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Annual cost of opioid crisis as high as $504 billion

November 21, 2017

Two recent research studies have placed dollar amounts on the staggering costs of opioid addiction and overdose deaths. Each provides a strong body of evidence to support investment in combatting the crisis—something addiction treatment providers continue to advocate for at the federal, state and local levels.

According to research released by Altarum last Thursday, the cost of the opioid crisis in 2016 was an estimated $95 billion. According to a separate report released Monday from the White House Council of Economic Advisers (CEA), total costs—including a larger measure associated with lives lost—added up to $504 billion in 2015.

“Whenever you can put an economic dollar value on something, it makes it far easier to marshal resources for prevention, intervention and treatment to help solve the crisis,” says Corey Rhyan, senior analyst, who conducted the Altarum study.

He says the significance of the Altarum research is that it identifies where the $95 billion in costs are coming from while also quantifying the potential return on investment that could be realized from new solutions to address the source of those costs.

The CEA report includes broader measures, which explains the higher $504 billion figure. For example, researchers assumed opioid deaths are under-reported and accounted for that variable. They also used a somewhat controversial measure known as the “value of a statistical life,” which considers the theoretical economic impact of a life lost prematurely. The range of values cited for a statistical life reach as high as $8.9 million.

“They’re very different, and they’re answering different questions,” Rhyan says, comparing the research studies. “And both have value.”

Costs add up

Each analysis provides a different quantified number, but both are in accord, supporting the intuitive knowledge that opioid addiction in the United States is extremely costly—when measured in lives and in dollar amounts.

For example, Altarum’s report breaks down its estimate into seven categories, ranging from direct and indirect healthcare costs to worker productivity loss to lost tax revenue. The cost of related public services is also accounted for, such as law enforcement resource use to stop drug diversion and children’s services spending to manage cases of child neglect.

Rhyan says the findings can provide an incentive for regulators because they could realize net savings if they invest in ways to prevent opioid-related costs in the first place. The potential benefits of ending the opioid crisis could amount to $5.9 billion for local governments; $13.5 billion for states; $29.2 billion for the federal government; and $46.6 billion for the private sector and individuals.

The largest burden of addiction is on the individuals themselves, he says. Those in active addiction who seek treatment and recovery have the potential to return to—or begin—a life that might include the tangible benefits of employment, reliable income, family life and community engagement.

 “It should be an incentive for those who are currently trying to move themselves through the treatment process,” Rhyan says. “They can look at the possible future value they will be able to achieve for themselves if they reach that point of recovery.”

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