Methods Used by The Center for Integrated Behavioral Health Policy to Calculate Public Sector Costs of Substance Use Problems
Substance use problems are among the most common and costly health conditions affecting Americans: over 21 million adults meet the diagnostic criteria for alcohol abuse or dependence, illicit drug abuse or dependence, or prescription pain medication abuse or dependence.1 Yet, despite widespread public awareness of its scope of substance use problems in U.S. society, research shows that business leaders and policymakers remain largely in the dark about its heavy economic costs. Many policymakers have not examined the costs of undetected and untreated substance use problems on their bottom lines.
To help sharpen understanding of the cost of substance use problems in the public sector, The Center for Integrated Behavioral Health Policy, a research center based at The George Washington University Medical Center, devised a calculator that illustrates the degree to which substance use disorders generate avoidable health care costs and are linked to additional social problems. The Substance Use Disorder Cost Calculator provides concrete information, grounded in research, about the impact of substance abuse and dependence on public sector populations. The Substance Use Disorder Cost Calculator, first released for public use in November, 2009, estimates the public sector impact of the continuum of substance use problems — categorized here as alcohol abuse or dependence, or illicit drug abuse or dependence, which includes prescription pain medication abuse or dependence. Specifically, it shows:
- how common substance use problems are in the public sector
- hospital and emergency room use that is attributable to substance use disorders
- the costs of excess health care costs
- rates of increased risk for social problems experienced by individuals with substance use disorders
This document describes in detail the methods that The Center for Integrated Behavioral Health Policy uses to derive these estimates.
Acronyms
- BLS Bureau of Labor Statistics
- NCQA National Committee on Quality Assurance
- NHSDA National Household Survey on Drug Abuse
- NSDUH National Survey on Drug Use and Health (Replaced NHSDA beginning with the 2002 survey)
- SAMHSA Substance Abuse and Mental Health Services Administration
- NIAAA National Institute on Alcohol Abuse and Alcoholism
Methods
Sources of Data
The Center for Integrated Behavioral Health Policy draws upon a large government-sponsored epidemiological surveys, the National Survey on Drug Use and Health 2 (NSDUH), to create a calculator that can provide estimates of the prevalence of substance use-related problems among adults in the public sector- defined here as adults that currently received health insurance though the Medicaid program, or are uninsured. The Substance Abuse and Mental Health Services Administration (SAMHSA) of the Department of Health and Human Services conducts the NSDUH annually. The survey generates detailed estimates of the prevalence, symptoms, and consequences of alcohol problems, prescription pain problems, and illicit drug problems in the civilian, non-institutionalized U.S. population. The NSDUH uses a representative national sample, surveying people in all 50 states and the District of Columbia. Since 1999, approximately 70,000 persons age 12 and older residing in households respond each year to questions for the annual NSDUH. SAMHSA produces publicly available data annually based on a representative subgroup of about 57,000 of the NSDUH respondents. For The Substance Use Disorder Cost Calculator, The Center for Integrated Behavioral Health Policy analyzed the pooled 2004 -2006 NSDUH data. A total of 166,786 individuals were represented in this dataset. All respondents who met the following criteria were included in our analyses:
- 18 years old or older
- Reported being covered through the Medicaid program or having no health insurance
Based on these criteria, a total of 38,526 individuals were included in analyses presented in the “public sector track” section of the calculator. A total of 128,260 were excluded because they were adolescents, or had health insurance other than Medicaid at the time of the interview.
The Center for Integrated Behavioral Health Policy used SPSS statistical software, version 15.0 (SPSS Inc., Chicago, IL) as the primary software to analyze the NSDUH. Additional analyses were conducted with the Survey Documentation and Analysis (SDA, version 3.0)3 computer program. The computer-assisted Survey Methods Program at the University of California, Berkeley developed and maintains the SDA. The data and SDA are part of the Substance Abuse and Mental Health Data Archive maintained by the Inter-University Consortium for Political and Social Research at the University of Michigan.
Adjustments
The Center for Integrated Behavioral Health Policy computed state-level adjustments to reflect the substantial differences in substance use patterns from state to state. SAMHSA published state estimates of alcohol dependence and abuse and illicit drug dependence and abuse for 2005 and 2006 from the NSDUH for the general population.4 No state estimates were available for prescription pain medication abuse or dependence, and given the relatively low prevalence of this problem in public sector populations no adjustments by state were performed. The state rates published by SAMHSA were used to calculate adjustment factors by dividing the rates reported in each state, by the national prevalence reported by SAMHSA during the 2004-2005 time period. For example, the adult alcohol abuse and dependence adjustment factor for the District of Columbia was calculated by dividing the state-specific rate of alcohol abuse and dependence for adults 18 and older by the national adult prevalence during that same time period for an alcohol adjustment factor of 1.33, suggesting that adults living in the District of Columbia have a higher than average rate of alcohol problems than the general US population. These adjustment factors were then applied to public sector-specific prevalence rates calculated with the 2004-2006 NSDUH data in order to more accurately reflect differences in substance abuse and dependence rates among individuals in each state.
