Economic Costs Of Alcohol Abuse And Alcohol Dependence

Alcohol abuse and alcohol dependence continue to be major health problems in the United States. The terms alcohol abuse and alcohol dependence are based on the diagnostic criteria as stated in the American Psychiatric Association's DIAGNOSTIC AND STATISTICAL MANUAL of Mental Disorders, Third Edition, Revised (1987). As such, they cost the nation billions of dollars in health-care costs and reduced or lost productivity each year. Since the mid-1980s, researchers have issued studies that estimate the economic costs associated with alcohol and alcohol abuse in the United States. In 1985, alcohol abuse and dependence cost an estimated 70.3 billion dollars and in 1988 an estimated 85.8 billion dollars (Rice et al., 1990, 1991). In 1998, the National Institute on Drug Abuse (NIDA) and the National Institute on Alcohol Abuse (NIAAA), which are parts of the National Institutes of Health (NIH), released a study on these costs based on 1992 survey data. This report, which also analyzed drug abuse, forms the basis of this article.

EXTENT OF THE PROBLEM

The economic cost to society from alcohol and drug abuse was $246 billion in 1992. Alcohol abuse and alcoholism cost an estimated $148 billion, while drug abuse and dependence cost an estimated $98 billion. When adjusted for inflation and population growth, the alcohol estimates for 1992 were very similar to cost estimates produced over the past 20 years. The 1992 estimates were significantly greater than the 1985 estimate for alcohol: 42 percent higher for alcohol over and above increases due to population growth and inflation. Between 1985 and 1992, inflation accounted for about 37.5 percent and population growth for 7.1 percent increases. Over 80 percent of the increase in estimated costs of alcohol abuse was attributed to changes in data and methodology employed in the new study. This suggests that the previous study significantly underestimated the costs of alcohol abuse.

In 1992, there were an estimated 107,400 alcohol-related deaths in the United States. Many of the alcohol-related deaths were among persons between ages twenty and forty, because the major causes of death, such as motor vehicle crashes and other causes of traumatic death are concentrated among younger-aged people. However, alcohol is also involved in numerous premature deaths among the older population because of long-term, excessive alcohol consumption. Total costs attributed to alcohol-related motor vehicle crashes were estimated to be $24.7 billion. This included $11.1 billion from premature mortality and $13.6 billion from automobile and other property destruction.

In 1992, total estimated spending for health care services was $18.8 billion for alcohol problems and the medical consequences of alcohol consumption. Specialized services for the treatment of alcohol problems cost $5.6 billion. This included specialized detoxification and rehabilitation services as well as prevention, training, and research expenditures. Costs of treatment for health problems attributed to alcohol were estimated at $13.2 billion.

An estimated $67.7 billion in lost potential productivity was attributed to alcohol abuse in 1992. This accrued in the form of work not performed, including household tasks, and was measured in terms of lost earnings and household productivity. These costs were primarily borne by the alcohol abusers and by those with whom they lived. About $1 billion was for victims of fetal alcohol syndrome who had survived to adulthood and experienced mental impairment. This study did not estimate the burden of drug and alcohol problems on work sites or employers.

The costs of crime attributed to alcohol abuse were estimated at $19.7 billion. These costs include reduced earnings due to incarceration, crime careers, and criminal victimization; and the costs of criminal justice and drug interdiction. Alcohol abuse is estimated to have contributed to 25 to 30 percent of violent crime.

The study estimated that 3.3 percent of social welfare beneficiaries in 1992 received benefits because of an administrative determination of drug- or alcohol-related impairment. While 1996 federal welfare reform legislation has largely terminated alcohol or drug dependence as a primary cause for benefit eligibility, these impairments resulted in transfers of $10.4 billion in 1992, with administrative and other direct service expenses of $683 million for those with alcohol problems.

A large amount of the economic burden of problems falls on the population that does not abuse alcohol. Governments bore costs of $57.2 billion (38.6 percent) in 1992, compared with $15.1 billion for private insurance, $9 billion for victims, and $66.8 billion for alcohol abusers and members of their households. Costs are imposed on society in a variety of ways, including alcohol-related crimes and trauma (e.g., motor vehicle crashes), government services, such as criminal justice and highway safety, and various social insurance mechanisms, such as private and public health insurance, life insurance, tax payments, pensions, and social welfare insurance.

CONCLUSION

Alcohol abuse and alcohol dependence are costly to the United States in resources used for care and treatment of persons suffering from these disorders, lives lost prematurely, and reduced productivity. Data show clearly that the measurable economic costs of alcohol abuse continue to be high.

(SEE ALSO: Accidents and Injuries from Alcohol; Alcohol and AIDS; Cancer, Drugs, and Alcohol; Complications; Crime and Drugs; Drug Interactions and Alcohol; Social Costs of Alcohol and Drug Abuse)

BIBLIOGRAPHY

AMERICAN PSYCHIATRIC ASSOCIATION. (1987). Diagnostic and Statistical Manual of Mental Disorders-3rd edition-revised. Washington, DC: Author.

PARKER, D. A., & HARFORD, T. C. (1992). The epidemiology of alcohol consumption and dependence across occupations in the United States. Alcohol Health & Research World, 16(2), 97-105.

RICE, D. P., KELMAN, S., & MILLER, L. S. (1991). The economic cost of alcohol abuse. Alcohol Health & Research World, 15(4), 307-316.

RICE, D. P., ET AL. (1990). The economic costs of alcohol and drug abuse and mental illness: 1985. Report submitted to the Office of Financing and Coverage Policy of the Alcohol, Drug Abuse, and Mental Health Administration, U.S. Department of Health and Human Services. DHHS Pub. No. (ADM)90-1694. San Francisco: Institute for Health & Aging, University of California.

SHULTZ, J. M., RICE, D. P., & PARKER, D. L. (1990). Alcohol-related mortality and years of potential life lost—United States, 1987. Morbidity and Mortality Weekly Report, 39(11), 173-178.

WILLIAMS, G. D., ET AL. (1987). Demographic trends, alcohol abuse and alcoholism, 1985-1995. Alcohol Health & Research World, II (Spring), 80-83, 91.

HARWOOD, HENRICK, FOUNTAIN, DOUGLAS, & LIVERMORE, GINA. (1998). The Economic Costs of Alcohol and Drug Abuse in the United States, 1992. National Institute on Drug Abuse & National Institute on Alcohol Abuse and Alcoholism. Bethesda, Maryland.

DOROTHY P. RICE

REVISED BY FREDERICK K. GRITTNER