Estimates of Total Costs

Comprehensive “cost of illness” studies quantify and aggregate, in monetary terms, the various costs associated with particular illnesses or disorders. Although there are many recent studies of this type in European countries, the most recent estimates in the United States correspond to 1995 for mental disorders (National Institute of Mental Health, 2000), 2002 for drug abuse (Office of National Drug Control Policy, 2004), and 1998 for alcohol abuse (Harwood, 2000). Aggregating service costs and health and productivity costs7 for individuals age 18 and older,8 the annual economic costs of mental disorders were estimated at $185 billion in 1995 (National Institute of Mental Health, 1999), the annual economic costs of drug abuse in 2002 were estimated at $180.9 billion (Office of National Drug Control Policy, 2004), and the annual economic costs of alcohol abused in 1998 were estimated at $185 billion (Harwood, 2000). These reports do not permit an estimate of costs specific to people from birth to age 24. However, in an analysis for the committee, Eisenberg and Neighbors used data in these reports to make a rough approximation, for the year 2007, by making the following two assumptions: (1) the full cost of services for this age group per person is twice as high as the mental health care costs per person estimated by Ringel and Sturm (2001)9 and (2) the population share of health, productivity, and crime-related costs for people ages 0-24 is 35.5 percent (a calculation based on Supplementary Material, Additional File 4 to Michaud, McKenna, et al., 2006). Under these assumptions, Eisenberg and Neighbors estimated that the total annual economic costs are roughly $247 billion as of 2007 (in 2007 dollars),10 or about $2,380 per person under age 25. This per-person total includes about $500 in health service costs and $1,900 in health, productivity, and crime-related costs.

Several caveats pertain to this estimate. Perhaps most notably, one would not be able to prevent all of these costs, no matter how much one

7

The authors measured health and productivity costs by estimating the lost or diminished income due to morbidity and mortality. This is typically called a human capital approach to valuing health. Estimates from the human capital approach tend to be lower than estimates from willingness-to-pay approaches and are typically considered lower bound estimates (Hirth, Chernew, et al., 2000). Note that they also accounted for costs to other members of society, such as informal care and crime.

8

Although the reports are not specific about the age groups included, one can infer that they apply to those age 18 and over based on the data sources used.

9

This is a conservative assumption in two respects. First, it is lower than the adjustment factor of 3-4 estimated by Costello, Copeland, and colleagues (2007). Second, treatment costs are rising over time; for example, Mark, Coffey, and colleagues (2005) found that mental health and substance abuse treatment costs for the full population increased from $60 billion in 1991 to $104 billion in 2001.

10

 Note also that the estimate of total costs accounted for population growth.



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