The Cost of Untreated Alcohol and Other Drug Problems

by Alex Brumbaugh

© 1998


Alcoholism and other drug problems cause immeasurable pain and suffering for individuals and families. The following is a summary of some of the efforts that have been made to determine tthese financial costs to society and communities. The costs include:

The Brown University Center for Alcohol and Addiction Studies (1) reports that:

According to a study by Columbia University’s Center on Addiction and Substance Abuse (2), addictions of all kinds cost New York City $20 billion in 1994, 9% of its gross city product.

A two-year study by the State of California Department of Alcohol and Drug Programs (3) showed that savings to taxpayers, mostly from avoidance of crime-related costs, outpaced the public cost of treating addicts by a 7-1 margin.

A cocaine study by the Rand Corporation’s Drug Policy Research Center (4) provides evidence that for every dollar invested in drug treatment, to get comparable results we would have to spend:

According to Brandeis University (5), alcohol and drug abuse cost over $166 billion each year in lost productivity, law enforcement, criminal case processing, treatment and health care costs.

According to the National Institute on Drug Abuse (6), one year of methadone treatment for heroin addiction costs $3,500. One year of incarceration costs $39,600. One year of untreated addiction costs society an estimated $43,200.

Treatment works: A comparison study (7) of drug use one year before admission to treatment and one year following discharge from substance abuse treatment shows that:

Results from a CSAT funded treatment evaluation (8) shows that:

More than 70 conditions requiring hospitalization (including cancer, heart disease, and HIV/AIDS) have risk factors associated with substance abuse; and $1 of every $5 Medicaid spends on hospital care is attributable to substance abuse or a related condition (9).

On the average, untreated alcoholics generally incur general health care costs that are at least 100% higher than those of the non-alcoholic. In the 12 months before treatment, the alcoholic's costs are close to 300% higher. (10).

Substance abuse treatment reduces overall hospital admission rates by at least 38%. Hospital admissions for drug overdose decreased by 58% among those who had been treated (11).

A Minnesota study found that by providing drug treatment services, the number of hospitalizations decreased by 5% in the first six months following treatment, producing $22 million in annual health care savings for 18,000 clients (12)

Blue Cross/Blue Shield found that families' health care costs dropped by 50% after treatment, showing a reduction from $100 a month in the two years prior to treatment to $13.34 per month in the fifth year after treatment (13).

Alcohol Health & Research World reported findings that 50 percent of the costs of alcohol and drug abuse treatment are offset within one year by subsequent reductions in medical costs by the affected family, and not just the primary patient (14).

In an ideal world, if it was learned that any individual living in your local community was having a problem with alcohol or other drugs (AOD), your local political jurisdiction would respond to that problem with dispatch and "leave no stone unturned" until successful recovery was achieved - both for that person and for his or her family no matter what the cost. Not only is the technology available to do that, and not only is it the humane and decent and common sense thing to do, but it is also in the inherent economic self-interest of the jurisdiction to do that. Failing to do it, the jurisdiction will endlessly spend your tax dollars on all of the negative consequences of AOD problems, including the costs of public safety, lost productivity, and higher criminal justice, public health, social service costs.

There are two primary reasons why no jurisdiction in the United States follows this common sense path:

First, our elected officials may well understand the problem and know that there is a solution and want to do something intelligent about it, but they do not perceive that they have the political constituency to do so. Our governments are "representative," taking action only on issues that they believe represent the interests or wishes of the special interest groups and voters who put them in office. The common perception of elected officials at every level is that the "will of the people" is that anyone with AOD problems should be be punished. There are many polls and recent voter initiatives that indicate that this is not the case, but all politicians are conservative about taking risks, and intelligent AOD policies will not be enacted until the elected officials are presented with a strong, organized, and articulate constituency of voters, organizations, and campaign donors who favor such policies.

Second, there is a general feeling of hopelessness in our public consciousness about AOD problems. Many people - including policy makers, family members of people with problems, and alcoholics and drug addicts themselves - don't think there is really a solution, don't think that recovery is really possible, and/or don't believe that treatment really works. Successful addiction recovery in the lives of millions of people and their families is one of our nation's "best kept secrets" - largely because of the stigma associated withAOD problems and the tradition of anonymity in the recovery culture. So - even though the scientific research is indisputable that we are just as successful at treating addiction as we are at treating other chronic illnesses such as hypertension, asthma, and diabetes - the misperception endures that AOD problems are just too big and complicated to solve, so we deny them and continue to throw money at the symptoms instead of addressing the problem.


1. David C Lewis & Eric Klineberg. "Substance Abuse Benefits Make Dollar Sense." Center for Alcohol and Addiction Studies, Brown University, September, 1993.

2. "Substance Abuse and Urban America: its Impact on an American City, New York." Center on Addiction and Substance Abuse, 152 West 57th Street, New York, NY 10019.

3. "Evaluating Recovery services: The California Drug and Alcohol Treatment Assessment." State of California, Department of Alcohol and Drug Programs, 1700 K Street, Sacramento, CA 95814.

4. C. Rydell and S. Everingham. "Controlling Cocaine: Supply Versus Demand Programs." Drug Policy Research Center, Rand Corporation, PO Box 2138, Santa Monica, CA 90407.

5. Institute for Health Policy, Brandeis University. Substance Abuse: The Nation's Number one Health Problem. Robert Wood Johnson Foundation, Princeton, NJ, 1993.

6. NIDA, Department of Health and Human Services. Drug abuse treatment: An economical approach to addressing the drug problem in America, 1991.

7. Tabbush, V. The effectiveness and efficiency of publicly funded drug abuse treatment and prevention programs in California: A benefit-cost analysis.UCLA, March 1986.

8. National Treatment Improvement Evaluation Study, Center for Substance Abuse Treatment, 1996.

9. Center on Addiction and Substance Abuse, Columbia University. The Cost of Substance Abuse to America's Health Care System,1996.

10. The Rutgers Study: Socioeconomic Evaluations of Addictions Treatment, 1992.

11. Evaluating Recovery Services (Ibid).

12. Turnure, C. Implications of the State of Minnesota's Consolidated Chemical Dependency Treatment Fund for Substance Abuse Coverage Under Health Care Reform. Testimony presented to the US Senate Labor and Human Resources Committee. Washington, D.C., March 8, 1994.

13. Holder, H.D. and Hallan, J.B. Impact of alcoholism treatment on total health care costs: A six year study. Advances in Alcoholism and Substance Abuse. 1986:6, 1-15.

14. Luckey, J. Justifying alcohol treatment on the basis of cost savings: The offset literature. Alcohol Health & Research World. National Institute of Alcoholism and Alcohol Abuse. 1987: Fall:8-15.

See also Hazelden's "Public Policy - Social & Criminal Impact"

About Alex Brumbaugh

Why Add Acupuncture to your Treatment Program? FAQs

Articles Index

Stillpoint Press Home