Prevalence of Substance Abuse or Substance Dependence
The NSDUH is constructed so that alcohol and other drug diagnoses can be derived from survey questions.5 Analyses show that 5.3 percent of public sector adults have an alcohol dependence disorder, and 5.5 percent meet the diagnostic criteria for alcohol abuse. A total of 10.8 percent of adults with Medicaid or no insurance have an alcohol use disorder.
Among adults in the public sector, 4.1 percent meet the diagnostic criteria for dependence on illicit drugs, while another 1.4 percent met the criteria for illicit drug abuse. A total of 5.5 percent of public sector adults has an illicit drug disorder.
Among adults in the public sector, .9 percent meet the diagnostic criteria for prescription pain medication dependence, and another .3 percent meet the criteria for prescription pain medication abuse.
A total of 1.2 percent of public sector adults has a prescription pain medication use disorder.
A total of 13.9 percent of public sector adults meet the diagnostic criteria for abuse or dependence on alcohol, illicit drugs, or prescription pain medication.
Rates of Health Care Use
NSDUH respondents were asked how many times they had gone to a hospital emergency room in the previous 12 months, whether they had been hospitalized overnight during the previous year, and the number of nights in the hospital if they had been admitted. Mean number of emergency department visits and days in hospital are stratified and compared by substance use disorder.
Cost of Health Care Estimates
The Center for Integrated Behavioral Health Policy calculates the health care costs of substance-related problems from two sources. A per capita health care cost is derived from estimates of the economic costs of alcohol and illicit drug problems in the United States.6 In order to update these figures to reflect more current costs, these figures were adjusted to 2008 estimates using similar methodology as the original reports. In order to estimate the total economic costs for these two issues, the total costs for alcohol were added to the total costs for illicit drugs, and then discounted by a factor of 12% to reflect the estimated overlap in costs between these sets of conditions in the general population.
From its detailed analyses of the social costs of substance use problems, The Center for Integrated Behavioral Health Policy extracts the following yearly direct health care costs related to alcohol and illicit drug use:
| Treatment | Yearly Cost |
|---|---|
| Treatment Costs | $15.3 billion |
| Prevention and Early Intervention | $1.7 billion |
| Treatment of Medical Consequences of Alcohol and Illicit Drug Consumption | $36.5 billion |
| Medical Consequences of Fetal Alcohol Syndrome (Alcohol Only, Illicit Drug Estimate not Available) | $5.6 billion |
| Insurance Administration | $ 2.2 billion |
| Total: | $ 61.3 billion |
The total health care costs in 2008 are divided by the projected total U.S. population in 2008 7 to yield a per capita cost of $200.
In addition, The Substance Use Disorder Cost Calculator estimates the costs of excess health care use. The estimated costs of extra hospital and emergency room use by persons with substance problems are computed by deriving the extra per capita rate of hospital and emergency room use for people with substance problems, and then multiplying the per capita rates by the state-specific substance problem prevalence rates. The resulting number of extra hospital days and emergency room visits are then multiplied by the Healthcare Utilization Cost and Utilization Project estimates of average emergency room costs and daily hospital charges for patients with Medicaid health insurance.8
Additional Costs
Substance misuse is associated with a number of hazardous and costly social consequences including driving under the influence of alcohol or drugs, getting arrested, displaying violent behavior, and many others. The Substance Use Disorder Cost Calculator illustrates the social costs of problem substance use by comparing prevalence rates for individuals with a substance use disorder to those without a substance use disorder. Prevalence rates are calculated as the percentage of respondents who had experienced an event or problem within a given time period prior to the survey (usually 12 months). The difference in prevalence rates by substance use disorder can then be applied to the number of individuals with a substance use problem to derive the increase or excess that is attributed to substance misuse.
Results
Prevalence of Substance Problems by State
Adults who are covered through Medicaid or have no health insurance, are more likely to meet the diagnostic criteria for having a substance use disorder than the general population. 9 Male adults who received Medicaid or have no insurance are more likely to have a substance use disorder than females. 10 Public sector adults with a substance use disorder also tend to be younger than the general public sector population. 11
The Calculator estimates state-specific prevalence rates for substance use disorders as outlined below.
