Study estimates October 7 post-traumatic stress disorder cases will cost Israel more than $50 billion over the next five years – eJewishPhilanthropy

The rise in post-traumatic stress disorder resulting from the October 7 massacres and ongoing fighting in Gaza and on Israel's northern border is estimated to cost the Israeli economy more than $50 billion over the next five years, according to a new study. That figure is based on the impact on productivity, health care and social services costs, and the associated costs of related problems such as addiction.

The study was conducted by the Social Finance Israel Group and the psychedelics research group MAPS Israel as part of the latter's HealingOct7 initiative, which aims to use psychedelic-assisted therapies for survivors of the Hamas attacks. The economic analysis was based on models used in other countries, but has never been done before in Israel.

“The aim is to shift the discussion from a moral to an economic one,” said Yaron Neudorfer, CEO and founder of the SFI Group, eJewishPhilanthropy.

“The number is so large that it encourages everyone to look for new ways to treat PTSD symptoms,” says Neudorfer, whose organization seeks to address societal problems with financial resources.

For MAPS Israel, which advocates the use of various psychedelic substances and related treatments to treat PTSD — particularly 3,4-methylenedioxymethamphetamine, or MDMA — this study is intended to encourage Israel's Health Ministry to accept and fund its treatments, which new research suggests are more effective than most current treatments for PTSD. (While early studies show promising results for psychedelic treatments, advocates of the therapy suffered a significant setback this week when the U.S. Food and Drug Administration determined that evidence was insufficient at this time to approve MDMA-assisted therapies for wider use and called for more research.)

Despite this setback internationally, MAPS Israel and its HealingOct7 are making progress in Israel. Several studies have reached the final stages of approval by the Ministry of Health after receiving the green light this week from the ethics committees of the hospitals where they will be conducted. Through MAPS Israel, MDMA-assisted therapies are being tested at the Sheba Medical Center outside Tel Aviv, the Emek Medical Center in Afula, the Beersheva Mental Health Centers, the Lev Hasharon Mental Health Center and the Be'er Yaakov Mental Health Center. Hundreds of survivors of the October 7 attacks are expected to receive MDMA-assisted therapy as part of the studies.

Eyal Gura, one of the founders of HealingOct7, said the group hopes for now that the strength of this research, coupled with the urgency demonstrated by the economic study with the SFI Group, will encourage the Ministry of Health to approve MDMA-assisted therapy for wider use and include it in the “basket” of services covered by statutory health insurance.

“We have just started these trials in different hospitals, creating the infrastructure for this, and hopefully it will be included in the 'health basket,'” Gura told eJP.

If for some reason that doesn't happen, HealingOct7 and SFI Group could use the results of this economic study to create a “social impact bond” to cover the cost of PTSD treatment, Gura said. It's an investment vehicle in which donors fund solutions to problems and receive a return on the money saved by the government. “But that will take years,” Gura said.

The study estimates that the total cost for a person diagnosed with PTSD ranges from NIS 1.8 to 2.2 million (US$485,000 – 594,000), depending on the extent to which the illness is recognized by the state and the available benefits.

This amount comes from three main sources, with the most significant source being the “direct impact on employment and productivity,” which accounts for 74 percent of the estimated costs. Rising health care spending and additional National Insurance Institute benefits account for 18 percent of the additional cost to the economy, and the increased risk of comorbid mental disorders and addictions accounts for 8 percent, the study said.

The burden of these costs is also distributed among three groups: the individual and his family bear 30 percent of it, the state also bears 30 percent in the form of falling tax revenues and rising public spending, and the economy as a whole bears the largest share of the “decline in labor productivity at the national level” at 40 percent, according to the researchers.

For this economic study, the SFI Group estimated that the number of people suffering from PTSD will be in the hundreds of thousands, based on research from the Hebrew University of Jerusalem, Columbia University, the Shalvata Mental Health Center in Hod Hasharon, and the organization Effective Altruism. Other researchers have questioned this estimate, saying it is too high. Some believe that the number of PTSD cases as a result of October 7 is in the tens of thousands, not the hundreds of thousands.

Achinoam Zigel, director of economic analysis and research at SFI Group, which led the study, said her team chose a “middle number” for the estimate based on available research, and acknowledged that these were only approximations. “We will only know [the exact number] in retrospect,” she told eJP.

Even if the number of PTSD cases is at the lower end of the estimate, the cost to the Israeli economy would be several billion dollars.

Neudorfer said his organization has only just begun to disseminate the study's results, which were first presented at a conference in Tel Aviv organized by MAPS Israel late last month. Zigel said the SFI Group is working with MAPS Israel to also publish the economic study's results in academic journals.

Neudorfer assumes that the Israeli ministries have already learned about the study through coverage in the Israeli press. However, the SFI Group also intends to present its results directly to the relevant authorities, namely the Ministry of Health and the Ministry of Finance. “They must take them into account when preparing the budget for next year,” he said.

However, Neudorfer said the study is also relevant for charities and nonprofits looking for ways to help Israel after Oct. 7.

“You have to be aware of the burden,” he said. “So much money flowed to Israel [after the attacks]and there was a lack of coordination.”

Neudorfer stressed that “innovative solutions” are needed to solve the problem. “The current system cannot withstand the pressure of so many new victims and so many traumatized civilians,” he said.