Modeling the lifetime costs of treating schizophrenia in Australia

Schizophrenia is arguably one of the most costly mental illnesses in terms of its impact on the economy, on the health system, and on patients and their families. This paper provides a framework for analyzing schizophrenia; this framework, in a limited data environment, generates estimates of the costs and outcomes of this disease based on location of treatment. This model differs from previous cost-of-illness studies in that it uses a Markov framework to estimate the incidence costs associated with schizophrenia based on a projected amount of a patient's lifetime spent in these treatment locations. The author believes this is the first time such a model has been developed and applied to estimating not only the community costs of schizophrenia but also the cost implications of treatment options and policy choices in Australia. Using a fundamental matrix solution, lifetime costs of illness are calculated and the principal cost drivers in schizophrenia treatment are identified.