| State | Alcohol Problems (%) | Illicit Drug Problems (%) | Prescription Pain Medication Problems (%) |
Alcohol, Illicit Drug, or Prescription Pain Medication Problem (%) |
|---|---|---|---|---|
| Alabama | 9.1% | 5.6% | 11.7% | |
| Alaska | 10.9% | 6.4% | 14.0% | |
| Arizona | 11.6% | 5.2% | 14.9% | |
| Arkansas | 10.9% | 6.1% | 14.0% | |
| California | 11.8% | 5.7% | 15.2% | |
| Colorado | 12.7% | 6.2% | 16.4% | |
| Connecticut | 12.0% | 6.0% | 15.4% | |
| Delaware | 9.4% | 6.1% | 12.1% | |
| District of Columbia | 14.4% | 9.0% | 18.5% | |
| Florida | 10.6% | 5.6% | 13.6% | |
| Georgia | 9.6% | 5.7% | 12.4% | |
| Hawaii | 10.0% | 4.6% | 12.9% | |
| Idaho | 11.2% | 5.7% | 14.5% | |
| Illinois | 10.8% | 5.6% | 13.9% | |
| Indiana | 10.9% | 5.5% | 14.0% | |
| Iowa | 12.4% | 4.0% | 16.0% | |
| Kansas | 11.7% | 5.5% | 15.0% | |
| Kentucky | 8.6% | 4.8% | 11.1% | |
| Louisiana | 10.4% | 5.6% | 13.3% | |
| Maine | 10.4% | 5.7% | 13.3% | |
| Maryland | 9.7% | 5.1% | 12.5% | |
| Massachusetts | 11.7% | 5.6% | 15.0% | |
| Michigan | 11.9% | 5.7% | 15.3% | |
| Minnesota | 13.0% | 5.0% | 16.7% | |
| Mississippi | 9.2% | 6.2% | 11.8% | |
| Missouri | 12.3% | 5.2% | 15.8% | |
| Montana | 14.7% | 5.8% | 18.9% | |
| Nebraska | 13.6% | 4.6% | 17.5% | |
| Nevada | 11.3% | 5.1% | 14.6% | |
| New Hampshire | 11.4% | 5.2% | 14.7% | |
| New Jersey | 8.7% | 4.3% | 11.3% | |
| New Mexico | 11.4% | 5.0% | 14.7% | |
| New York | 9.8% | 6.3% | 12.6% | |
| North Carolina | 9.3% | 5.9% | 12.0% | |
| North Dakota | 13.1% | 4.3% | 16.8% | |
| Ohio | 11.0% | 5.7% | 14.2% | |
| Oklahoma | 10.5% | 5.3% | 13.5% | |
| Oregon | 9.3% | 4.9% | 12.0% | |
| Pennsylvania | 9.5% | 4.8% | 12.2% | |
| Rhode Island | 12.3% | 7.3% | 15.8% | |
| South Carolina | 10.4% | 5.8% | 13.3% | |
| South Dakota | 14.1% | 4.3% | 18.2% | |
| Tennessee | 9.5% | 5.9% | 12.2% | |
| Texas | 11.4% | 5.4% | 14.7% | |
| Utah | 10.6% | 5.9% | 13.6% | |
| Vermont | 12.3% | 6.1% | 15.8% | |
| Virginia | 10.0% | 4.8% | 12.9% | |
| Washington | 11.0% | 5.7% | 14.2% | |
| West Virginia | 8.9% | 5.6% | 11.4% | |
| Wisconsin | 12.0% | 4.7% | 15.4% | |
| Wyoming | 12.9% | 5.4% | 16.5% | |
| Total US | 10.8% | 5.5% | 1.2% | 13.9% |
State-specific estimates of the number of individuals who have a substance use disorder are computed by multiplying the NSDUH prevalence rates of substance use problems by its adjustment factor.
Example: For 1000 public sector adults in the District of Columbia, the Calculator calculates alcohol problems by multiplying the overall public sector prevalence rate for alcohol problems (10.8 percent) by the District of Columbia alcohol adjustment factor previously calculated (1.33) to derive an estimate of 144 individuals with an alcohol disorder in the District of Columbia. Using this same methodology, the Calculator will also estimate 89 individuals with an illicit drug disorder, 12 individuals with a prescription pain medication problem, and 185 individuals with any of these problems.
Health Care Utilization
Hospital use:
Estimates of the number of excess hospital nights attributable to substance use problems are computed by multiplying the percentage of persons with substance abuse problems who reported any overnight hospital stay by the average number of nights for those who spent at least one night. The average per capita hospital use rate for adults with no substance abuse problems is then calculated in the same way and subtracted from the rates for adults with substance abuse problems.
Example: To continue the example of 1000 public sector adults in the District of Columbia, the number of hospital days for persons with a substance use disorder (5.6 days) is multiplied by the percentage who reported an overnight stay in the hospital (13.6 percent) to generate rates of hospital days per person with a substance use problem. The number of expected hospital days in this population without a substance abuse problem is then calculated by multiplying the percentage of those without a substance use problem reporting an overnight stay in the hospital (13.3 percent) with the average number of nights (5.5 nights) spent by patients who were hospitalized. This rate of hospital days for persons with no substance use problem is subtracted from the rates for substance use disorders. The difference is multiplied by the number of people with substance use disorders in the workforce to generate the estimate of the number of excess hospital days. The resulting estimate is 4 excess hospital days attributable to individuals with a substance use disorder.
Emergency room use: Individuals with substance use disorders reported greater emergency service use in the past year than individuals without substance abuse disorders (1.06 ER visits per individual with a substance use disorder versus .83 visits per individual without a substance use disorder). Perhaps one reason for this higher use of emergency rooms is that individuals with substance use disorders are much more likely to drive while under the influence of alcohol or drugs. Over half of public sector adults with a substance abuse disorder (57%) report driving under the influence of alcohol or drugs during the past year, compared to 11% of individuals without a substance use disorder.
