Costs of Substance Abuse and Dependence, Economic

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Costs of Substance Abuse and Dependence, Economic

Substance abuse and dependence on substances continue to be major health problems in the United States. The abuse of alcohol and drugs costs the nation billions of dollars in health-care costs and reduced or lost productivity each year. Since the mid-1980s, researchers have made estimates of these rising economic costs of substance abuse and dependence in the United States. In 1998, the National Institute on Drug Abuse and the National Institute on Alcohol Abuse and Alcoholism, which are parts of the National Institutes of Health, released a study on these costs based on 1992 survey data. This article is based on the 1998 report.

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The Extent of the Problem

The economic cost to society from alcohol and drug abuse was $246 billion in 1992. Alcohol abuse and alcoholism cost an estimated $148 billion, while drug abuse and dependence cost an estimated $98 billion. The 1992 estimates for alcohol were 42 percent higher than the 1985 estimate (taking into account increases due to population growth and inflation).

Economic costs can be measured in several ways. When people die prematurely because of substance abuse problems, their wages are permanently lost. Not only do health-care costs increase as a result of substance abuse, but also society pays for the problem in terms of lost productivity and increased crime.

Premature Deaths. In 1992, there were an estimated 107,400 alcohol-related deaths in the United States. Many of the alcohol-related deaths were among people between the ages of 20 and 40. However, long-term, heavy drinking is also involved in numerous premature deaths among the older population. Total costs attributed to alcohol-related motor vehicle crashes were estimated to be $24.7 billion. This included $11.1 billion from premature death and $13.6 billion from automobile and other property destruction.

Health-Care Costs. In 1992, total estimated spending for health-care services was $18.8 billion for alcohol problems and the medical consequences of heavy drinking. Specialized services for the treatment of alcohol problems cost $5.6 billion. These services included detoxification and rehabilitation programs as well as prevention, training, and research expenditures. Costs of treatment for health problems caused by alcohol were estimated at $13.2 billion.

Lost Productivity. In 1992 an estimated $67.7 billion in lost potential productivity was caused by alcohol abuse. This lost productivity took the form of work not performed, including household tasks, and was measured in terms of lost earnings and household productivity. The alcohol abusers themselves and the people with whom they lived shouldered most of these costs. About $1 billion was for victims of fetal alcohol syndrome who had survived to adulthood and were mentally impaired. This study did not estimate the burden of drug and alcohol problems on work sites or employers.

Crime. The costs of crime attributed to alcohol abuse were estimated at $19.7 billion. These costs include reduced earnings due to imprisonment, crime careers, and victims of crimes whose ability to earn an income has been reduced. The costs also include criminal justice and seizure of drug shipments. Alcohol abuse is estimated to have contributed to 25 to 30 percent of violent crime.

Before 1996, people could collect welfare benefits if they were impaired as a result of drug or alcohol abuse or dependence. The study estimated that 3.3 percent of people who received welfare benefits in 1992 did so for this reason. These benefits totaled $10.4 billion. In 1996, new welfare reform laws changed the rules as to who is eligible for welfare. Alcohol or drug dependence can no longer be the main reason for a person to receive benefits.

Who Pays?

Much of the economic burden of substance abuse and dependence falls on the population that does not abuse drugs or alcohol. Economic costs to governments for alcohol problems were $57.2 billion in 1992, compared with $15.1 billion for private insurance, $9 billion for victims, and $66.8 billion for alcohol abusers and members of their households. Society bears these costs in a variety of ways, including alcohol-related crimes and trauma (for example, motor vehicle crashes); government services (such as criminal justice and highway safety); and various social insurance programs (such as private and public health insurance, life insurance, tax payments, pensions, and social welfare insurance).

In Conclusion

Substance abuse and dependence are costly to the nation in resources used for care and treatment of persons suffering from these disorders, lives lost prematurely, and reduced productivity. Data show clearly that the measurable economic costs of alcohol and drug abuse continue to be high.