Quick Summary
An Australian economic analysis estimated that insomnia, obstructive sleep apnoea and restless legs syndrome cost society A$51 billion in 2019–2020.
Approximately 72% of the estimated burden was the economic value assigned to lost health and wellbeing, not money spent on treatment.
Sleep disorders accounted for an estimated A$11 billion in lost workplace productivity, with reduced performance while at work contributing more than absenteeism.
The Economic Cost Of Sleep Disorders
When we think about health it’s usually in terms of physical and mental wellbeing. Sleep is often treated as something separate, or simply as a lifestyle issue. Yet conditions such as chronic insomnia and sleep apnoea can affect many of the same things we care about in other areas of health: how we feel, how we function, how well we work, and our overall quality of life.
Part of the reason sleep disorders are easy to underestimate is that many of their costs are hidden. Someone can keep going to work, looking after their family and getting through the day while still functioning well below their best. Those effects may never show up as a hospital admission or a day off work, but they remain important.
Australian researchers have been trying to put numbers around that less visible burden for some time. An earlier Deloitte Access Economics analysis estimated the cost of sleep disorders at A$36.4 billion in 2010 (Deloitte Access Economics, 2011). With newer evidence available, the Sleep Health Foundation commissioned an updated analysis. Published in 2021, the updated analysis examined insomnia, obstructive sleep apnoea (OSA) and restless legs syndrome (RLS). OSA involves repeated pauses in breathing during sleep caused by a narrowed or blocked airway, while RLS is an uncomfortable urge to move the legs, typically at rest. The analysis drew on Australian population data and published research to estimate the impact of the three conditions during the 2019–2020 financial year.
So how much did the analysis estimate these three conditions cost?
How Much Do Sleep Disorders Cost Society?
The headline estimate was that the three sleep disorders cost Australian society A$51 billion in 2019–2020 (Deloitte Access Economics, 2021).
The A$51 billion estimate was based on around 1.9 million Australians with OSA, insomnia or RLS, using fairly strict definitions of each disorder.
But the most important thing to understand is what the A$51 billion actually represents. It is not A$51 billion spent on appointments, medications or treatment. The economists included healthcare costs, but also lost productivity and the economic value of poorer health and quality of life, along with costs linked to selected medical conditions and injuries.
So what does the picture look like once those costs are separated out?
Where Do the Economic Costs of Sleep Disorders Come From?
The main finding was how little of the total burden came from medical treatment. Most came from the effect of sleep disorders on people's health, functioning and quality of life.
| Cost category | Estimated annual cost |
|---|---|
| Reduced wellbeing | A$36.6 billion |
| Lost productivity | A$11.0 billion |
| Healthcare expenditure | A$0.9 billion |
| Other financial costs | A$2.4 billion |
| Total | A$51.0 billion |
Rounded figures, in Australian dollars for 2019–2020. Source: Deloitte Access Economics (2021).
Reduced wellbeing accounted for about 72% of the total. Deloitte estimated this using disability-adjusted life years (DALYs), a way of combining years of healthy life lost through illness or disability with years lost through premature death.
The concept sounds technical, but the basic idea is simple. A health condition can take something away from a person's life even if it doesn't shorten that life. If sleep problems leave someone functioning poorly, feeling unwell or unable to enjoy everyday activities in the same way, economists can estimate that loss of health and then add it up across a population.
Deloitte estimated that about 169,000 years of healthy life were lost to these conditions in 2019–2020 and assigned each year a dollar value, which produced the A$36.6 billion estimate for lost wellbeing.
This economic value captures lost health and quality of life, allowing the burden of sleep disorders to be compared with other health problems. By contrast, direct care for the sleep disorders themselves accounted for about A$598 million, with another A$346 million linked to healthcare for associated conditions and injuries. The A$36.6 billion is also not money leaving the economy. The financial costs (healthcare, lost productivity and other costs) came to about A$14.4 billion, and the A$36.6 billion is a dollar value placed on lost health.
In other words, the largest costs were not sitting in hospitals or clinics. These costs were showing up in people's lives and in the workplace as well.
So how do sleep disorders affect people at work?
How Do Sleep Disorders Affect Workplace Productivity?
Deloitte estimated approximately A$11 billion in lost workplace productivity. Most of that did not come from people staying home from work. It came from people being at work but functioning below their usual level.
Presenteeism, the term used for reduced productivity while someone is still attending work, accounted for A$7.5 billion. Anyone who has tried to work after a run of poor nights will recognise the idea: you may be there for the full day, but attention is harder to sustain, tasks take longer and your usual efficiency is harder to maintain.