Estimates of the number of excess emergency room visits are computed by subtracting the average number of emergency room visits for persons without a substance use disorder from the average number for persons with a substance use disorder. This number, which reflects the average excess number of visits attributable to individuals with substance use disorders, is then multiplied by the estimated number of individuals with a substance use disorder. The average number of emergency room visits are generated by state.
Example: Following the procedure outlined above,1000 public sector adults in the District of Columbia are responsible for an additional 43 emergency room visits per year, at a cost of over $51,000.
| State | Excess ER Visits- | Cost of Excess ER Visits |
|---|---|---|
| Alabama | 27 | $32,400 |
| Alaska | 32 | $38,769 |
| Arizona | 34 | $41,261 |
| Arkansas | 32 | $38,769 |
| California | 35 | $42,092 |
| Colorado | 38 | $45,415 |
| Connecticut | 35 | $42,646 |
| Delaware | 28 | $33,507 |
| District of Columbia | 43 | $51,230 |
| Florida | 31 | $37,661 |
| Georgia | 29 | $34,338 |
| Hawaii | 30 | $35,723 |
| Idaho | 33 | $40,153 |
| Illinois | 32 | $38,492 |
| Indiana | 32 | $38,769 |
| Iowa | 37 | $44,307 |
| Kansas | 35 | $41,538 |
| Kentucky | 26 | $30,738 |
| Louisiana | 31 | $36,830 |
| Maine | 31 | $36,830 |
| Maryland | 29 | $34,615 |
| Massachusetts | 35 | $41,538 |
| Michigan | 35 | $42,369 |
| Minnesota | 38 | $46,246 |
| Mississippi | 27 | $32,677 |
| Missouri | 36 | $43,753 |
| Montana | 43 | $52,338 |
| Nebraska | 40 | $48,461 |
| Nevada | 34 | $40,430 |
| New Hampshire | 34 | $40,707 |
| New Jersey | 26 | $31,292 |
| New Mexico | 34 | $40,707 |
| New York | 29 | $34,892 |
| North Carolina | 28 | $33,230 |
| North Dakota | 39 | $46,523 |
| Ohio | 33 | $39,323 |
| Oklahoma | 31 | $37,384 |
| Oregon | 28 | $33,230 |
| Pennsylvania | 28 | $33,784 |
| Rhode Island | 36 | $43,753 |
| South Carolina | 31 | $36,830 |
| South Dakota | 42 | $50,399 |
| Tennessee | 28 | $33,784 |
| Texas | 34 | $40,707 |
| Utah | 31 | $37,661 |
| Vermont | 36 | $43,753 |
| Virginia | 30 | $35,723 |
| Washington | 33 | $39,323 |
| West Virginia | 26 | $31,569 |
| Wisconsin | 35 | $42,646 |
| Wyoming | 38 | $45,692 |
| Total US | 32 | $38,492 |
Additional Costs
Cost of alcohol and illicit drug -related health care use: Applying the average annual per capita alcohol and illicit drug related health care cost of $200.65 to a population of 1,000 adds $200,650 in health care costs. This sum represents expenditures such as treatment of illnesses and injuries associated with alcohol and illicit drug use, treatment and prevention of alcohol and illicit drug problems, and insurance administration . Since these estimates do not include costs that are specific to prescription pain medication, these numbers almost certainly underestimate the total costs that are attributable to substance use disorders.
State-specific estimates of the annual cost of health care services associated with substance use disorders are computed by multiplying the number of individuals by the per capita cost of alcohol and illicit drug-related health care use.
Example: For 1000 public sector adults in the District of Columbia, the number of public sector adults is multiplied by the average per capita cost of $200.65, yielding an estimated cost of $200,650 yearly.
Serious Psychological Distress
The NSDUH assesses whether respondents have had serious psychological distress, formerly referred to as serious mental illness (SMI) in versions of the NSDUH prior to 2004. Nonspecific serious psychological distress is determined using a six item scale that measures how frequently respondents experienced distress symptoms during the one month in the past year when they were at their worst emotionally. The symptoms of distress include the following: feeling hopeless, feeling nervous, feeling restless or fidgety, feeling sad or depressed, feeling everything was an effort, and feeling worthless. Individuals with substance use disorders are approximately twice as likely to have had serious psychological distress at some point in the previous year (34.3 percent vs. 16.5 percent). To estimate the number of individuals who are likely to have had serious psychological distress, the Calculator multiplies the expected number of individuals with substance use problems by the difference between the rate of serious psychological distress among individuals with substance use disorders and the rate of serious psychological distress among individuals with no substance use disorders.
Much of the serious psychological distress found among individuals is due to depression. Individuals with substance use disorders were twice as likely to report a co-occurring major depressive episode in the previous 12 months. Approximately one-fifth (21.4 percent) of individuals with a substance use disorder reported co-occurring depression, while 9.3 percent of individuals with no substance use disorder had major depression.
