Shoveling Up II: The Impact of Substance Abuse on Federal, State and Local Budgets

SHOVELING UP II: THE

IMPACT OF SUBSTANCE

ABUSE ON FEDERAL,

STATE AND LOCAL

BUDGETS

A Report by

CASAColumbia®

May 2009

© CASAColumbia 2013

Purpose of Study

• Update CASAColumbia’s 2001 report Shoveling Up: The Impact of

Substance Abuse on State Budgets

• Expand analysis to federal and local governments

• Differentiate spending by:

The burden to public programs (crime, illness, social ills)

The familiar categories of spending (prevention/treatment/research,

taxation/regulation, interdiction)

• Show promising practices for cost-effective investments

2


Advisory Panel

• Frederick M. Bohen, Chairman, The Rockefeller University (retired)

• Hon. Jeffrion L. Aubry, NYS Assemblyman, 35th Assembly District

• Tom Cochran, US Conference of Mayors (Ed Somers, alternate)

• Timothy P. Condon, PhD, National Institute on Drug Abuse (federal liaison)

• Cabell Cropper, National Criminal Justice Association

• Ester Fuchs, PhD, Columbia University, School of International and Public Affairs

• Lewis E. Gallant, PhD, National Association of State Alcohol and Drug Abuse

Directors (retired)

• Kristine Gebbie, DrPH, RN, School of Nursing, Hunter College, City University of

New York

3


Advisory Panel, cont.

• Peter A. Harkness, Governing Magazine

• Nolan E. Jones, PhD, National Governors Association (retired)

• Larry Naake, National Association of Counties (Jackie Byers, alternate)

• Scott Pattison, National Association of State Budget Officers

• William T. Pound, National Conference of State Legislatures

• Dorothy P. Rice, ScD, University of California, Institute on Health and Aging (retired)

• Don Stapley, Maricopa County Board of Supervisors

• Julie Boatright Wilson, PhD, Harvard University, John F. Kennedy School of

Government

4


Methodology

• Analyzed federal budget

• Surveyed states, DC and Puerto Rico; 47 respondents

• Analyzed total local expenditures (U.S. Census data)

• Case studies of a city government (Nashville,TN), a county

government (Multnomah,OR) and combined city-county

governments (Charlotte and Mecklenburg Co., NC)

• Reviewed > 900 articles/publications

5


Federal, state and local governments spent

$467.7 billion in 2005

on substance abuse and addiction,

10.7 % of total spending

6


Spending on Substance Abuse

and Addiction (2005)

• Federal: $238.2 billion (9.6% of budget)

• State: $135.8 billion (15.7% of budget)

• Local: $93.8 billion (9.0% of budget)

7


Coping With the Consequences

95.6% of Federal and State Substance-Related

Spending Is on the Burden to Public Programs

8

• Adult Corrections

• Juvenile Justice

• Courts

• Health Care

• Elementary and Secondary Education

• Income Support

• Child Welfare

• Mental Health

• Developmental Disabilities

• Public Safety

• Workforce


Little Spent on

Prevention/Treatment

4.4% of Federal and State Substance-Related Spending

Is in the Familiar Categories of:

9

• Prevention

• Treatment

• Research

• Regulation and Compliance

• Interdiction


The Substance Abuse/Addiction

Dollar

10

Of every Federal and State $ spent in 2005:

Of every dollar federal and state governments spent on prevention and treatment, they spent $59.83 in public

programs shoveling up the wreckage of alcohol, tobacco and other drugs--despite evidence of cost-effective science-

based interventions.

Prevention/Treatment

1.9 cents

Research

0.4 cents Regulation/Compliance

1.4 cents

Interdiction

0.7 cents

Burden to Public

Programs

95.6 cents


Conservative Estimates

• Examples of costs unavailable due to data limits:

Higher education

Tobacco/drug-related developmental disabilities

Drug-related highway accidents

Civil court costs

Many local government costs

11


Total Spending

If spending on substance abuse and addiction were its own budget category:

• It would rank 2nd at the state level, behind elementary and

secondary education

• It would rank 6th at the federal level, behind social security, national

defense, income security, Medicare and other health programs

including the federal share of Medicaid

12


Spending just on the burden of substance abuse and addiction takes at least $1,486 each year from every man, woman and child in America--

$5,944 from a family of four

13


Greatest Burden in Two Areas

• 58.0% of burden is in health care costs – substance abuse and

addiction that cause or contribute to more than 70 other diseases

requiring hospitalization

• 13.1% of burden is in justice system costs – substance abuse that

drives crime, incarceration and recidivism

14

Of Federal and State 2005 Burden Spending of $357.4 billion,

71.1% Is in Health Care and Justice System Costs


Federal Burden Spending

Burden of Substance Abuse and Addiction on Federal Programs by Budget Sector (Percent)

Total = $229.9 Billion

15

Mental Health/

Developmental

Disabilities

1.6

Public Safety

3.3

Federal

Workforce

0.4 Justice

System

2.4

Child/Family

Assistance

16.0

Education

2.4

Health Care

74.1


State Burden Spending

Burden of Substance Abuse and Addiction on State Programs by Budget Sector (Percent)


