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Addiction and Health Care Costs

Although addiction treatment funding is quickly cut in periods of economic belt-tightening, the immediate savings of a budget slashing are not always true savings, when you consider the long term costs of such reduced funding.

Reducing funding for addiction treatment programs affects everyone in our communities. Whether or not anyone in your family will ever need addiction treatment, when that tax bill comes around - everyone pays for the costs of untreated addiction.

Addiction and substance abuse in our communities comes with a hefty price tag; from increased incarceration, increased burden on law enforcement, increased need for child social services, decreased work productivity, and very significantly - in increased health care costs. In 2005, Americans spent $467 billion dollars paying for services or costs related to substance abuse or addiction. Of this staggering amount of money, only 1.9% went to treatment services and prevention programs.

You pay a bit now or a lot later. To illustrate this, here are some numbers which tell the story of addiction’s toll and on the health care system.

The Health Care Costs of Untreated Addiction

* Roughly 23 million Americans have a drug or alcohol problem severe enough to warrant treatment – yet only about 10% of these people will ever get addiction treatment

* In 2005, Substance abuse funding ranked the sixth most expensive federal expenditure, behind only social security, national defense, income security, Medicaid and other federal health programs. In 2005 federal and state governments spent $207.2 billion on health care costs relating to addiction.1

* In 2004, 1 out of every 14 hospital stays in America was related to addiction or substance abuse. The total cost for these addiction related hospital stays ran to $2 billion.

* 1.7 million emergency room visits per year are related to the misuse of alcohol or drugs2

* A study out of Washington State showed that providing methadone treatment to Medicaid using opiate addicts at a cost of $219 per person per month netted total Medicaid health care savings of $765 per person per month (excluding the $219 methadone costs, average monthly Medicaid costs dropped from $2020 to $1036 for those receiving methadone). For those who take methadone for longer than 365 days, the average monthly savings increase to $899. 3

* In one study, compared to addicts who did not get treatment, people who received addiction treatment were shown to have 39% fewer ER visits, 35% reduced hospital stays, 26% reduced total medical costs 4

Addiction Treatment Pays Off

People who aren’t abusing drugs or alcohol do less damage to their physical and mental health. Additionally, people who focus mostly on getting drunk or getting high each day may not attend to their daily health needs or take adequate care to prevent the worsening of existing medical conditions – and the costs of these behaviors are tallied in reduced public health and increased total taxes.

On humanitarian grounds, we owe it our community to help every person we can to receive the addiction treatment they need, but beyond thoughts of altruism, helping people get past addiction and substance abuse just makes good economic sense.

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