The devastating health effects of the opioid epidemic are well documented, with more than 700,000 deaths from overdoses and millions more.
And Americans are learning more every day about the role that pharmaceutical companies and distributors play in painful villages and towns across the country.
However, we know relatively less about the financial costs of the crisis. In recent years, several studies have emerged that estimate the national economic costs of the epidemic at $ 53 billion to $ 79 billion in a single year.
But given that states have taken the charge to sue opioid makers for the purpose of recovering part of their own costs, we wanted to know more specifically how the crisis has damaged their budgets. This is crucial to understanding what they can recover from their lawsuits.
So we led a team of 20 researchers at Penn State in a series of studies that looked at the different ways in which state budgets carried the burden of the opioid crisis. The result is the first comprehensive overview of opioid costs by the state.
We estimate that, generally, Medicaid programs & # 39; s spent at least $ 72 billion due to opioid abuse from 1999 to 2013, the most recent year with available data
The high costs of overdoses and treatment
The most prominent – and largest – costs are those related to medical care.
Although previous studies have estimated the medical costs of opioid abuse, none have provided a comprehensive justification of the costs for the Medicaid programs of the states. These costs include those associated with overdoses, treatment for opioid-related conditions, and other care that they may receive because of the resulting health effects such as hepatitis C and HIV.
Our team cracked the data from 17 Medicaid claim databases from 17 states and then extrapolated the data to make estimates at the national level. We estimate that the state Medicaid programs & # 39; s generally spent at least $ 72 billion due to opioid abuse from 1999 to 2013, the most recent year with available data.
Based on a Medicaid cost estimate of $ 8.4 billion in 2013, we estimate that states have probably spent an additional $ 40 billion since then, bringing the total bill to at least $ 112 billion.
Lower employment, less tax revenue
In addition to effects on health care use, abuse of opioids can also lead to significant reductions in employment, which in turn can rob states of expected tax revenue.
With the help of an online tax simulator and an existing study into the effect of people leaving staff due to abuse of opioids, we were able to estimate how much tax revenue might have been lost.
We estimate that states may have lost nearly $ 12 billion in tax revenues from 2000 to 2016 due to the effect of opioid abuse on people's labor capacity. The running costs amount to approximately $ 700 million per year, bringing the estimated total in 2018 to more than $ 13 billion.
There are other costs for states associated with a portion of the population unable to work, such as increasing eligibility for cash assistance, nutritional programs, government-funded health insurance, and other safety net programs.
Although we do not have good data available to provide estimates, these will be important costs for the states to consider.
Criminal law is another important part of opioid-related costs for states.
To date, many cost studies have focused on how those in prison or prison may not be able to work. But states and local municipalities spend considerable resources on arrests, courts, and corrections resulting from opioid abuse.
Although several studies have attempted to estimate these costs, none have thoroughly investigated the full set of opioid-related criminal costs at the state level. Due to the difficulty in obtaining reliable data, our team focused on Pennsylvania. We estimate that, from 2007 to 2016, the opioid crisis cost the state criminal justice system $ 526 million.
These figures are highly variable from year to year and among all states, making it very difficult to make a comprehensive, national estimate. Since Pennsylvania has both a large population and has been hit unusually hard by the opioid crisis, the costs in Pennsylvania are probably higher than average.
However, the Pennsylvania estimates show that the costs are high and likely to go far into the national billions of dollars.
Taking care of children
Although much of the attention is focused on the opioid abuse, children are one of the populations most affected by opioid abuse.
It has been shown that abuse of opioids leads to more interventions by governmental institutions for welfare and child protection. Although the data remains limited, our team has used a modeling approach to demonstrate that abuse of opioids in all states from 2011 to 2016 can be associated with $ 2.8 billion in costs for the child welfare system.
In addition, babies born to mothers using prenatal opioids can be born with withdrawal symptoms – namely neonatal withdrawal syndrome – that require significant care. The effects of neonatal abstinence syndrome and the associated costs can persist for a long time, because affected children may need many special aids.
Data in this area is inherently difficult to identify in every state. However, we found that for a cohort of children born with neonatal abstinence syndrome in Pennsylvania in 2015, the additional cost of providing special educational services could have been approximately $ 8.3 million. A very rough estimate of the national costs would be in the margin of at least $ 50 million a year.
Tip of the iceberg
Collectively, our studies have estimated around $ 85 billion in estimated financial costs to set budgets during the periods identified in each of them. After extrapolation to cover the costs until 2018, we think the total is at least about $ 130 billion, with a current account from $ 6 billion to $ 10 billion a year.
While these figures may be lower than some other estimates that either include broader economic costs or do not take into account year-to-year variations, the bottom line is that our data shows that states carry a very high financial burden in this crisis.
Our estimates also provide a benchmark that states can use in litigation as they seek to recoup these costs to help cover the ongoing costs associated with controlling and ending the epidemic – and indicate why so many opioid manufacturers go bankrupt.
However, our analysis is only the tip of the iceberg, since it only covers the costs for state governments and excludes the broader economic costs of the crisis. Individuals and their families have also suffered greatly and are likely to bear even higher costs – both financially and emotionally.
This one article was originally published by The Conversation
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