Market Trends

Financial Costs of Insomnia

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insomnia economics

By taking a look at macro-level expenses, practitioners can better calculate the bottom line of this common sleep disorder.

Although chronic insomnia is recognized as the most common sleep disorder among adults, it remains woefully under-recognized and under-treated. And although most sleep medicine specialists understand that their patients with insomnia suffer higher rates of medical and psychiatric comorbidity as well as worse quality of life, few are aware of the financial burden of this vexing condition.

Of course, sleep medicine practitioners generally function at the micro level, focusing on individual patients. Few are incented to consider the macro-level financial implications of sleep disorders such as chronic insomnia. Yet it is precisely this deeper understanding that is necessary for the survival of the field. And, depending on your practice setting, it might be required for your professional survival too.

In an era of increasing scrutiny, comprehensive sleep medicine centers, sleep networks, and businesses in the sleep services space will do well to familiarize themselves with the costs of a poor night’s sleep. Sleep specialists should take a more active role in the assessment, treatment, and long-term management of insomnia.

Insomnia Economics

Estimates of total insomnia-related costs in the United States have ranged from $30 to $35 billion per year1 to $92.5 to $107.5 billion per year.2 These costs include direct treatment costs, such as physician encounters and prescriptions, as well as indirect costs, such as consumption of medical services, increased accident risk, and lost workplace productivity.

Breaking Down the Numbers

To take a closer look at how the costs of insomnia pile up, let’s quickly review three recent representative studies. (There are many other well-executed studies of interest. For a more detailed discussion, check PubMed for my upcoming comprehensive review of insomnia economics.)

Daley et al3 assessed insomnia symptoms and self-reported insomnia sequelae in a representative Canadian sample (N=948). The authors administered a number of validated questionnaires to assess sleep and physical and mental health. Participants were characterized as good sleepers, having insomnia symptoms, or having full-blown insomnia syndrome. In addition, participants consented for review of their medical records within the state-sponsored (ie, socialized) healthcare system. Total annual costs (direct and indirect) were $421 for good sleepers, $1,431 for people with insomnia symptoms, and $5,010 for people with insomnia syndrome. Notably, these authors reported that 76% of all insomnia-related costs were due to work absences and decreased workplace productivity.

In a larger study (N=2,086), Sarsour and colleagues4 analyzed data from a sample of patients in an insurance database. People were labeled as having insomnia if they carried an ICD diagnosis of insomnia, or if an insomnia medication had been prescribed. Next, these participants were matched for age, sex, BMI, and medical comorbidities with noninsomnia controls. This design allowed investigators to assess the relationship between insomnia and healthcare utilization while controlling for pertinent demographic variables as well as the most common medical and psychiatric comorbidities. Overall costs for people with moderate-severe insomnia were significantly higher than for matched controls ($1,323 vs $757, P < .05). Similarly, lost productivity costs were also much higher among people with moderate-severe insomnia relative to controls ($1,739 vs $1,013, P < .001).

Finally, a number of analyses have been published utilizing data from the American Insomnia Survey. Among the most intriguing of these, Shahly et al5 analyzed data from a representative sample of nearly 5,000 working US adults. Of 18 comorbid conditions, only arthritis and other chronic pain were more strongly associated with injuries than was insomnia.

insomnia employee costs

Insomnia’s costs include workplace absenses and lost productivity even when present.

Does Treatment Lower Costs?

Of course, there are multiple criteria for evaluating treatment. But from a financial perspective, an important question is: Does treating insomnia save money? To date, only a handful of studies have evaluated the financial cost/benefit of targeted insomnia interventions. Both medication as well as cognitive-behavioral treatments have been considered.

For a number of reasons, including ease of administration/evaluation and industry support, the majority of cost-effectiveness studies to date have considered medications for insomnia. A plethora of medications are used to treat insomnia, and readers are referred to an excellent recent review for additional information.6

Existing data consistently support the cost-effectiveness of treating chronic insomnia. Jhaveri et al7 analyzed health care claims in a large claims database (N=88,305). Although their stated objective was to employ statistical models to forecast potential costs to health plans of insomnia treatments, these authors found that zolpidem extended release (Ambien CR) was associated with an annual cost savings of $1,253 per patient treated, greater than other commonly prescribed sleep medications.

In a study specifically designed to assess the 6-month cost-effectiveness of eszopiclone 3 mg (Lunesta), Botteman and colleagues8 found this treatment to be associated with a cost per quality-adjusted life year (QALY) between $9,930 and $36,894. A more recent study produced similar results.9 To place these findings in context, across medical conditions $50,000 is a generally accepted cost per QALY, suggesting that treating insomnia is cost-effective by common standards.

In addition to these pharmacotherapy studies, one study has sought to evaluate the cost-effectiveness of a behavioral intervention for insomnia. In this study, brief cognitive behavioral therapy (CBT) was administered (N=84), and healthcare utilization was assessed via review of medical records. Significant decreases were observed in five of six measures of post-treatment healthcare utilization (all P < .05), with overall reductions in healthcare utilization ranged from $75 to $200 per patient, depending on outcome.10

Although preliminary, this study is especially important because CBTs are often considered the gold standard treatment for chronic insomnia; the AASM Clinical Guideline for the Management of Chronic Insomnia in Adults specifically recommends that all insomnia patients, including those prescribed a hypnotic medication, undergo CBTs when possible. Unlike medications, which incur recurring costs, the benefits from CBT are maintained and increase long after treatment is completed.

Future Directions

It is clear that patients with insomnia experience more costly medical and psychiatric conditions, consume more healthcare services, experience reduced workplace productivity, and are at greater risk for costly accidents than their noninsomnia peers. And evidence suggests that both pharmacologic and CBT approaches to treating insomnia are cost-effective.

Nonetheless, empirical scientific and business questions remain. The literature will benefit from sophisticated economic analyses based on hard outcomes (eg, healthcare utilization, controlled workplace productivity, and documented accident costs) as well as increased details regarding treatments administered (eg, dosing regimen and duration of medication and behavioral therapies). Evaluation of telemedicine approaches, including online CBTs, is essential.

In terms of practical application, the bottom line is that insomnia is a major public health problem, with substantial health consequences and economic costs to the public, enterprise partners such as self-insured employers, as well as other healthcare payors. Until cost effective treatments are adopted, our insomnia problem is here to stay. Hence, the opportunities for commercial solutions appear significant, and these are certainly relationships that we are actively exploring. For forward-thinking sleep centers, the ability to incorporate effective insomnia therapies will serve as a competitive advantage in partnership discussions, especially their negotiations with payors.

EmersonWickwire, PhD


Dr Emerson Wickwire was recently named director of the insomnia program at the University of Maryland School of Medicine. He is a recognized expert in the non-drug treatments of sleep disorders and sustainable growth in sleep medicine. He is the inventor of the proprietary WellTap online sleep training system, which is currently undergoing rigorous independent scientific evaluation, including impact on economic outcomes.

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