Anxiety
The NSDUH assesses whether respondents have experienced anxiety during their lifetime, and during the past 12 months. Adults with substance use disorders are much more likely to report experiencing anxiety in the past year (10 percent) than adults without substance use disorders (5 percent). Adults with substance use disorders are also more likely to report experiencing anxiety in their lifetime (15 percent) compared to adults without alcohol problems (8 percent). To estimate the number of adults who are likely to experience anxiety and also have a substance use disorder, the Calculator multiplies the expected number of adults with a substance use disorder by the difference between the rates of adults who have reported experiencing anxiety among those with substance use disorders compared to those without substance use disorders.
Smoking
The NSDUH assesses whether respondents have been addicted to nicotine within the past month. Individuals with substance use problems are about twice as likely to have nicotine dependency (34.8 percent versus. 17.0 percent). To estimate the number of individuals who are likely to have a nicotine dependence (smoking) problem, the Calculator multiples the expected number of individuals with substance use problems (previously calculated by the Calculator) by the difference between the rate of nicotine dependence of individuals with substance use disorders and the rate of nicotine dependence of individuals without substance use disorders.
Problems with Law Enforcement
The NSDUH assesses whether respondents have ever been arrested and booked. Individuals with substance use disorders are approximately 2 and one-half times as likely to have been arrested and booked (51.7 percent versus. 21.3 percent). To estimate the number of individuals who are likely to have a problem with law enforcement, the Calculator multiples the expected number of individuals with substance use problems by the difference between the rate of arrests of individuals with substance use disorders and the rate of arrests of individuals without substance use disorders.
Driving Under the Influence of Alcohol and/or Illicit Drugs
The NSDUH assesses whether respondents have driven under the influence of alcohol or other drugs in the previous year. Individuals with substance use disorders are approximately five and one-half times more likely to have driven under the influence in the past year (56.7 percent versus 10.5 percent). To estimate the number of individuals who are likely to have a problem with driving under the influence of alcohol or drugs within the previous year, the Calculator multiples the expected number of individuals with substance use problems by the difference between the rate of driving under the influence of alcohol or drugs of individuals with substance use disorders and the rate of DUI of individuals without substance use disorders.
Violence
The NSDUH assesses whether respondents have engaged in serious violence by attacking someone with the intent to cause bodily harm in the previous year. Individuals with substance use disorders are much more likely also to report that they have attacked someone (14.2 percent) than workers without substance use disorders (3.0 percent). To estimate the number of individuals who are likely to have displayed violent behavior and who also have a substance use disorder, the Calculator multiplies the expected number of individuals with substance use problems by the difference between the rates of individuals who have reported attacking someone among those with substance disorders compared to those without substance use disorders.
Co-Occurring Substance Use Disorders
The NSDUH results can also be used to assess the degree to which individuals with one substance abuse disorder meet the diagnostic criteria for another substance abuse disorder.
Individuals who currently meet the diagnostic criteria for an alcohol abuse or dependence disorder are significantly more likely to meet the diagnostic criteria for illicit drug abuse or dependence (22.6 percent) than individuals without an alcohol problem (3.5 percent). Likewise, individuals who abuse or are dependant on prescription pain medication are more likely to meet the diagnostic criteria for alcohol abuse or dependence (44.2 percent) than other individuals (8.9 percent).
Domestic Violence
Past versions of the NSDUH have asked respondents to report whether they have hit, or attempted to hit, their spouse or partner in the past 12 months. Data from the last year that this question was included in the study, 2002, were used to estimate the prevalence of domestic violence cases among individuals with and without substance use disorders. These rates were then applied to 2004-2006 substance use prevalence rates to estimate the excess cases of domestic violence that can be attributed to substance use disorders.
To estimate the excess number of individuals who have committed an act of domestic violence in the past 12 months, the Calculator multiplies the expected number of individuals with substance use problems by the difference in the general population domestic violence rates of those who have substance use problems and those who do not have substance use problems (19.3 percent vs. 9.5 percent).
Prevalence Rates of Social Problems
The following table summarizes the prevalence of the social problems described above based on the presence of substance use disorders.
| With Substance Abuse Use Disorder (percent) | No Substance Abuse (percent) | Difference (percent) | |
|---|---|---|---|
| Serious Psychological Distress (past year) | 34.3% | 16.5% | 17.8% |
| Major Depressive Disorder (past year) | 21.4% | 9.3% | 12.1% |
| Anxiety (past year) | 10.0% | 4.9% | 5.1% |
| Arrested and Booked | 51.7% | 21.3% | 30.4% |
| DUI (past year) | 56.7% | 10.5% | 46.2% |
| Nicotine Dependence | 34.8% | 17.0% | 17.8% |
| Attached Someone With the Intent to Harm | 14.2% | 3.0% | 11.2% |
| Perpetrated an Act of Domestic Violence | 19.3% | 9.5% | 9.8% |
Costs and Benefits Associated With Substance Abuse Treatment in the Public Sector
A literature review was conducted in order to identify studies that examined costs and benefits associated with substance abuse treatment in public sector populations. Included studies met the following criteria:
The study must utilize a public sector population (e.g. Medicaid, uninsured, or receiving income benefits such as SSI)
The study must have been published between January 1999 and January 2010
The study must be published in English
Studies must be methodologically sound and report sufficient information to calculate costs and benefits associated with substance abuse treatment.
