The increased levels of post-traumatic stress disorder resulting from the Oct. 7 massacres and the ongoing fighting in Gaza and on Israel’s northern border is estimated to cost the Israeli economy over $50 billion over the next five years, according to a new study, which bases this figure on the impact on productivity, health-care costs and welfare benefits and the associated costs of related issues, 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 supports research into the use of psychedelic-assisted therapies for survivors of the Hamas attacks. The economic analysis was based on models used in other countries but has never before been performed in Israel.

“It is meant to change the discussion from a moral one to an economic one,” Yaron Neudorfer, CEO and founder of SFI Group, told eJewishPhilanthropy.

“The number is so huge that it encourages everybody to find new ways to treat PTSD symptoms,” said Neudorfer, whose organization looks to use financial tools to address societal issues.

For MAPS Israel, which supports research into the safety and efficacy of different psychedelic compounds and related treatment methods to address PTSD — notably 3,4-Methylenedioxymethamphetamine, or MDMA — this study is meant to raise awareness about the need to develop treatments for PTSD, including psychedelic-assisted therapies, which emerging research indicates are more effective than most current options for PTSD. (While early studies show great promise for psychedelic treatments, advocates for the therapy experienced a significant setback this week when the U.S. Food and Drug Administration determined that the evidence was insufficient at this stage to approve MDMA-assisted therapy for wider use and requested further research.)

Despite this setback on the international level, MAPS Israel and its HealingOct7 are pressing ahead in Israel, with multiple studies reaching the final stages of approval by the Health Ministry after receiving the go-ahead this week from the ethics committees of the hospitals where they will be taking place. Through MAPS Israel, MDMA-assisted therapies will be tested in Sheba Medical Center outside of Tel Aviv, Afula’s Emek Medical Center, the Beersheva Mental Health Centers, Lev Hasharon Mental Health Center and Be’er Yaakov Mental Health Center. Hundreds of survivors of the Oct. 7 attacks are expected to undergo MDMA-assisted therapy through the studies.

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

“We’ve just started laying the infrastructure for this with these studies at different hospitals, and hopefully, it will be added to the ‘health basket,’” Gura told eJP.

If that doesn’t happen for whatever reason, Gura said that HealingOct7 and SFI Group could use the findings of this economic study create a “social impact bond” in order to cover the costs of PTSD treatment, referring to an investment vehicle in which backers fund solutions to problems and get a return on their investments from the money saved by the government. “But that’s years down the line,” Gura said.

The study estimates the total costs associated with a person diagnosed with PTSD to range between NIS 1.8 million-NIS 2.2 million ($485,000-$594,000), depending on the degree to which they are recognized by the state and receive the available benefits.

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

The burden of these costs is also split between three groups: the individual and their family, who shoulder 30% of them; the state, which also bears 30% from a decrease in tax revenues and an increase in public spending; and the overall economy has the largest share, 40%, for the “decrease in labor productivity at the national level,” according to the researchers.

For the purposes of this economic study, SFI Group estimated that the number of people who will suffer from PTSD will be in the hundreds of thousands, based on research by Hebrew University of Jerusalem, Columbia University, Shalvata Mental Health Center in Hod Hasharon and the Effective Altruism organization. Other researchers have questioned this estimate, believing it to be too high, with some putting the number of PTSD cases as a result of Oct. 7 in the tens of thousands, not hundreds of thousands.

Achinoam Zigel, the director of economic analysis and research at SFI Group, who led the study, said her team picked a “middle number” for the estimate based on the available research and acknowledged that these are only approximations. “We’ll only know [the exact number] after the fact,” she told eJP.

Even if the number of PTSD cases is on the lower end of the estimate, the cost to the Israeli economy would be in the billions of dollars.

Neudorfer said his organization has only just begun circulating the study’s findings. It was first presented at the end of last month at a conference in Tel Aviv organized by MAPS Israel, Zigel said SFI Group was working with MAPS Israel to get the findings of the economic study published in academic journals as well.

Neudorfer said he expects Israeli government ministries to have already learned of the study through the coverage that it has received in the Israeli press, but SFI Group also intends to present its findings directly to the relevant offices, namely the Health Ministry and Finance Ministry. “They must consider it when they prepare the next year’s budget,” he said.

However, Neudorfer said the study is also relevant for philanthropies and nonprofits as they look for ways to assist Israel after Oct. 7.

“They need to be aware of the burden,” he said. “So much money flowed into Israel [after the attacks], and you didn’t have coordination.”

Neudorfer stressed the need for “innovative solutions” to the problem. “The current system cannot hold the pressure of so many new victims, of so many civilians being exposed to trauma,” he said.