Costs of schizophrenia and other psychoses in urban Australia: findings from the Low Prevalence (Psychotic) Disorders Study

Objective: To estimate the costs associated with the treatment and care of persons with psychosis in Australia based on data from the Low Prevalence Disorders Study (LPDS), and to identify areas where there is potential for more efficient use of existing health care resources.

Method: The LPDS was a one-month census-based survey of people with psychotic disorders in contact with mental health services, which was conducted in four metropolitan regions in 1997-1998. Mental health and service utilization data from 980 interviews were used to estimate the economic costs associated with psychotic disorders. A prevalence-based, 'bottom-up' approach was adopted to calculate the government and societal costs associated with psychosis, including treatment and non-treatment related costs.

Results: Annual societal costs for the average patient with psychosis are of the order of 46,200 Australian dollars , comprising 27,500 Australian dollars in lost productivity, 13,800 Australian dollars in inpatient mental health care costs and 4900 Australian dollars in other mental health and community services costs. Psychosis costs the Australian government at least 1.45 billion Australian dollars per annum, while societal costs are at least 2.25 billion Australian dollars per annum (including 1.44 billion Australian dollars for schizophrenia). We also report relationships between societal costs and demographic factors, diagnosis, disability and participation in employment.

Conclusions: Current expenditure on psychosis in Australia is probably inefficient. There may be substantial opportunity costs in not delivering effective treatments in sufficient volume to people with psychotic disorders, not intervening early, and not improving access to rehabilitation and supported accommodation.