A study used in the modelling helps put that into perspective. Among 7,428 employed health plan subscribers in the United States, Kessler et al. (2011) found that insomnia was associated with the equivalent of 7.8 lost workdays per worker each year through reduced work performance, even after accounting for other health conditions. Most of that loss was not from taking sick leave (Kessler et al., 2011). It came from being less productive on days actually worked.
Absenteeism, or time away from work, accounted for a smaller A$2.2 billion. Deloitte also included reduced employment participation and future earnings lost when people die early. Kessler et al. (2011) did not find a significant association between insomnia and absenteeism in their sample. This result is a useful reminder that sick leave figures alone can miss much of the occupational impact of poor sleep.
The Kessler et al. (2011) result helps explain why presenteeism ended up costing more than three times as much as absenteeism in the Deloitte model.
But does the burden look the same across different sleep disorders?
Which Sleep Disorders Have the Greatest Economic Impact?
Insomnia had the highest estimated overall cost, narrowly ahead of OSA, while RLS also contributed A$13.0 billion (Deloitte Access Economics, 2021).
| Sleep disorder | Estimated cases | Annual economic cost |
|---|---|---|
| Insomnia | 603,000 | A$19.1 billion |
| Obstructive sleep apnoea | 784,000 | A$18.9 billion |
| Restless legs syndrome | 543,000 | A$13.0 billion |
Estimates for Australia, 2019–2020. Source: Deloitte Access Economics (2021).
The ranking of insomnia above OSA is unexpected. OSA affected more people in the model, yet insomnia ended up with a slightly higher total cost. The reason is that economic burden depends on more than how common a condition is.
The model assigned a greater average reduction in health-related quality of life to insomnia than to OSA, based on the research Deloitte selected. Insomnia also accounted for around A$4.5 billion in productivity losses, compared with A$3.9 billion for OSA. OSA, on the other hand, generated higher healthcare costs and more of the modelled burden from associated health conditions.
The comparison shows why prevalence alone doesn't determine economic impact. Day-to-day impairment, healthcare use and associated health consequences all contribute to the overall burden.
But how firm is the A$51 billion estimate?
Why Is the Estimated Cost of Sleep Disorders Conservative?
Deloitte deliberately used fairly restrictive definitions of the three sleep disorders, making its A$51 billion estimate conservative.
Insomnia is a good example. An Australian national survey found that 11.3% of adults met the DSM-5 criteria for insomnia disorder, the diagnostic standard used by clinicians (Adams et al., 2017). Deloitte used a much lower prevalence estimate (the share of the population with the condition) of 3.0%. The 3.0% figure came from research on primary insomnia, meaning insomnia with other potential causes ruled out (Ohayon & Reynolds, 2009).
The same approach was used for OSA. Deloitte's 3.9% prevalence estimate (Peppard et al., 2013) focused on people with moderate to severe OSA plus excessive daytime sleepiness, rather than the wider population meeting broader OSA criteria.
The prevalence choices change the final estimate. Deloitte ran a sensitivity analysis, a test of how much the result changes when an assumption is altered. With prevalence 25% lower and 32% higher than Deloitte's base case, the estimated total cost ranged from A$39.8 billion to A$64.8 billion. In other words, prevalence was the assumption that moved the estimate most.
The broader message is that if we judge sleep disorders only by what is spent treating them, we miss most of their burden. The Australian figures provide a useful indication of how large those less visible costs can become across a population.
What Is The Economic Cost Of Sleep Disorders To New Zealand?
There is no equivalent recent New Zealand study that gives us a reliable national estimate of the economic burden of sleep disorders. But we can illustrate the possible scale by asking what the Australian costs would look like if they represented the same share of New Zealand's economy. On that basis, the equivalent burden would be around NZ$8.3 billion a year.
