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The Economic Cost of Sleep Problems

By: Jennie Kermode - Updated: 21 Feb 2011 | comments*Discuss
Insomnia Economic Cost Business Industry

Insomnia can cause considerable problems to individuals, but what about its effect on the economy as a whole? With around one in three adults in the UK suffering from insomnia at some time in any given year, and two in three regularly failing to get a good night's sleep, the impact on business can be considerable. Over two billion pounds a year is lost to industry due to time off, much of which is related to insomnia, and there are many other hidden costs to the country as a whole.

Lost Hours

In assessing the hours lost to business due to insomnia it's important to take into account not only poor sleep itself but also the other heath problems it can trigger. A good way to sort out cause and effect is to look at patterns of lost work time. Whilst hangovers play a significant role in 'sick days' at the end of the working week, insomniacs are most likely to have problems on Mondays as work-related stress makes sleeping on Sunday nights especially difficult.

Poor Performance

Alongside lost hours, there are other ways in which businesses suffer when workers have insomnia. The cost of this is difficult to measure but it is a particular problem for small businesses where it's harder for somebody else to fill in when a key staff member is affected, and it is thought to be one of the reasons why a high proportion of small businesses go bust within two years of starting up.

A recent British study has shown that people with insomnia are three times more likely to struggle to get things done at work than their peers. Over ninety percent struggle to find the energy to get through the day. As insomnia increases the risk of depression and anxiety, stressful work tasks are particularly likely to be neglected or handled poorly.

Disability Benefits

Although disability benefits are rarely awarded for insomnia alone, it's a factor in many awards and it can trigger other disabling conditions that result in people needing state support. In cases of chronic insomnia it can actually be more cost effective to declare people unable to work than to provide them with ongoing job search assistance if they are unlikely to find jobs they can successfully get or hold onto.

Because insomnia is often a short term problem, benefits of this sort are only awarded where doctors think the problems are likely to persist. This means that individuals often have to bear the costs of not working by themselves, though there is also a cost to the wider economy if they are unable to pay tax as a result.

Insomnia and the NHS

What is the cost of treating insomnia on the NHS? The cost of drug treatments varies year by year but averages around ten million pounds annually, quite a small amount of money considering the number of people helped by such medicine. Behavioural therapies are more expensive, at around £180 per week for each patient.

To work out how cost effective these procedures are, the NHS measures them against improvement in quality of life over the years to follow. This puts both types of treatment well within what the NHS considers reasonable. Although treating insomnia can be expensive, it in turn benefits the economy by ensuring that people's ability to work improves, and of course it relieves individual distress.

Self-medication can also be expensive, with less positive consequences. In the UK alone, over two billion pounds per year is estimated to be spent on alcohol used for the purposes of trying to get to sleep, which in turn is a significant contributor to health problems.

Economic Causes of Insomnia

Just to complicated things further, economic problems can cause insomnia. One study has shown that over ninety percent of Americans suffered from insomnia, at least in the short term, in the immediate aftermath of the banking crisis of 2007. This would seem to be primarily a result of emotional stress and worry, although in some cases having to work extra hours will have disrupted healthy sleep routines.

The good news is that whilst there are always more people suffering from insomnia during tough economic times, things do tend to settle down as time passes after the start of an economic crisis. This suggests that individuals are able to adjust, employers are able to find ways of working around difficulties, and people are able to come together to get things working again.

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