Opioid Epidemic Linked to $205B in Excess Healthcare Spending Over 4 Years

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By John Commins

The opioid crisis has cost the nation at least $631 billion over the past four years, and nearly one-third of that estimate is attributable to excess healthcare spending, according to an analysis by the Society of Actuaries.

The $205 billion attributable to excess healthcare spending between 2015 and 2018 included providing medical care for opioid addicts and infants born with neonatal opioid-related conditions, and other family members bearing costs associated with those diagnoses.

“As stakeholders seek to understand and address the opioid epidemic, this analysis provides insight into the tremendous impact across all areas of our economy,” says Dale Hall, managing director of research at SOA.

“Our goal is really to help our member actuaries, insurers and other stakeholders better understand the implications of the opioid crisis,” Hall says. “A lot of our members can use this information to build into pricing exercises, healthcare evaluation exercises, and understand the impact of premature mortality.”

The analysis projects that the costs for the opioid crisis in 2019 will range anywhere from $172 billion to $214 billion, depending on key metrics, such as the prevalence of opioid use disorder and the number of opioid overdose deaths this year.

“We’ll have a better idea when we get final, premature mortality deaths due to the opiate crisis,” Hall says. “It’s been trending up, about 45,000 per year and most recent years. We will also want to see what those premature death counts end up being in 2019. Those two categories, healthcare costs and mortality costs, are 70% of the total, and so those are the things that we want to watch out for.”

The largest financial burden imposed by the opioid crisis was attributed to premature mortality, which accounted for $253 billion – 40% – of excess spending between 2015 and 2018, mostly measured in lost lifetime earnings for people who died prematurely due to opioid overdoses.

The SOA analysis is based several data sources, including administrative claims, federal surveys, and databases, and prior peer-reviewed literature to determine the total economic burden.

Here’s a further breakdown of the financial burden of the opioid epidemic across the economy between 2015 and 2018:

  • Costs associated with criminal justice activities, including police protection and legal adjudication activities, lost property due to crime, and correctional facility expenditures, totaled $39 billion, about 6% of the total cost.
  • Government-funded child and family assistance programs and education program costs contributed another $39 billion.
  • Lost productivity costs comprised the remaining 15% of total costs, totaling $96 billion, and include the cost of absenteeism, reduced labor force participation, incarceration for opioid-related crimes, and employer costs for disability and workers’ comp for opioid-addicted workers.

SOA said the economic burden could be higher than its estimates, because the analysis does not include economic impacts for which there is a lack of adequate data, such as reductions in non-paid household productivity, reductions in on-the-job productivity, or reductions in quality of life for people impacted directly or indirectly by opioid use disorder.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.