An improved understanding of the costs of diseases is obtained by conducting a case study of the costs associated with end stage renal disease (ESRD). In estimating the costs of ESRD, the costs incurred by both patients and their primary unpaid caregivers are calculated. Most economic studies of the costs of diseases ignore either the patients’ or unpaid caregiver side, focusing on one or the other. From a theoretical standpoint, it is shown unpaid caregiving lowers the costs of diseases to society. Unpaid caregiver lowers the cost, because for unpaid caregiving to occur, the net benefits of unpaid caregiving must be lower than the net benefits of hiring a paid caregiver. Using patients and their primary caregivers at the Gambro Dialysis Center in College Station, Texas as a case study, estimated total ESRD costs range from $84,000 to $121,000 / year / case. The distribution of these costs is positively skewed. Of the total costs, approximately 2% to 25% can be attributed to unpaid caregiving. Excluding direct medical costs in total ESRD costs, unpaid caregiving is 14% to 65% of total ESRD costs. Consideration of unpaid caregiving costs is, therefore, an important component of the costs of diseases. These estimates are conservative as the costs associated with lifestyle changes and health effects are noted, but no monetary value is placed on them. Results also indicate the patients’ and caregivers’ perception of the quantity of caregiving varies. An alternative water supply system to improve the efficiency of water supply systems taking into account water pricing, marketing, and treatment costs is proposed. This system treats and supplies water differently depending on the source of the water and if the end-use of the water is a potable or non-potable use, then may reduce treatment costs. Decreased treatment costs may make more stringent water standards more affordable. More stringent water standards may cause a decrease in the risk of water-related diseases including ESRD induced by water-borne toxins. Reducing the risk of ESRD will reduce society’s costs associated with chronic illnesses. Possible benefits and costs of the proposed system are discussed, but not calculated.