When Janet Edelman's brother became ill with schizophrenia, she and her parents went through a period of mourning for what they - and the rest of the world - had lost. "My brother should have been a professional of some sort. He was bright, he was a good student, he was a very lovely person," says Edelman. "At 16, when the illness struck, he became derailed; all that promise was not fulfilled."

Now, at 54, her brother is receiving excellent care, thanks largely to his family's efforts. He lived with them up until five years ago, and is now in a residential program. "My parents are very good advocates and have been able to get him the services he needs, but not everyone is so lucky," Edelman says. "He's still a very kind and gentle person," she adds. But her brother cannot work, and continues to hear voices despite taking medication.

His story illustrates the biggest economic cost exacted by schizophrenia: the loss of a productive member of society, often for the rest of his or her life. That loss is, by one estimate, responsible for about a third of the more than $60 billion annual cost of schizophrenia in the United States. "It really spans a lifetime, almost. An illness that's that enduring and disabling has huge costs associated with it," says Anthony Lehman, professor of psychiatry at the University of Maryland in Baltimore and a member of the Schizophrenia Patient Outcomes Research Team, which is funded by the National Institute of Mental Health and the Agency for Health Care Policy and Research.

Some people with schizophrenia can, with appropriate support, hold down jobs and even succeed in demanding careers, but most find themselves unable to work, and services to help get people with schizophrenia back into the workforce are scarce. One 2006 study of more than 1,400 people with schizophrenia, average age about 41, found that just 14.5% were employed in the mainstream workforce. That compares to 80.9% employment for US men and women ages 35 to 44, according to Bureau of Labor Statistics data for 2006.

For people who don't have the family support that Edelman's brother had - or who refuse it, often because of the paranoia that is a hallmark of the disease, along with the common belief among people with schizophrenia that they are not really ill - the streets may end up as the only option. This can in turn lead to a costly cycle of incarceration, hospitalization, and homelessness that does nothing to help the individual with schizophrenia get well. "These costs are spread throughout the entire system," says Kenneth Duckworth, medical director of the National Alliance on Mental Illness (NAMI), the advocacy group for mentally ill people and their families. "The meta-effect on society is even more extensive than we think because of these kinds of problems."

An estimate by Boston-based consultants Analysis Group, pegged the total annual US direct and indirect costs of schizophrenia at $62.7 billion for 2002. Direct healthcare costs amounted to $22.7 billion: 35% for long-term care, 22% for drugs, 31% for outpatient care and professional fees, and 12% for hospital inpatient stays and services. This marks a major shift since 1991, when inpatient care represented 59% of direct health care costs, and drugs accounted for less than 1%.

Lost productivity for people with schizophrenia and their families made up the largest portion of total excess US costs due to schizophrenia, accounting for $32.4 billion, or 52% of the total. Unemployment of individuals with schizophrenia made up about two-thirds of this figure, while caregivers' lost productivity accounted for about one-quarter. Premature death due to suicide and reduced productivity on the job represented 3% and 5% of the total, respectively. "Anyone who has a family member with schizophrenia - you lose days of work, lose a lot of your own well being," says Lisa Dixon, professor of psychiatry at the University of Maryland in Baltimore, whose clinical work and research focuses on schizophrenia.

Moreover, the opportunities that families themselves offer for helping people with schizophrenia, beginning with providing a detailed medical history if the patient is unable to, are "sorely underrealized," adds Dixon, whose brother was diagnosed with the illness in his early 20s. Providers' perceptions of patient confidentiality are often a major obstacle to getting families involved in care. "Providers think there are all these confidentiality rules that can't be dealt with," says Dixon. "That's just plain wrong."

Families of people with mental illness have helped found advocacy organizations such as NAMI, as well as Mental Health America (formerly known as the National Mental Health Association) and NARSAD (the Mental Health Research Association), a nonprofit dedicated to funding research on schizophrenia and depression. These groups have been vital in improving services for people with mental illnesses including schizophrenia and in destigmatizing mental illness, say clinicians who work with this population. Nonetheless, clinicians and family members agree there's a long way to go before everyone in the United States with schizophrenia has access to state-of-the-art care.

The paradigm of treatment for schizophrenia in the United States has cycled between institutionalization and release, says Jeffrey Geller, director of public-sector psychiatry at the University of Massachusetts Medical School in Worcester. Authorities began building public hospitals to house and treat the mentally ill in the 1830s, moving them out of poorhouses and jails and into asylums. "The argument for building those hospitals was that states could save money and do what's right," Geller explains. The current drive toward deinstitutionalization, which began in the 1950s when the first effective antipsychotic drug, chlorpromazine, was introduced, was based on the same rationale, he adds.

Most of the money that had been spent caring for mentally ill people in hospitals never made it out into the community mental health system, according to Kenneth Dudek, president of Fountain House in New York City. Fountain House, founded in 1948 to provide support to people with serious mental illness, now offers housing, employment training, education, and more to these individuals.

"This is at least as much of a system-design issue as it is a financing issue," argues Sherry A. Glied, professor of health policy and management at Columbia University's Mailman School of Public Health in New York City. "We don't have a great system for providing care outside the hospital."

Glied points out that most people with schizophrenia weren't hospitalized even before deinstitutionalization began, and that the care people did receive in the hospital was far from uniformly good. "A lot of money did find its way to the community in a whole bunch of different ways," she adds, pointing to Social Security disability, housing subsidies, and food stamps.

The real issue, says Glied, is making sure that providers are actually offering evidence-based treatment and support for people with schizophrenia, such as housing and help with employment. "Just throwing more money into the system is not going to solve this problem in itself," she says, although the system could likely use a bit more cash. In recent years, states have tended to hold mental health care funding steady or cut it, and the federal non-Medicaid investment "is small and it hasn't grown," says Ron Honberg, director of legal and policy affairs at NAMI.

Data are steadily accumulating on evidence-based treatment that can help people with schizophrenia avoid hospitalization and lead more productive lives. Boosting compliance with medication regimens is one way to reduce costs associated with the disease, although this is easier said than done. One study of California Medicaid beneficiaries with schizophrenia found just 41% were taking their medications as prescribed. Those who were in compliance were significantly less likely to be hospitalized; over a two-year period, 14% were admitted for psychiatric care and 7% were hospitalized for medical care, compared to 35% and 13% for noncompliant individuals, respectively. Another study estimated that rehospitalization due to noncompliance with antipsychotic drug treatment costs the United States about $1.5 billion annually.

More widely available supported employment programs could help lower the toll of reduced productivity among individuals with schizophrenia, many advocates argue. Such programs can roughly double the rate of employment among serious mentally ill individuals, while combining them with cognitive training, such as the "Thinking Skills for Work Program," may boost rates of employment and productivity even more.

Excess healthcare costs for US patients with schizophrenia, 2002
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Source: J Clin Psychiatry, 66;1122-9, 2005

These services, however, are in short supply. "The vast proportion of people in the public sector are able to get medications for schizophrenia which are effective to a degree in controlling their symptoms," says Stephen R. Marder, professor of psychiatry and biobehavioral sciences and director of the Section on Psychosis at UCLA. But psychosocial and rehabilitation services are "very hard to access almost anywhere."

Lehman agrees. "The system of care, although in some ways it's improved, is still pretty fragmented. Also, a lot of the services we think of as evidence-based practices are not available," he says. "For the most part we don't have one-stop shops that provide services, not only medications, but counseling, vocational services, services for families, and so on."

"The reality for most people lags way behind the potential," agrees Edelman, who is currently vice president of NAMI-Maryland. "Some of that is funding, and some of that is changing the way we prioritize the money we do spend."