The economic burden of PTSD in veterans: Why cost of illness studies matter

Post-Traumatic Stress Disorder (PTSD) is a debilitating condition that affects a significant proportion of Australian veterans. While its clinical symptoms are well documented, the broader economic impact on individuals, families, and society is often underplayed. We believe that cost of illness studies are essential tools for understanding the full scope of this burden and guiding effective policy and investment.

Why cost of illness studies matter

Cost of illness studies quantify the economic impact of diseases by capturing direct, indirect, and intangible costs. Unlike cost-benefit analyses, which evaluate the value of specific interventions, cost of illness studies provide a baseline understanding of the financial toll of a condition. This is particularly important for PTSD, where the costs extend far beyond healthcare to include lost productivity, unpaid caregiving, and diminished quality of life.

These studies play a crucial role in informing resource allocation within health and social services, supporting advocacy efforts for enhanced funding and necessary policy reforms. They effectively highlight areas of unmet need and expose systemic inefficiencies, while also establishing benchmarks for evaluating the effectiveness of future interventions.

BDO’s contribution: A comprehensive estimate for 2025

BDO’s recent analysis estimates the annual cost of PTSD per veteran in Australia at $112,172 in 2025. This includes:

• Direct costs: healthcare services and suicide-related costs
• Indirect costs: unpaid work by carers and productivity losses
• Intangible costs: reduced quality of life, measured using Quality-Adjusted Life Years (QALYs).

This breakdown reveals that intangible costs account for 57 per cent of the total burden, underscoring the profound personal and societal impact of PTSD and the need to look beyond the healthcare sector to appreciate the real costs of illness.

The annual cost of PTSD per veteran in Australia

What did we discover?

While previous studies have highlighted the significant cost of healthcare associated with PTSD, particularly in comparison to other psychiatric disorders, few have provided a comprehensive, per-case estimate that includes indirect and intangible costs in the context of Australian veterans.

• The Phoenix Australia Guidelines note that PTSD results in the highest levels of partial disability among mental health conditions and incurs significantly higher healthcare costs than depression or bipolar disorder.
• International studies, such as those from the U.S. Department of Veterans Affairs, estimate the national economic burden of PTSD at over $230 billion for 2018, but often lack granular, per-case data.

In Australia, most economic evaluations have focused on treatment cost-effectiveness rather than the baseline cost of illness, leaving a gap in understanding the full societal impact.

BDO's study fills the gap by providing a holistic, annually updated estimate that can inform funding decisions, program design, and strategic planning.

 

Implications for policy and practice

The findings highlight the urgent need for:

• Integrated mental health services tailored to veterans
• Support systems for carers, whose unpaid contributions are substantial
• Preventive strategies to reduce the incidence and severity of PTSD.

Moreover, the dominance of intangible costs suggests that improving quality of life, not just symptom reduction, should be a central goal of any intervention.

Shaping better outcomes

Cost of illness studies like BDO’s provide a critical foundation for understanding the true burden of conditions like PTSD. By quantifying the economic cost across multiple dimensions, they empower stakeholders to make informed decisions that improve outcomes for veterans and society as a whole.

How BDO can help?

Our economics team brings deep expertise in public health systems and projects, combined with extensive experience in stakeholder engagement. We apply proven economic assessment methods to help you make informed, evidence-based decisions.

We specialise in cost of illness studies, cost-benefit and cost-effectiveness analysis, economic impact assessments, and qualitative benefit evaluations.

Whether you need a feasibility assessment, business case development, or program evaluation, we can provide the insights and frameworks to guide your next steps. Contact us to discover how we can help deliver value for your project.