment or caregiving. This finding signals a need for therapies that ameliorate cognition or otherwise help functioning in people with schizophrenia.

“In addition to symptom control, therapies need to enable patients to be stable and functional in order for us to eventually lower these indirect costs," said author and health economist Myrlene Sanon Aigbogun of Otsuka Pharmaceutical Development and Commercialization, Inc., in Princeton, New Jersey, which conducted the study in collaboration with H. Lundbeck A/S, in Copenhagen, Denmark.

The study provides an overdue update to the previous estimate, which pegged the economic burden of schizophrenia in the US at $62 billion (Wu et al., 2005).

“Thank goodness we now have an updated estimate,” said Lisa Dixon, a psychiatrist and researcher in mental health policy at Columbia University in New York City and director of the Center for Practice Innovation at the New York State Psychiatric Institute, who was not involved in the study. “I knew the $62 billion number wasn't correct any longer, but we had nothing else to reference.”

The jump in cost may be attributable to various factors, including the prevalence of schizophrenia, unemployment rate, and caregiving hours used by the new study. Other potential factors include the Affordable Care Act of 2010, as well as increased unemployment amid the economic downturn starting in 2008.

“Having a grasp of the burden helps us understand what the unmet need is in schizophrenia, which helps us guide developing new treatments,” Sanon Aigbogun told SRF.

The numbers could also inform research into which policies may lower costs, with concomitant improvements in outcome.

The new estimate jibes with the costliness of mental disorders in general. A recent paper looking only at total healthcare spending in the US reported that mental disorders—a category which included Alzheimer’s disease and other dementias—amounted to $201 billion in 2013, outweighing that for other disease groups such as heart disease or cancer (Roehrig, 2016). Although this study did not include indirect costs such as unemployment and caregiving, the estimate was notable for including the overlooked institutionalized population, covering people in nursing homes, psychiatric hospitals, and prisons, as well as those in the military.

In excess

Compared to other disorders, schizophrenia is a tough one to put a price on. Because direct health care costs can recur over a person’s adult life, these costs fluctuate depending on the various policies in place at the time; this makes estimating something as simple as the cost of a hospital day a challenge. Beyond the healthcare world, schizophrenia also incurs costs related to encounters with law enforcement and homelessness, which the new study tried to capture.

On top of that, as for many chronic diseases, indirect costs figure prominently, such as a loss of productivity for both the people with schizophrenia and for any caregivers they may have.

This makes the new study particularly interesting, according to Dixon. "You have people who are unemployed for good chunks of their lives," she said.

"I was very pleased that they included the estimated cost of caregiving, because that is something that is often neglected," Dixon added.

To get at schizophrenia’s economic burden—that is, what it costs above the costs of those without the disorder—Sanon Aigbogun and colleagues calculated average direct and indirect costs specific to schizophrenia, as gleaned from insurance claims databases and other publicly available sources. They then subtracted from this the average cost for someone without the disorder. The difference was then multiplied by the number of people estimated to have schizophrenia in 2013 to get a total burden estimate.

To this end, the researchers used a prevalence of 1.1 percent (as calculated by the US National Institute of Mental Health)—about twice that used in the 2002 estimate. This difference could mostly but not entirely account for the ballooning of the economic burden: When using the 0.5 percent prevalence used in the 2002 study, Sanon Aigbogun and colleagues reported excess costs of $75.3 billion.

The new study also used a higher unemployment rate (58 percent) and factored in more caregiving hours (1,040 hours/year) than the previous study did, both of which reflect the current best estimates, Sanon Aigbogun said.

Consistent with the 2002 study, a great deal of the cost of schizophrenia rested in indirect costs. Of the entire excess burden, 38 percent was associated with unemployment, 34 percent with productivity loss associated with caregiving, while 24 percent went to direct healthcare costs.

Schizophrenia is also costly compared to other adult-onset psychiatric disorders, according to a new analysis that Sanon Aigbogun also participated in, which finds schizophrenia costs per patient are double and triple the cost of bipolar disorder and major depressive disorder (MDD), respectively (MacEwan et al., 2016). Similarly, another study found that despite a sixfold higher prevalence of MDD, it costs only 35 percent that of schizophrenia (Greenberg et al., 2015).