16

Mental Health/

Developmental

Disabilities

6.4

Child/Family

Assistance

7.8

Education

22.4

Public Safety

1.4 Federal

Workforce

0.5

Justice

System

32.5

Health Care

29.0


Local Burden Spending

Burden of Substance Abuse and Addiction on Local Programs by Budget Sector (Percent)


17

Education

24.4%

Child/Family

Assistance

8.2

Public Safety

13.7

Local

Workforce

1.5

Justice

System

29.2

Health Care

23.0


Federal and State Burden

Spending (2005)

18

($ millions)

Health Care 207,222

Justice System 46,977

Child/Family Assistance 46,696

Education 33,896

Mental Health/DD 11,772

Public Safety 9,303

Workforce 1,568

TOTAL 357,433


Other Federal and State

Spending (2005)

19

($ millions)

Prevention and Treatment 7,173

Research 1,604

Regulation and Compliance 5,066

Interdiction 2,638

TOTAL 16,481

Little Spent in Familiar Substance Abuse and Addiction Categories:


Sin Taxes Don’t Pay Their Way

For each $ federal and state governments collect in alcohol and

tobacco taxes and liquor store revenues, they spend $8.95 shoveling

up the consequences

• The public health goal of tobacco taxes: eliminate use

• The public health goal of alcohol taxes: limit underage and adult

excessive drinking

20


For Every $100 Spent

21

On Substance Abuse and Addiction

Government

Prevention, Treatment

and Research

Federal $ 2.33

State Average $ 2.38

Wide Variation:

Connecticut

$10.39

Kentucky

Hawaii

$ 7.32

$ 0.55

New Hampshire $ 0.22


RECOMMENDATIONS

• Prevention

• Treatment/Disease Management

• Taxation and Regulation

• Research

22


Prevent It!

• Public health information campaign

• Comprehensive messages and programs aimed at children

• Screenings, brief interventions and treatment referrals

23


Treat It!

24

• Comprehensive assessments

• Behavioral and pharmacological treatments

• Treatments for co-occurring disorders

• Long term disease management

• Drug treatment alternatives to prison and prison-based treatment

and aftercare

• Health insurance coverage for addiction prevention and treatments


Control It!

25

• Alcohol and tobacco tax increases

• Indoor smoking bans and tobacco quit lines

• Increased enforcement to limit youth access to tobacco and alcohol


Understand It!

26

• Increased genetic, biological and behavioral research

• Best practices

• Cost/benefit studies


27

Addiction is a disease that should be prevented

and treated--rather than waiting for the disease

to advance, cause enormous human suffering

and drive up health care, corrections and other

social costs


Ending Addiction

Changes Everything

www.casacolumbia.org


29

Slide 1: • This is the first study ever conducted documenting the costs of substance abuse and addiction to

all levels of government.

Slide 2: • This report is an update of CASAColumbia’s 2001 report of the same name that documented

costs of substance abuse to state governments.

• This study was conducted in response to multiple requests from the states for updated state data.

We also extended the analysis to the federal and local levels.

• This report breaks down substance related spending to look at:

1. How much goes to carry the burden of substance abuse and addiction in public programs.

By burden we mean the costs that governments incur to deal with the consequences of our

failure to prevent or treat the problem--consequences that drive up costs, for example, of

health care, crime, child neglect and abuse, and even workforce spending.

2. And how much of it goes to the familiar categories of substance related spending:

prevention, treatment, research, taxation, regulation, and drug interdiction.

• Finally, the report identifies many promising and cost effective investment options.

Slide 6: • Of the $4.4 trillion in total federal, state and local government spending in 2005, at least $467.7

billion (10.7% of total spending) went to deal with substance abuse and addiction.

Speaker Notes


30

Slide 8: • The most shocking finding is that 95.6% of total substance-related federal and state spending

goes to shovel up the burden of this health problem in the budget categories you see here.

Slide 9: • Only 4.4% of state and federal spending is divided among these more familiar categories.

• This report is a searing indictment of the policies of government at every level that spend virtually

all of the funds in this area to shovel up the wreckage of substance abuse and addiction and

relatively little to prevent and treat it.

Slide 10: • Here you can see how the burden to public programs at the federal and state level consumes our

resources.

• Less than 2 cents of every substance abuse dollar goes to prevention and treatment, despite

extensive evidence of cost-effective strategies.

Speaker Notes


31

Slide 11: • Despite the enormity of spending in this area, these estimates are in every measure conservative:

• In cases where our data were limited, we always chose the conservative estimate.

• In some areas, such as you see here, we were not able to make any estimates due to data

limitations.

• The true costs to government are likely much higher than our estimates suggest.

Slide 12: • Even with these conservative assumptions,

• If spending on tobacco, alcohol and other drugs were its own state budget category, it would

rank second, surpassed only by state spending on elementary and secondary education.