For this comparison, each Australian cost was expressed as a proportion of Australian nominal GDP and then that same proportion was applied to New Zealand nominal GDP. The Australian model would therefore look like this in New Zealand-dollar terms:
Illustrative New Zealand equivalent of the Australian economic model (NZ$ million)
| Cost category | OSA | Insomnia | RLS | All three |
|---|---|---|---|---|
| Direct healthcare | 57 | 21 | 19 | 97 |
| Healthcare for attributed conditions | 31 | 26 | — | 56 |
| Total healthcare | 88 | 47 | 19 | 154 |
| Absenteeism | 135 | 133 | 94 | 362 |
| Presenteeism | 364 | 532 | 332 | 1,227 |
| Reduced employment | 115 | 56 | — | 170 |
| Premature mortality (productivity) | 24 | 12 | — | 36 |
| Total productivity losses | 637 | 732 | 426 | 1,795 |
| Informal care | 32 | 15 | — | 47 |
| Other accident-related costs | 44 | 54 | — | 97 |
| Deadweight/economic efficiency losses | 90 | 99 | 57 | 246 |
| Wellbeing: sleep disorder itself | 1,322 | 1,699 | 1,612 | 4,632 |
| Wellbeing: attributed conditions | 859 | 462 | — | 1,321 |
| Total lost wellbeing | 2,180 | 2,161 | 1,612 | 5,953 |
| TOTAL ECONOMIC COST | 3,071 | 3,106 | 2,114 | 8,291 |
Method: each Australian cost was divided by Australian nominal GDP (the value of everything the economy produces, before adjusting for inflation) for 2019–2020 (A$1,985.4 billion) and multiplied by New Zealand nominal GDP for the year ended March 2020 (NZ$323.1 billion). This preserves each cost as the same share of GDP and reports the result in New Zealand dollars. Figures are rounded to the nearest NZ$1 million. Sources: Australian Bureau of Statistics (2020); Stats NZ (2021).
How Much of the Cost Is Direct Healthcare?
Applying the same share-of-GDP method to the direct treatment costs gives the following breakdown:
| Cost category | OSA | Insomnia | RLS | All three |
|---|---|---|---|---|
| Hospital care | 16.6 | 2.7 | — | 19.3 |
| Sleep studies | 12.4 | — | — | 12.4 |
| GP consultations | 2.9 | 12.8 | 3.8 | 19.6 |
| Medical referrals | 5.8 | 0.9 | 5.7 | 12.4 |
| Surgical referrals | 0.2 | — | — | 0.2 |
| Allied health referrals | 0.3 | 0.1 | 0.7 | 1.1 |
| Pathology | 0.3 | — | 1.6 | 1.9 |
| Imaging | 0.1 | — | — | 0.1 |
| Prescriptions | — | 4.2 | 7.0 | 11.3 |
| CPAP | 17.4 | — | — | 17.4 |
| Research | 1.4 | 0.3 | — | 1.7 |
| Total direct healthcare | 57.4 | 21.0 | 18.9 | 97.4 |
Illustrative NZ$ million equivalents, using the same share-of-GDP method.
Clinical Comment
What is particularly striking about this research is that insomnia came out as slightly more costly than obstructive sleep apnoea.
That surprised us at The Better Sleep Clinic because, although people with insomnia often focus on its possible long-term health consequences, our reading of the research is that most of the stronger physical health risks people associate with poor sleep are more clearly established for conditions such as obstructive sleep apnoea. We expected OSA to lead to higher costs overall.
What this study brings into focus, then, is something different: the sheer wellbeing cost of living with insomnia over time.
That fits very closely with what we see in clinical practice. People with chronic insomnia are often still working, looking after their families and getting through the day. From the outside, they may appear to be functioning reasonably well. But when you talk to them, it is clear how much of a toll insomnia is taking on their lives and what it is robbing from their sense of wellbeing. They are often more fatigued, less able to concentrate, less able to enjoy things, and more preoccupied with sleep than they would otherwise be.
Because insomnia can persist for months or years, that burden accumulates. It is not necessarily one dramatic consequence. In our experience, most clients with insomnia are in good physical health (especially compared to those with severe OSA). It is the constant, lower-level erosion of quality of life that can become so costly.
We think that is something the general public often underestimates. There tends to be a lot of focus on whether insomnia will lead to major health problems, but the more immediate issue is often much simpler: people suffer from high levels of fatigue and are not able to live their lives in the way they otherwise would.
That economic cost is hidden, but somewhat borne out in the workplace presenteeism cost, which represents the lost productivity when someone operates in a degraded state on a regular basis.
That is why the comparison with obstructive sleep apnoea is so interesting. Obstructive sleep apnoea has clearer downstream medical consequences (note the higher medical treatment costs), while a large part of insomnia's burden appears to come from the experience of living with the condition itself. In this analysis, those wellbeing costs were enormous.
Where To From Here?
Sleep disorders can be easy to overlook because many of their consequences are woven into ordinary life. People keep working, parenting and meeting responsibilities, while feeling and functioning worse than they otherwise would. The Deloitte analysis is useful because it gives those less visible effects a place in the same conversation we already have about physical health, mental health and economic wellbeing.
For someone living with persistent sleep difficulties, the practical question is what is driving the problem and what can be done about it. Chronic insomnia, OSA and RLS are different conditions and require different approaches. A behavioural sleep medicine assessment can clarify the problem, identify factors maintaining insomnia, guide an individualised evidence-based treatment programme, and determine when medical investigation or specialist management is the right next step.
