Economic cost of opioid crisis $631 billion over four years

The opioid crisis cost the United States economy $631 billion from 2015 through 2018, according to a study released on Tuesday by the Society of Actuaries of non-medical opioid use in the country.

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The biggest driver of the cost over the four-year period is unrealized lifetime earnings of those who died from the drugs, followed by health care costs. Governments incur less than one-third of the financial costs, and the rest of it affects individuals and the private sector.

The Centers for Disease Control and Prevention (CDC) has reported that, from 1999 through 2017, more than 702,000 people have died from a drug overdose. In that time period, nearly 400,000 of the deaths caused by drug overdoses involved prescription or illicit opioids.

“While the number of opioid prescriptions peaked in 2011 (at 219 million), the number of drug overdose deaths has continued to climb,” the Society of Actuaries’ Mortality and Longevity Strategic Research Committee reports. “More than 70,000 Americans died in 2017 from drug overdoses, and opioids are the fastest-growing and the largest drug category involved. Opioid overdose deaths are now the single largest factor slowing the growth in U.S. life expectancy and have led to stagnation or decreases in life expectancy three years in a row for the first time since 1915–1918, when the country was facing World War I and the Spanish flu pandemic. By some estimates, the United States may be on track to see an additional 500,000 opioid overdose deaths over the next decade.”

The U.S. Department of Health and Human Services (HHS) declared the epidemic a public health emergency in 2017 because 130 Americans were dying every day from opioid overdoses.

The actuaries' report is intended partly to help the insurance industry figure out how to factor opioid use disorder into policy pricing.

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It found that the cost of the opioid crisis for 2019 is likely to range between $171 billion and $214 billion, with the midpoint cost estimate for 2019 is $188 billion.

“The nature and scale of the opioid crisis have been in considerable flux in recent years, with synthetic opioids such as fentanyl only recently becoming a dominant driver of the severity of the crisis” the actuaries report in the study. “Provisional estimates from the CDC show opioid overdose deaths plateauing in 2018, but overdose deaths from illicit use of synthetic opioids are still on the rise, and it’s not yet clear whether overdose deaths are likely to be higher or lower in 2019. As such, timely estimates are key for understanding the economic costs of the crisis as it is currently manifesting.”

"Opioid overdose deaths are now the single largest factor slowing the growth in U.S. life expectancy and have led to stagnation or decreases in life expectancy three years in a row for the first time since 1915–1918, when the country was facing World War I and the Spanish flu pandemic."

- Society of Actuaries report on cost of opioid epidemic to U.S. economy

Nearly one-third, or $205 billion, of the estimated economic burden of the opioid crisis from 2015-18 is related to excess health care spending for individuals with opioid use disorder, infants born with neonatal abstinence syndrome (NAS) or neonatal opioid withdrawal syndrome (NOWS), and for family members of those with diagnosed opioid use disorder.

Most of the added health care costs for dealing with opioid addiction and overdoses were borne by Medicaid, Medicare and other government programs, according to the report.

In addition, the crisis created up $18 billion in commercial insurance costs last year, and lost productivity costs added another $27 billion.

The actuaries found that “studies have shown that patients with diagnosed OUD have more complex health care needs than those without, as well as lower reported physical and mental qualities of life. Patients with OUD exhibit additional health care costs, not only from the direct treatment of OUD but also from increased utilization of all types of health care services (including both physical health and behavioral health services in inpatient, outpatient and professional settings.)

“Averaged across all payers, patients with OUD incurred almost $13,000 to $15,000 more in health care costs each year than similar patients not diagnosed with OUD. Among the three major payers, commercially insured patients with OUD show the highest additional costs, followed by Medicare and Medicaid beneficiaries, with the costs for Medicaid beneficiaries coming in at half or less of the additional costs for those covered by commercial insurance or Medicare.”

The prevalence of OUD showed a 70 percent increase for Medicare from 2015 to 2016. This increase was widespread, as 14 states showed the prevalence rates in the Medicare population doubled over this timeframe.

Mortality costs accounted for 40 percent - $253 billion - of the estimated economic impact of the opioid epidemic, predominantly driven by lost lifetime earnings for those who died prematurely due to drug overdoses involving opioids. Those mortality costs came in at more than $72 billion last year alone, the report said.

The costs that were associated with criminal justice activities – which include police protection and legal adjudication activities, lost property due to crime, and correctional facility expenditures – came in at $39 billion, roughly 6 percent of the total cost from 2015 to 2018.

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Another $39 billion over the four-year period came from costs associated with government-funded child and family assistance programs and education programs.