Shocking Statistics on the Cost of Substance Abuse

Every year, our economy absorbs the cost of drug and alcohol abuse as well as the cost of substance abuse treatment for addiction. Just how much money are we talking about?

Earlier this year, CNNMoney released a mind-boggling report, stating that the cost of prescription drug abuse is estaimated at more than $70 billion.

Approximately, $42 billion of that 70 billion is lost in productivity with another $8.2 billion coming from criminal justice costs. And addicts who shop around for doctors cost insurers $10,000-$15,000 apiece.

If we apply these numbers to medicare, we’re talking about major taxpayer dollars–your money, my money.

Conclusion? Each and every person in the United States is paying for the consequences of drug and alcohol addiction.

Yet these numbers barely scratch the surface for the overall cost of addiction. What does drug and alcohol abuse cost us economically? And is it worth the expense?

Economic and Societal Cost of Drug and Alcohol Abuse

for the Nation

Substance abuse, addiction and its consequences cost our nation nearly $500 billion in 2005, according to a report released by the National Center on Addiction and Substance Abuse. Keep in mind this amount does not mean we’re pouring $500 billion dollars into substance abuse treatment services. Rather, this number attempts to quantitfy the effects of drug and alcohol abuse in our nation and how much that is costing us.

And every little thing has its toll on the budget. Take incarcerations, for example.

Approximately, one-quarter of the 2 million people (500,000) in American prisons or jails have been convicted of a drug offence. Since it costs roughly $67 to incarcerate a person for one day, then our nation spends about $8 billion a year on drug-related incarcerations.

for California

California spends almost $44 billion a year, according to a 2005 report from the California Department of Finance. This estimation includes factors such as

  • loss of productivity
  • health care
  • substance abuse prevention programs
  • criminal justice programs

A more recent study (from 2011) concludes that California spent about $60 million dollars, housing marijuana offenders behind bars. (On average, each inmate cost about $45,000 yearly.)

Economic and Societal Benefits of Substance Abuse Treatment

for the Nation

Treatment benefits reach more than just the addict, impacting society as a whole, from public safety to improved quality of life.

Studies have proven that every $1 spent on treatment can save the nation up to $7 in benefits such as

  • fewer medical costs
  • decreased crime
  • increased employment
  • less money spent on housing inmates

    Studies have consistently shown that comprehensive drug treatment works. It not only reduces drug use but also curtails criminal behavior and recidivism. Moreover, for drug-abusing offenders, treatment facilitates successful reentry into the community.”

    -Dr. Nora D. Volkow, director of the National Institute on Drug Abuse

for California

California has already taken huge steps toward substance abuse treatment, as evidenced by the the passing of Proposition 36, or the Substance Abuse and Crime Prevention Act of 2000. The purpose of the program was to send those charged with drug or alcohol-related crime to treatment instead of jail.

And the efforts have paid off. Or rather, the treatment has payed off.

Five years after Proposition 36 was put into effect in California,

  • the number of drug treatment facilities rose 26%
  • the rate of people incarcerated for drug possession in the state dropped by 34.3%
  • violent crime rate dropped by 11.2%

In the first year alone, a cost analysis done by the University of California showed that California saved

  • a minimum of $2.50 for every dollar spent on treatment
  • $4 per person who completed treatment, and
  • a total of $173 million in savings to the California government.

From 2000 to June of 2006, the state saved more than $350 million by using drug treatment as an alternative to prison and $62 million in jail costs. Altogether California saved a total of $412 million on prison and jail operating costs alone over six and a half years, according to estimates by the Justice Policy Institute.

Is it Worth it?

If you’re worried about spending too much on an alcohol or a drug treatment center for yourself or your loved one–realize that, either way, you’re paying for this addiction. The longer the addiction lasts, the more the economy (and your tax payer dollars) shoulder the financial, economical, and societal cost of the addiction.

And if it’s true that for every $1 spent on treatment, the economy realizes $7 worth of benefits, then economically-speaking, you’re better off to quit paying for the cost of addiction via tax dollars and instead invest in quality treatment center that will give you that $7 return on your investement.

Of course, this doesn’t even begin to calculate the relationship and recovery benefits.