Objective. To provide estimates of the total medical care expenditures and earnings losses associated with arthritis and other rheumatic conditions (AORC), as well as the increment in such costs specifically attributable to these conditions, in the US in 1997.Methods. The estimates were derived from the 1997 Medical Expenditures Panel Survey (MEPS), a national probability sample of 14,147 households including 34,551 persons, of whom 4,776 self-reported arthritis. After weighting, those who self-reported AORC represent 38.4 million persons. We tabulated all medical care expenditures of the adult MEPS respondents, stratified by arthritis and comorbidity status, and then used regression techniques to estimate the increment in health care expenditures attributable to AORC, after taking comorbidity, demographic characteristics, and insurance status into account. Using the same methods, we also estimated the magnitude of the earnings losses sustained by persons of working ages (18-64 years) who had AORC.Results. Persons with AORC incurred mean total medical care expenditures of $4,865 (total $186.9 billion). The largest components of these expenditures were inpatient care (39%), ambulatory care (29%), and prescriptions (14%). The mean increment in medical care expenditures specifically attributable to AORC among those ages 18 years and older was $1,391 (total ϳ$51.1 billion). Persons with AORC ages 18-64 years earned $3,812 less on average than did other persons of these ages (total $82.4 billion). Of this average, $1,579 was attributable to the AORC (total $35.1 billion).Conclusion. In 1997, persons with AORC incurred direct and indirect costs of $269.3 billion, of which $86.2 billion was attributable to these conditions. Information about the economic impact of illness has become central to health policy debates, affecting the allocation of research funding among conditions and the choice of therapies for specific conditions. Because of the growing importance of cost of illness studies in health policy, the literature concerning the cost of all forms of musculoskeletal conditions for the US as a whole (1-8) and for other nations (9-13), as well as the cost of specific musculoskeletal conditions, including various forms of arthritis and other rheumatic conditions (AORC) (14-37), has been expanding rapidly.In general, the studies of the economic impact of all forms of musculoskeletal conditions have been derived from population-based surveys, but not directly observed individual-level medical care expenditures or employment status and earnings. In contrast, studies that have tracked the actual costs or expenditures for individuals have used clinical-based samples and are, thus, not representative of the general population. In the present study, we used the results of the Medical Expen-