NCPA - National Center for Policy Analysis

The High Costs of Illness

August 18, 2000

Millions of Americans deal with the suffering, pain and loss caused by illness. Many die prematurely, leaving more emotional pain for loved ones. While the costs of illness are enormous from any perspective, the economic losses due to illness and premature death are staggering.

There are three components to the cost of illness:

  • Direct costs -- Total expenditures for public and private health care in the U.S. in 2000 are estimated at $1.3 trillion, or 14 percent of gross domestic product (GDP).
  • Indirect costs -- Including lost worker output from reduced job performance, missed work due to illness (morbidity), and premature death (mortality) are estimated at $1.7 trillion dollars for 2000.
  • Intangible costs -- The additional burdens of emotional and physical pain and suffering of patients and family members caused by illness. Although these costs are large, they are difficult to value monetarily.

Thus the total economic costs of illness are estimated at about $3 trillion annually. These costs represent 31 percent of U.S. GDP.

Source: "The Benefits of Medical Research and the Role of the NIH," May 2000, Joint Economic Committee of Congress, Washington, D.C.


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