• At the federal level, it would rank 6th behind the big ticket items like social security, national

defense and health.

Slide 13: • Total government substance-related spending on the burden to public programs amounts to an

average of $1,486 each year for every person in America--almost $6,000 for a family of 4.

Speaker Notes


32

Slide 14: • Two areas of spending on the burden of substance abuse and addiction to government comprise

almost 3/4 of federal and state burden spending: health care and the justice system.

• The largest share is the impact on health spending where untreated addiction drives

hospitalizations for more than 70 other diseases.

Slide 15: • With these next 3 slides, you will see how the burden to public programs is distributed at each

level of government.

• This is the 95.6 cents of every substance abuse dollar.

• At the federal level, spending on the burden of this disease in our health care programs consumes

74% of federal burden spending.

• The next largest category is child and family assistance--welfare and services for children who are

neglected and abused.

Slide 16: • At the state level, justice system spending makes up the largest share of the burden,

• Followed closely by health care and the cost of substance abuse to the education system—such

as special education for those with substance-related learning disabilities or mental retardation.

Speaker Notes


33

Slide 17: • As with the states, substance-related justice spending is the largest share of local burden

spending.

• Substance-related education spending comes in second locally, followed closely by health care.

Slide 18: • Here is a summary of how the federal and state burden spending breaks out by category.

• Health care spending dwarfs all other categories.

Slide 19: • Here is the same information for the remaining categories of spending.

Speaker Notes


34

Slide 20: • Tobacco and alcohol taxes reduce use and provide much needed government revenues--but

these taxes don’t begin to offset the burden substance abuse imposes.

• For each dollar federal and state governments receive in tobacco and alcohol taxes and liquor

store revenues, they pay almost $9 on the burden of substance abuse.

Slide 21: • Even though spending on prevention, treatment and research is very low, there are wide

variations among the states.

• For every $100 in substance-related spending,

• The federal government spends $2.33 on prevention, treatment and research

• And states spend on average about the same--$2.38

• But spending ranges from a low of:

• $0.22 in New Hampshire

• To a high of $10.39 in Connecticut

Speaker Notes


35

Slide 22: • There is much more detail in the report on substance-related spending by jurisdiction, and a wide

range of recommendations.

• Key recommendations are designed to reverse our upside down spending patterns.

Slide 23: • Prevention is a top priority and the main focus of our prevention efforts must be our children.

• Prevention strategies should include broad-based public health information campaigns to:

• Increase public understanding about addiction, and

• Change the culture around alcohol and other drug use as we have done with tobacco.

• Examples are:

• Targeted media campaigns like the Legacy’s truth campaign

• Comprehensive school and community-based programs

• And screenings and brief interventions in many different venues to look for the problem and

intervene early before the disease and its cost progress.

Speaker Notes


36

Slide 24: • Effective evidence-based treatment is critical.

• Approximately 9% of the population suffers from an addictive disorder, but only about 10% of them

receive treatment--lower than for any other health condition.

• Treatment includes:

• Behavioral and pharmacological approaches

• Treatment for mental and other health disorders that co-occur with addiction

• And long term disease management as would be provided for diabetes and hypertension, for

example.

• Health insurance coverage for early intervention and treatment, as we do with other chronic

diseases, is essential--as is expanded coverage for the uninsured.

• A review of the cost-related research on treatment by the National Institute on Drug Abuse found

that investments in treatment alone could yield a savings of $12 or more for every dollar invested.

Speaker Notes


37

Slide 25: • We need to do a better job of regulation and control.

• Taxation on tobacco can help reduce smoking and on alcohol can curb both underage and adult

excessive drinking.

• Raising alcohol and tobacco taxes also are linked to immediate health and cost benefits as are

indoor smoking bans

• And increased enforcement can help keep these substances out of the hands of children and

teens.

Slide 26: • We need to increase our knowledge about the disease of addiction and more cost-effective

prevention and treatment options.

Speaker Notes


38

Slide 27: • Medical science has demonstrated that addiction is a disease that can and should be prevented

and treated. America’s failure to recognize this fact has resulted in untold and avoidable human

suffering as well as the billions in wasted spending this report has uncovered.

• The findings of this report suggest a huge opportunity for costs savings--savings that are

particularly crucial in these times of tight budget constraints. The shifts in investments we

recommend do not all require new money. We need to change the way we do business--for

example, paying for treatment and training instead of simply incarceration.

• Because there is no broad-based implementation plan in place, we can’t put a definitive price on

expected savings. We do know, though, that specific interventions can yield significant returns in a

short period. For example:

• Screenings and brief interventions can reduce hospitalizations by up to 37% and ER visits by

up to 20% in a year

• Treatment can reduce alcohol- or other drug-related medical visits by more than 1/2 in a year

• A 10% increase in cigarette taxes can reduce youth smoking by 6-7%.

• And we know that the impact is likely compounded as more and more interventions are taken to

scale.

Speaker Notes

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Shoveling Up II: The Impact of Substance Abuse on Federal, State and Local Budgets

Health & Medicine