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


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

  2. 2. 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 © CASAColumbia 2013 2
  3. 3. 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 © CASAColumbia 2013 3
  4. 4. 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 © CASAColumbia 2013 4
  5. 5. 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 © CASAColumbia 2013 5
  6. 6. Federal, state and local governments spent $467.7 billion in 2005 on substance abuse and addiction, 10.7 % of total spending © CASAColumbia 2013 6
  7. 7. 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) © CASAColumbia 2013 7
  8. 8. Coping With the Consequences 95.6% of Federal and State Substance-Related Spending Is on the Burden to Public Programs • • • • • • • • • • • © CASAColumbia 2013 Adult Corrections Juvenile Justice Courts Health Care Elementary and Secondary Education Income Support Child Welfare Mental Health Developmental Disabilities Public Safety Workforce 8
  9. 9. Little Spent on Prevention/Treatment 4.4% of Federal and State Substance-Related Spending Is in the Familiar Categories of: • • Treatment • Research • Regulation and Compliance • © CASAColumbia 2013 Prevention Interdiction 9
  10. 10. The Substance Abuse/Addiction Dollar Of every Federal and State $ spent in 2005: Research 0.4 cents Prevention/Treatment 1.9 cents Regulation/Compliance 1.4 cents Interdiction 0.7 cents Burden to Public Programs 95.6 cents 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 sciencebased interventions. © CASAColumbia 2013 10
  11. 11. 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 © CASAColumbia 2013 11
  12. 12. 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 © CASAColumbia 2013 12
  13. 13. 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 © CASAColumbia 2013 13
  14. 14. Greatest Burden in Two Areas Of Federal and State 2005 Burden Spending of $357.4 billion, 71.1% Is in Health Care and Justice System Costs • 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 © CASAColumbia 2013 14
  15. 15. Federal Burden Spending Burden of Substance Abuse and Addiction on Federal Programs by Budget Sector (Percent) Total = $229.9 Billion 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 © CASAColumbia 2013 15
  16. 16. State Burden Spending Burden of Substance Abuse and Addiction on State Programs by Budget Sector (Percent) Total = $127.5 Billion Mental Health/ Developmental Disabilities 6.4 Child/Family Assistance 7.8 Public Safety 1.4 Federal Workforce 0.5 Justice System 32.5 Education 22.4 Health Care 29.0 © CASAColumbia 2013 16
  17. 17. Local Burden Spending Burden of Substance Abuse and Addiction on Local Programs by Budget Sector (Percent) Total = $93.3 Billion Public Safety 13.7 Local Workforce 1.5 Justice System 29.2 Child/Family Assistance 8.2 Education 24.4% Health Care 23.0 © CASAColumbia 2013 17
  18. 18. Federal and State Burden Spending (2005) Health Care Justice System Child/Family Assistance Education Mental Health/DD Public Safety Workforce TOTAL © CASAColumbia 2013 ($ millions) 207,222 46,977 46,696 33,896 11,772 9,303 1,568 357,433 18
  19. 19. Other Federal and State Spending (2005) Little Spent in Familiar Substance Abuse and Addiction Categories: Prevention and Treatment ($ millions) 7,173 Research 1,604 Regulation and Compliance 5,066 Interdiction 2,638 TOTAL © CASAColumbia 2013 16,481 19
  20. 20. 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 © CASAColumbia 2013 20
  21. 21. For Every $100 Spent 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 © CASAColumbia 2013 21
  22. 22. RECOMMENDATIONS • Prevention • Treatment/Disease Management • Taxation and Regulation • Research © CASAColumbia 2013 22
  23. 23. Prevent It! • Public health information campaign • Comprehensive messages and programs aimed at children • Screenings, brief interventions and treatment referrals © CASAColumbia 2013 23
  24. 24. Treat It! • 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 © CASAColumbia 2013 24
  25. 25. Control It! • Alcohol and tobacco tax increases • Indoor smoking bans and tobacco quit lines • Increased enforcement to limit youth access to tobacco and alcohol © CASAColumbia 2013 25
  26. 26. Understand It! • Increased genetic, biological and behavioral research • Best practices • Cost/benefit studies © CASAColumbia 2013 26
  27. 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 © CASAColumbia 2013 27
  28. 28. Ending Addiction Changes Everything © CASAColumbia 2013
  29. 29. Speaker Notes 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. © CASAColumbia 2013 29
  30. 30. Speaker Notes 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. © CASAColumbia 2013 30
  31. 31. Speaker Notes 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. © CASAColumbia 2013 31
  32. 32. Speaker Notes 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. © CASAColumbia 2013 32
  33. 33. Speaker Notes 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. © CASAColumbia 2013 33
  34. 34. Speaker Notes 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 © CASAColumbia 2013 34
  35. 35. Speaker Notes 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. © CASAColumbia 2013 35
  36. 36. Speaker Notes 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. © CASAColumbia 2013 36
  37. 37. Speaker Notes 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. © CASAColumbia 2013 37
  38. 38. Speaker Notes 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. © CASAColumbia 2013 38