Milken Institute Study: Chronic Disease Costs U.S. Economy More Than $1 Trillion Annually

Impact not inevitable: Is avoidable by improving treatment and prevention of chronic disease

Washington, D.C. - In a groundbreaking study released today by the Milken Institute, the annual economic impact on the U.S. economy of the most common chronic diseases is calculated to be more than $1 trillion, which could balloon to nearly $6 trillion by the middle of the century. Yet the news is not entirely grim because much of this cost is avoidable.

"An Unhealthy America: The Economic Burden of Chronic Disease" brings to light for the first time what is often overlooked in the discussion of the impact of chronic disease - the economic loss associated with preventable illness and the cost to the nation's Gross Domestic Product (GDP) and American businesses in lost growth.

"In every community in our country, people are suffering from preventable chronic diseases. Not only does that suffering affect our nation's overall health - but also our nation's economic productivity," said Richard H. Carmona, M.D., M.P.H., FACS. "With this new data from the Milken Institute, we now know the cost burden of chronic disease in our nation, and it's truly staggering. If we are unable to reduce the rate of chronic disease, the potential economic damage to our nation could be devastating. For both the physical and economic health of our country, we must bring together all sectors to find new, innovative, and cost-effective ways to prevent chronic disease. Any funding that we spend to prevent chronic disease today will actually be a valuable investment - with long-term dividends." Dr. Carmona is Chairperson of the Partnership to Fight Chronic Disease (PFCD), 17th U.S. Surgeon General (2002-2006), and President of Canyon Ranch Institute.

According to the study, seven chronic diseases - cancer, diabetes, hypertension, stroke, heart disease, pulmonary conditions and mental illness - have a total impact on the economy of $1.3 trillion annually. Of this amount, $1.1 trillion represents the cost of lost productivity.

"By investing in good health, we can add billions of dollars in economic growth in the coming decades," said Ross DeVol, Director of Health Economics and Regional Economics at the Milken Institute and principal author of the report. "The good news is that with moderate improvements in prevention and early intervention such as reducing the rate of obesity, the savings to the economy would be enormous."

The study is the first of its kind to estimate the avoidable costs if a serious effort were made to improve Americans' health. Assuming modest improvements in preventing and treating disease, Milken Institute researchers determined that by 2023 the nation could avoid 40 million cases of chronic disease and reduce the economic impact of chronic disease by 27 percent, or $1.1 trillion annually. They report that the most important factor is obesity, which if rates declined could lead to $60 billion less in treatment costs and $254 billion in increased productivity.

Looking even further ahead, the report measures the possible cost to future generations if escalating disease leads to lower investments in education and training. In a snowball effect, the report warns, this loss of human capital and skill building could reduce the nation's economic output by as much as $5.7 trillion in real GDP by the year 2050.

In addition to providing national numbers, the report ranks all 50 states by the reported number of these diseases per capita. According to the Milken Institute State Chronic Disease Index, West Virginia, Tennessee, Arkansas, Kentucky and Mississippi have the highest rates of chronic disease . Those with the lowest rates are in the West: Utah, Alaska, Colorado, New Mexico and Arizona.

To reduce the human and economic cost of disease, the Milken Institute calls for:

  • More incentives to promote prevention and early intervention, and;
  • A renewed national commitment to achieve a "healthy body weight."

"Today, most of the national policy discussion on health care is about financing mechanisms. This Milken Institute study suggests that the urgent need to act now to reduce the amount of preventable illness as the country ages deserves equal focus," said Ken Thorpe, Ph.D., Executive Director, Partnership to Fight Chronic Disease and Professor and Chair, Rollins School of Public Health, Emory University.

The report was created by researchers from the Milken Institute and was supported with a grant from the Pharmaceutical Research and Manufacturers of America (PhRMA), both of whom are partners in the PFCD.

"This study is a call to action. It's time for Americans to call for a change in how we effectively fight chronic disease. Chronic disease is a crucial driver of health-care costs, and its rates are rising. We need to reverse this trend and we need to do it now. It's common sense," says PhRMA president and CEO Billy Tauzin.

The full report is available at www.milkeninstitute.org. An interactive Web site with complete national- and state-level data for each of the chronic diseases is available at www.chronicdiseaseimpact.com.

About the Milken Institute: The Milken Institute is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. It is based in Santa Monica, CA. (www.milkeninstitute.org)

About The Partnership to Fight Chronic Disease: The Partnership to Fight Chronic Disease is a national coalition of patients, providers, community organizations, business and labor groups, and health policy experts committed to raising awareness of the number one cause of death, disability, and rising health care costs in the U.S.: chronic disease

Where to Find Information About the Milken Institute Report

Download the executive summary of the report (PDF)

Download the press release (PDF)