The Financial Costs of Schizophrenia

The direct and indirect costs of schizophrenia cause a sizable societal burden.

Key points

• Schizophrenia is a chronic disorder affecting over 1 percent of the U.S. population.

• The annual societal costs per affected individual range from about $111,000 to $126,000 annually.

• Twenty percent of these costs result from direct expenses like health care, housing, and disability benefits.

• Costs can be lowered by investing in research that will lead to prevention and better treatments.

Schizophrenia is a severe, chronic, and disabling mental illness. It is characterized by “positive” symptoms such as hallucinations and delusions, and “negative” symptoms such as decreased motivation, difficulty with social relationships, and diminished ability to experience pleasure. Cognitive symptoms, including problems with attention, memory, and executive function, are also a hallmark of this disorder. These symptoms make it hard for people with the disorder to attend school, maintain employment, and otherwise lead productive lives. Over 3 million individuals in the United States, or about 1 percent of those between the ages of 18 and 64, have this disorder.

An important paper published in JAMA Psychiatry by Holly Krasa and colleagues discusses the economic costs resulting from schizophrenia. The authors analyzed data from a variety of sources including the Medical Expenditure Panel Survey, a comprehensive set of annual surveys gathering health care information about the U.S. population. They examined direct medical and non-medical expenses incurred by individuals with schizophrenia for example, health care utilization, disability benefits, and supportive housing costs. They also investigated indirect costs such as unemployment, underemployment, lower quality of life, and caregiver expenses.

Living Situations for Individuals with Schizophrenia

The research team reported that approximately 68 percent of individuals with schizophrenia reside in independent households, and almost 19 percent live in supportive housing. Another 5 percent live in long-term care facilities. Almost 5 percent are incarcerated, and about 3 percent are unhoused.

Societal Costs of Schizophrenia

The investigators found that annual costs resulting from schizophrenia were $366.8 billion in 2024 dollars. The annual cost per person living with the illness was $119,436.

Seventy-five billion dollars of that total cost resulted from direct expenses, while about $292 billion was from indirect expenses. About 41 percent of direct costs were related to healthcare expenditures, 40 percent to supportive housing costs and expenses related to homelessness, 13 percent to justice system expenses, and 6 percent to Social Security disability payments.

The $292 billion in indirect costs included 18 percent from lost wages, 14 percent from diminished quality of life, 15 percent from decreased life expectancy, 34 percent from unpaid wages for caregiving, and 20 percent from costs associated with diminished caregiver health and out-of-pocket expenses.

Costs varied depending on the state where a person resided. The state with the least expensive costs was Utah at $110,975 annually. Alaska was the most expensive at $126,225 annually.

Reflections

Schizophrenia is often diagnosed during adolescence and young adulthood. Although severity varies over time, it is usually chronic and impacts individuals and their caregivers over many decades.

Early treatment may help alleviate some symptoms and lessen some of the associated costs. New and better treatments may decrease an individual’s symptoms and lower both direct and indirect costs. However, the most effective way to diminish suffering and lower associated costs is to elucidate the causes of this disorder and develop preventative strategies. Schizophrenia research is grossly underfunded, but investments in research offer the best chance of long-term success in alleviating patient and caregiver suffering and lowering societal costs.

Note: This article originally appeared on Psychology Today.