The Economics Cost of Poor Sleep

Used to be, employers did not attach an economic cost to the poor sleep habits of their workers – but a landmark study proved them wrong.

A research project by Access Economics, commissioned by the committee of Sleep Health Australia, attempted to determine the costs associated with sleep disorders. Previous analyses of this subject had focused mainly on the direct healthcare costs, while completely disregarding the indirect financial and nonfinancial costs of this growing problem.  Unfortunately, the former approach resulted in an incomplete picture.  This pioneering study from 2004 aimed to comprehensively evaluate both the direct health and indirect economic costs for this sizeable and underrecognized problem.
The study was performed using data from the Australian population (expressed in US dollars); however, the results can be easily applied to countries with similar economies, such as the United States. In 2004, it was estimated that more than 6% of the Australian population suffered from a chronic sleep disorder, with a total cost of $7.5 billion.  Australia had a population of 20.1 million in 2004; therefore, the equivalent cost for a population as large as the United States (293 million) would have been $109 billion!  These numbers have all likely risen dramatically in the years since this study was published.
Estimations of the direct health costs included hospital care, health practitioners, pharmaceuticals, diagnostic tests, health aids, aged care, research etc.  They also involved a fraction of the cost for various conditions linked to sleep disorders. Financial costs consisted of nonhealth costs of work-related injuries, road accidents, lost production through premature workforce separation, absenteeism, low productivity and premature mortality.  Nonfinancial costs arose from the loss of “healthy” life, premature death and loss of life quality.
This analysis was very conservative.  The long-term financial impacts of childhood sleep disorders, such as learning or behavioral disorders were not included, nor did it account for social costs. Consequently, it is likely that this analysis immensely underestimated the actual economic cost of sleep disorders. Disordered sleep is detrimental to cognitive and psychomotor function and deserves to receive the same attention as many more mainstream conditions with similar expenditures, such as asthma. The bulk of costs from sleep disorders lies within the hidden economic costs, not the clear health ones.  It is vital that we continue advancing cost-effective prevention and treatment options, as well as increasing public awareness and education.

Fast Facts:

  • There is a strong correlation between disordered sleep and accidents. The odds of injury from a motor-vehicle accident are 7.2 times greater with sleep apnea and the odds of a work-related accident are 3.1 times greater with sleep apnea.
  • Total financial costs of sleep disorders represent nearly 1% of gross domestic product or $225 per Australian and $3750 per Australian with a chronic sleep disorder in 2004
  • The odds ratio for depression in patients with disordered sleep is 2.85!


Hillman DR, Murphy AS, Pezzullo L. The economic cost of sleep disorders. Sleep. 2006;29:299–305. [PubMed]

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