Studies must include information on a variety of benefits that are applicable to a public sector population. Studies that focused on benefits associated with a single outcome (e.g. crime) were excluded from analysis.
The following studies demonstrate the public sector cost savings that can be achieved through substance abuse treatment.
Estee, S. and Nordlund, D. (2003). Washington State Supplementary Security Income (SSI) Cost Offset Pilot Project. Report 11.109. Available online at:
http://www.dshs.wa.gov/pdf/hrsa/dasa/ResearchReports/ssi2002pr.pdf
The cost of substance abuse treatment was compared to the economic benefits associated with reduced medical, mental health, and nursing home costs, using data from Washington State. Analyses compared a sample of 7153 Supplementary Security Income (SSI) recipients who received treatment to a sample of 8881 recipients who needed, but did not receive treatment. Analyses indicated that substance abuse treatment resulted in total Medicaid (medical, mental health and nursing home) costs that were $252 less per month, per client. The total estimated cost of treatment was $162 per month, resulting in an estimated benefit-cost ratio of 1.5: 1, or $15,000 for every $10,000 invested in treatment. All costs and benefits are reported in 2001 dollars.
Norlund, DJ, Estee, S., Mancuso, D and Felver, B. (2004). Methadone Treatment For Opiate Addiction Lowers Health Care Costs And Reduces Arrests And Convictions. Report 4.49fs. Available online at: http://www.dshs.wa.gov/pdf/hrsa/dasa/ResearchFactSheets/449fsMTFOA0604.pdf
The cost of methadone treatment for opiate addictions was compared to the economic benefit associated with reduced medical, mental health, and long-term care costs using data from Washington State. Supplementary Security Income (SSI) recipients who received methadone treatment (n = 675) were compared to recipients who needed, but did not receive treatment (n= 1065). Analyses indicated that methadone treatment resulted in a benefit of $765 per month per client. The total estimated cost of methadone treatment was $219 per month, resulting in an estimated benefit-cost ratio of 3.5:1, or $35,000 for every $10,000 invested in treatment.
Norlund, DJ, Estee, S., Mancuso, D and Felver, B. (2004). Non-Methadone Chemical Dependency Treatment For Opiate Addiction Reduces Health Care Costs, Arrests And Convictions. Report 4.50fs. Available online at: http://www.dshs.wa.gov/pdf/hrsa/dasa/ResearchFactSheets/449fsMTFOA0604.pdf
The cost of non-methadone treatment for opiate addictions was compared to the economic benefit associated with reduced medical, mental health, and long-term care costs using data from Washington State. Supplementary Security Income (SSI) recipients who received “drug-free” non-methadone treatment (n = 1614) were compared to recipients who needed, but did not receive treatment (n= 1065). Analyses indicated that the “drug-free” non-methadone treatment resulted in a benefit of $512 per month per client. The total estimated cost of non-methadone treatment was $200 per month, resulting in an estimated benefit-cost ratio of 2.5:1, or $25,000 for every $10,000 invested in treatment.
French, MT, Salome, HJ, and Carney, M. (2002). Using the DATCAP and ASI to Estimate the Costs and Benefits of Residential Addiction Treatment in the State of Washington. Social Science and Medicine. 55(1): 2267-2282.
The cost of residential substance abuse treatment was compared to the economic benefits associated with changes in medical status, psychiatric status, employment and legal status using data from the Washington State Outcomes Project. Treatment and outcome data was collected from 75 publically funded patients receiving treatment from one of nine residential treatment facilities in Washington State. After six months, the average (per client) total economic benefit of substance abuse treatments was estimated to be $21,329, composed of $20,089 in legal and employment savings, and $1240 in medical and psychiatric savings. The estimated cost of the treatment was $4912 per client. The benefit-cost ratio of the treatment was estimated to be 4.3:1, or $43,000 for every $10,000 invested in residential substance abuse treatment. All costs and benefits reported are in 1999 dollars.
French, MT, McCollister, KE, Sacks, S, McKendrick, K and De Leon, G. (2002).
Benefit-Cost Analysis of a Modified Therapeutic Community for Mentally Ill Chemical Abusers Evaluation and Program Planning. 25: 137-148.
The costs and benefits associated with a modified therapeutic community treatment for substance abuse were compared to the costs and benefits of treatment as usual (TAU) for this population. Two hundred and eighty-six homeless, mentally ill clients with substance abuse problems were assigned to either modified therapeutic community treatment (146) or, based on availability, to TAU (40). After 12 months, the average incremental total economic benefit of modified therapeutic community treatment (relative to TAU) was estimated to be $105,618 in medical, legal and employment savings per client. The estimated cost of the treatment was $20,361 per client. The benefit-cost ratio of the treatment was 5.2:1, or $52,000 for every $10,000 invested in substance abuse treatment. All costs and benefits reported are in 1999 dollars.