Lower costs, improve outcomes

Beyond developing better drugs, finding ways to lower these costs may also bring improvements in outcome.

“I think focusing on employment could help immensely,” Dixon says. “We have evidence-based practices that help individuals with schizophrenia gain employment, which we don’t use because they’re not typically reimbursed by insurance.”

For example, one employment program showed a decrease in use of healthcare services, as well as improved quality of life (Drake et al., 2016). Likewise, Dixon noted that family education programs may also reduce hospitalizations, if not caregiving hours as well, which could also lower direct health care costs.



Submitted by Huajie Jin on

This comment was co-written by Iris Mosweu.

Schizophrenia is a chronic, severe, and disabling disease characterized by psychotic symptoms that alter a person’s perception, thoughts, affect, and behavior. Schizophrenia poses a great financial burden for health systems, families, and society. Cost of illness (COI) studies provide useful information on the economic burden that schizophrenia imposes on a society. In a recent systematic review (Jin and Mosweu, 2016), we identified 19 COI studies which report the societal cost of schizophrenia across various countries. To facilitate meaningful comparison of cost over countries, the cost estimates of all included studies were converted to 2015 US dollars.

Since the publication of our review, a new COI study (Cloutier et al., 2016), which estimated the societal cost of schizophrenia in the US, was published. What new evidence did Cloutier et al. provide us?

Societal cost of schizophrenia in the US: change over time

Our review identified four COI studies for schizophrenia in the US. During the 1990s, Rice and colleagues reported an annual societal cost per patient of $17,569 in 1985 (Rice and Miller, 1996), and $18,531 for 1990 (Rice and Miller, 1998). These cost estimates have at least doubled in studies published after 2000: $55,373 for year 2002 (Wu  et al., 2005), and $34,083 for year 2008 (Desai et al., 2013)1. The latest cost estimate reported by Cloutier et al. is $46,116.

Due to variations of methods employed by these studies, the cost estimates reported above might not be directly comparable. However, a general trend of increased societal cost over time can still be observed. This might be caused by introduction of new, expensive atypical antipsychotic drugs and increases in average wages. According to the US Social Security Administration (accessed on October 28, 2016), the average indexed yearly earning monthly income received by a beneficiary of working age increased from $16,822 in 1985 to $44,888 in 2013. This increase contributes directly to productivity losses for patients and carers, as well as labor cost of the healthcare system.

Societal cost of schizophrenia: US versus other countries

Our recent review identified cost estimates for 14 countries. According to the cost reported by Desai et al. (Desai et al., 2013), the societal cost in the US is lower than in Sweden ($46,458), Ireland ($51,634), the UK ($94,229), and Norway ($94,587), but higher than Japan ($33,851), Switzerland ($30,405), Germany ($30,140), Canada ($29,864), France ($26,831), South Korea ($23,657), Spain ($12,660), and Thailand ($5,818)1.

The latest cost reported by Cloutier et al. didn’t change the US’s ranking on the list, and, unsurprisingly, the authors observed that the greater burden of schizophrenia is from indirect costs due to productivity loss associated with unemployment and informal care.

It is obvious that there are huge variations in the societal cost of schizophrenia among different countries, possibly due to differences in the state of the economy, healthcare systems across countries, and widespread methodological heterogeneity in COI studies. For example, although all COI studies in the review included productivity losses, some studies only considered patient productivity loss due to morbidity, while other studies also considered patient productivity loss due to premature death and carer productivity losses. Therefore, the results might not be directly comparable.

Future study

It is noted that all five COI studies conducted for the US are prevalence-based studies, which measure the costs of disease over a certain period of time, usually one year, regardless of the date of illness onset. Prevalence-based studies are most useful if decision makers are only interested in taking a snapshot of the current disease burden of schizophrenia. However, for decision makers interested in knowing potential savings that can be made from preventing schizophrenia, the incidence approach would be more appropriate, as it shows how costs vary at different disease stages. Therefore, future research should focus on incidence-based methods, with the use of up-to-date epidemiological data, while taking into consideration the disease course.

1. Cost estimates reported in 2015 US dollars.