For organisations looking to raise awareness, and begin to address the productivity impact, of sleep disorders talk to us about having a clinical sleep expert talk to your people via our workplace workshops.
Frequently Asked Questions About the Economic Cost of Sleep Disorders
Q1: How much do sleep disorders cost each year?
A1: Insomnia, obstructive sleep apnoea (OSA) and restless legs syndrome (RLS) were estimated to cost Australian society A$51 billion in 2019–2020 (Deloitte Access Economics, 2021). About A$36.6 billion of that total is a dollar value placed on lost health and wellbeing, and about A$14.4 billion is financial costs such as healthcare and lost productivity.
Q2: Is insomnia or sleep apnoea more costly?
A2: Insomnia was estimated to cost slightly more than OSA, at A$19.1 billion compared with A$18.9 billion, while RLS was estimated at A$13.0 billion (Deloitte Access Economics, 2021). Insomnia ranked higher even though fewer people were modelled as having it, because the model assigned insomnia a greater loss of quality of life and A$4.5 billion in productivity losses, compared with A$3.9 billion for OSA. OSA, on the other hand, generated higher healthcare costs.
Q3: How much of the cost of sleep disorders is spent on healthcare?
A3: Healthcare made up only about A$0.9 billion of the A$51 billion total, which is under 2% (Deloitte Access Economics, 2021). Direct care for the sleep disorders themselves accounted for about A$598 million, and another A$346 million went to healthcare for associated conditions and injuries.
Q4: How do sleep disorders affect work?
A4: Sleep disorders were estimated to cost about A$11 billion in lost workplace productivity, and most of it came from presenteeism, meaning reduced performance while at work (A$7.5 billion), rather than absenteeism, meaning time away from work (A$2.2 billion) (Deloitte Access Economics, 2021). In a US study of 7,428 employed health plan subscribers, insomnia was associated with the equivalent of 7.8 lost workdays per worker each year through reduced work performance (Kessler et al., 2011).
Q5: Could the true cost of sleep disorders be higher than A$51 billion?
A5: Yes, because Deloitte deliberately used restrictive definitions of each disorder, which makes its A$51 billion estimate conservative (Deloitte Access Economics, 2021). For insomnia, Deloitte used a prevalence of 3.0% (Ohayon & Reynolds, 2009), while an Australian national survey found that 11.3% of adults met the DSM-5 criteria for insomnia disorder (Adams et al., 2017). For OSA, Deloitte used 3.9%, covering only moderate to severe OSA with excessive daytime sleepiness (Peppard et al., 2013).
Q6: What should someone do if sleep problems are persistent?
A6: A person with persistent sleep difficulties can start with a behavioural sleep medicine assessment, which clarifies what is driving the problem and whether medical investigation or specialist management is the right next step. Chronic insomnia, OSA and RLS are different conditions, so each one needs a different approach
References
Adams, R. J., Appleton, S. L., Taylor, A. W., Gill, T. K., Lang, C., McEvoy, R. D., & Antic, N. A. (2017). Sleep health of Australian adults in 2016: Results of the 2016 Sleep Health Foundation national survey. Sleep Health, 3(1), 35–42.
Australian Bureau of Statistics. (2020, October 30). Australian System of National Accounts, 2019–20 financial year.
Deloitte Access Economics. (2011). Re-awakening Australia: The economic cost of sleep disorders in Australia, 2010. Sleep Health Foundation. https://www.sleephealthfoundation.org.au/special-sleep-reports/reawakening-australia-full-report
Deloitte Access Economics. (2021). Rise and try to shine: The social and economic cost of sleep disorders in Australia. Sleep Health Foundation.
Kessler, R. C., Berglund, P. A., Coulouvrat, C., Hajak, G., Roth, T., Shahly, V., Shillington, A. C., Stephenson, J. J., & Walsh, J. K. (2011). Insomnia and the performance of US workers: Results from the America Insomnia Survey. Sleep, 34(9), 1161–1171.
Ohayon, M. M., & Reynolds, C. F., III. (2009). Epidemiological and clinical relevance of insomnia diagnosis algorithms according to the DSM-IV and the International Classification of Sleep Disorders (ICSD). Sleep Medicine, 10(9), 952–960.
Peppard, P. E., Young, T., Barnet, J. H., Palta, M., Hagen, E. W., & Hla, K. M. (2013). Increased prevalence of sleep-disordered breathing in adults. American Journal of Epidemiology, 177(9), 1006–1014.
Stats NZ. (2021, March 25). Regional gross domestic product: Year ended March 2020.
Written By Dan Ford, DBSM, Sleep Psychologist
Published By The Better Sleep Clinic