French, MT, Salome, HJ, Krupski, A, Mckay, JR, Donovan, DM, Mclellan, T and Durell, J. (2000). Benefit-Cost Analysis of Residential and Outpatient Addiction Treatment in the State of Washington. Evaluation Review. 24:609-634.
The cost of residential and outpatient substance abuse treatment services was compared to the economic benefits associated with changes in medical status, psychiatric status, employment, and legal status using data from the Washington State Treatment Outcome Pilot Prospective Study (TOPPS). Two types of treatment were examined: full continuum services, in which the client is provided with inpatient care, and subsequent “step down” care that included intensive outpatient services and partial continuum care, in which only outpatient care is provided. The sample included 263 addiction treatment clients who were eligible for publically financed addiction services. After 9 months, the average benefit of full continuum care over partial continuum care was $20,363 per client which included a benefit of $964 in reduced medical and psychiatric costs and $19,399 in employment income, money spent on alcohol/drugs, and legal status. The cost associated with the full benefit services was $2530. The estimated benefit cost ratio for the full-continuum services was 9.7:1, or $97,000 for every $10,000 invested in substance abuse treatment. The benefit-cost analysis for the partial continuum service was not significantly different than zero. All costs and benefits are reported in 1997 dollars.
French, MT, Salome, H., Sindelar, JL, and McLellan, T. (2002). Benefit-Cost Analysis of Addiction Treatment: Methodological Guidelines and Empirical Application Using the DATCAP and ASI. Health Services Research. 37(2): 433-455.
The costs of outpatient, drug-free substance abuse treatment were compared to the economic benefits associated with changes in medical and psychiatric status, employment status, drug/alcohol use, and legal status. The sample included clients at three outpatient drug-free substance abuse facilities participating in the Philadelphia Target Cities Project. Using conservative (lower bound) estimates, the average economic benefit associated with substance abuse treatment was $2197 per client after 7 months. The average cost of treatment was $258. The estimated benefit-cost ratio was 9:1, or $91,000 for every $10,000 invested in substance abuse treatment.
French, MT, McCollister, KE, Cacciola, J, Durell, J and Stepjhens, RL. (2002). Benefit-Cost Analysis of Addiction Treatment in Arkansas: Specialty and Standard Residential Programs for Pregnant and Parenting Women. Substance Abuse. 23(1): 31-51.
The costs of substance abuse services were compared to the economic benefits associated with changes in medical and psychiatric status, employment status, drug/alcohol use, and legal status. Two types of treatment were examined: specialty and standard services. Specialty treatment services included residential addiction treatment that included a variety of “wrap-around” services including job training, child care, transportation, and parenting skills training. Standard services included post-detoxification and rehabilitative services in a residential setting. The sample included 85 pregnant, or parenting women. The average economic benefit for the specialty care condition was $25,178 per client, including a $646 benefit associated with improvements in medical and psychiatric status, and $19,191 in benefits associated with changes to legal status. The average cost associated with the specialty treatment services was $8035, suggesting a benefit-cost ratio of 3.1:1. The average economic benefit associated with the standard care program was $9557, including an $1849 benefit associated with improvements in medical and psychiatric status, and $5062 associated with changes to legal status. The average cost of the standard program was $1467, suggesting a benefit-cost ratio of 6.5:1. All costs and benefits are reported in 1998 dollars.
Koenig, LK, Siegel, JM, Harwood, H, Gilani, J, Chen, Y, Leahy, P and Stephens, R. (2005). Economic Benefit of Substance Abuse Treatment: Findings From Cuyahoga County, Ohio. Journal of Substance Abuse Treatment. 28: S41-S50.
The costs of substance abuse treatment were compared to the benefits associated with changes in crime, health, welfare and earnings. Five types of treatment were examined: methadone, short-term residential rehabilitation, long-term residential rehabilitation, intensive outpatient treatment, and outpatient treatment. The sample included 595 clients receiving services at publically funded programs in Cuyahoga, Ohio. Across all the conditions, the average economic benefit associated with treatment was $17,547 per client. The overall cost of treatment was $4264, suggesting an overall benefit-cost ratio of 4.1:1, or $41,000 for every $10,000 invested in treatment. Additional analyses estimated benefit-cost ratios for different treatment modalities. The smallest benefit-cost ratio was for methadone, at 1.7:1. The largest benefit-cost ratio was for intensive outpatient treatment, at 6.8:1. All cost and benefits are reported in 1997 dollars.
Koeing, L., Denmead, G., Nguyen, R., Harrison, M. and Harwood, H. (1999). The Costs and Benefits of Substance Abuse Treatment: Findings from the National Treatment Improvement Evaluation Study (NTIES). Substance Abuse and Mental Health Services Administration, Center for Substance Abuse Treatment, National Evaluation Data Services.
