Including Indirect Costs, Rare Disease Toll Nearly $1 Trillion, Report Says

The economic cost of 379 rare diseases (RDs) in the United States was nearly $1 trillion in 2019 when including indirect costs such as absenteeism, lost work productivity, and nonmedical costs like hiring caretakers to assist with daily living, according to a new report.

The study’s cost estimate, released by the EveryLife Foundation for Rare Diseases, is conservative, according to authors of The National Economic Burden of Rare Disease Study, given that the 379 RDs are a subset of nearly 7000 identified rare diseases worldwide. The authors estimated the economic cost at $966 billion.

“This landmark report changes the conversation about rare disease by moving from back-of-the-envelope estimates to data that reflect the true, massive economic impact a diagnosis has on families in the U.S. rare disease community,” said Annie Kennedy, chief of policy and advocacy at EveryLife. “Based on these data, rare diseases represent an urgent public health crisis that demands additional research, enhanced awareness, and improved access to diagnosis, care, and treatment.”

About 30 million Americans have RDs, according to the report, with 15.5 million of them represented in the survey conducted for EveryLife. Cost data on individual rare diseases were not provided due to insufficient sample size. The 379 diseases were aggregated into 16 groups to facilitate analysis.

In the United States, a disease is defined as rare when it affects fewer than 200,000 people, according to EveryLife. Except for cystic fibrosis and hemophilia, which are relatively well studied, information on the cost of illness for other conditions has been limited.

According to the report, direct medical costs represented $418 billion (43%) of overall annual costs. Topping the list of direct costs was inpatient care at $143 billion, followed by outpatient care at $62 billion. Other leading categories were outpatient-based drug administration cost ($49 billion) and prescription medication ($48 billion).

The remaining $548 billion represented indirect or nonmedical costs, led by absenteeism (15% of the total burden) and lost productivity, and “presenteeism”—workers functioning at less than their best due to health issues (14%).

Indirect costs also included lost productivity due to forced retirement and social productivity loss in community participation and volunteer work. Other major cost drivers included health care services insurance tends not to cover, such as experimental treatments, acupuncture, medical foods, and dental surgeries.

Nonmedical costs included paid daily care, necessary home and vehicle modifications, transportation costs, home schooling, missed schooling, and special education. Combined, they accounted for 12% of the overall total.

The study also found that rare diseases were most prevalent among those 65 and older (11.3% of those in that age group), compared with 4.6% of those ages 18-64 and 1.8% of those younger than 18. Those statistics dovetailed with the finding that Medicare, primarily for the elderly, had the highest prevalence of individuals with rare diseases at 11.5%.

On average, the working-age population with commercial health coverage bore most of the medical costs (51%), according to the survey. The average per-person excess direct medical cost was $26,887 more than that for those without RDs, the report found.

The origin of many RDs can be traced to single-gene mutations, according to the report. However, in other instances, there can be contributions from multiple genetic factors as well as influence from environmental factors, according to the National Human Genome Research Institute.

The report arrived at examining 379 diseases based on survey responses. Respondents were provided a selection of 156 diseases; a write-in portion of the survey resulted in the inclusion of the additional 223 diseases.

The study evaluated claims data from three sources: Medicare, Medicaid, and the Optum deidentified Normative Health Information System, a large, geographically diverse database of the privately insured.

EveryLife presented its findings during the Rare Disease Congressional Caucus briefing in February.

Reference

EveryDayLife Foundation. The National Economic Burden of Rare Disease Study. 2021. https://everylifefoundation.org/news/