The costs of substance abuse treatment were compared to the benefits associated with improvements in health care costs, crime costs, and social welfare benefits. Five types of treatment were examined: short-term hospitalization, short-term residential, long-term residential, outpatient methadone, and ambulatory outpatient treatment. The sample included a total of 5264 clients that received services from a clinic that received public support from the Center for Substance Abuse Treatment (CSAT). Across all conditions, the economic benefit after 12 months was $9177 per client, which included $8611 in reduced crime costs, $215 in reduced health care costs, and $351 in increased earnings from employment. The average cost for treatment was $2941, suggesting a benefit-cost ratio of 3.1:1. Additional analyses estimated benefit-cost estimated benefit-cost ratios of 3.7:1 for ambulatory outpatient care, 1.4:1 for short-term hospital, and 3.6:1 for long-term residential care. All cost and benefits are reported in 1994 dollars.
Ettner, S.L., Huang, D., Evans, E., Ash, DR, Hardy, M, Jourabchi, M. and Yih-Ing, H. (2006). Benefit-Cost in the California Treatment Outcome Project: Does Substance Abuse Treatment “Pay for Itself”? Health Research and Educational Trust. 41(1): 192-213.
The costs of substance abuse treatment were compared to the benefits associated with changes in medical care, mental health care, criminal activity, and earnings. Three types of treatment were examined: methadone maintenance, outpatient treatment and residential treatment. The sample included 2567 clients receiving substance abuse services using data from the California Drug and Alcohol Treatment Assessment Project.
After nine months, the average economic benefit associated with substance abuse treatment was $11,487 per client, composed of $595 in reduced hospital and emergency room visits, $77 in reduced mental health services, $1788 in reduced incarceration costs, and $3352 in increased money received from employment. Across all conditions, the average cost of treatment was $1583, suggesting an overall benefit-cost ratio of 7:1. Additional analyses estimated the benefit-cost ratio associated with outpatient treatment was 11:1, and the benefit-cost ratio associated with residential treatment was 6:1. The study found that methadone treatment offered no statistically significant benefits. All costs and benefits are expressed in 2001 dollars.
Conclusion
The Substance Use Disorder Cost Calculator provides a simple estimate of the financial toll caused by substance abuse and dependence, illuminating an area with significant potential for cost reduction and improved productivity. Given the high costs associated with substance use disorders, considerable savings can be achieved by addressing these issues in people receiving public sector services. Providing these individuals increased access to treatment for the full spectrum of substance use disorders will not only improve the health of this population, but will also result in significant cost savings.
The Center for Integrated Behavioral Health Policy, November, 2009
Footnotes:
- U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. NATIONAL SURVEY ON DRUG USE AND HEALTH 2004-2006 dataset. Research Triangle Park, NC: Research Triangle Institute. Ann Arbor, MI: Inter-university Consortium for Political and Social Research. [up]
- U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies, NATIONAL SURVEY ON DRUG USE AND HEALTH, Combined 2004-2006 dataset. Research Triangle Park, NC. Research Triangle Institute. Ann Arbor, MI: Inter-university Consortium for Political and Social Research. [up]
- Substance Abuse and Mental Health Data Archive. Available from the World Wide Web: http://sda.berkeley.edu/ [up]
- Substance Abuse and Mental Health Services Administration, Office of Applied Studies. State Estimates of Substance Use from the 2045-2006 National Surveys on Drug Use and Health. OAS Series #H-33, DHHS Publication No. (SMA) 08-4311, Rockville, MD, 2008. http://www.oas.samhsa.gov/2k6state/TOC.cfm [up]
- The NSDUH includes a common set of questions about substance use that are sufficient to construct DSM IV diagnoses of substance dependence disorders and substance abuse disorders during the year prior to the interview. [up]
- Harwood, HJ, 2000. Updating Estimates of the Economic Costs of Alcohol Abuse in the United States. National Institute on Alcohol Abuse and Alcoholism. Available from the World Wide Web: http://pubs.niaaa.nih.gov/publications/economic-2000/ . [up]
- The estimated US population used by the calculator is: 305,500,000. [up]
- The average daily hospital and emergency room charge was estimated with data from HCUPnet. Healthcare Cost and Utilization Project, Agency for Healthcare Research and Quality, Rockville, MD. http://hcupnet.ahrq.gov/HCUPnet.jsp [up]
- 13.9% of adults who receive Medicaid benefits or are uninsured meet the diagnostic criteria for alcohol or illicit drug abuse or dependence. 8% of the general adult population meets the diagnostic criteria for substance abuse or dependence. This difference is statistically significant, p <.00. [up]
- 18.8% of males who receive Medicaid or are uninsured meet the diagnostic criteria for substance abuse or dependence; only 9.1% of females do.z This difference is statistically significant, p <.00. [up]
- 65% of public sector adults with a substance use disorder were under 35 years of age. Only 35% were 35 years or older. [up]
