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Constance M. Horgan, Sc.D., Institute for Health Policy, Brandeis University

Substance abuse places an enormous burden on American society. The total economic cost of alcohol, tobacco, and illicit drug abuse on the U.S. economy is enormous – with one estimate for 1990 in excess of $238 billion. This means that it costs every man, woman, and child in this country nearly $1,000 annually to pay for unnecessary health care, extra law enforcement, auto accidents, crime, and lost productivity resulting from substance abuse.

Although specific cost estimates vary across studies because of differences in underlying assumptions and definitions, all show substantial economic costs. It is a burden that affects all of society . . . both those who abuse alcohol, tobacco, and illicit drugs, and those who do not. A very small proportion of costs are for the actual rehabilitative treatment of the substance abuse. Other costs are more hidden and include the costs of medical care for related illnesses (for example, cirrhosis, cancer, heart disease, and traffic injuries), productivity losses caused by premature death and inability to perform usual activities at the workplace and within the home and school, and costs related to crime, destruction of property, and other losses.

Alcohol, tobacco, and illicit drugs each contribute substantially to the total economic burden of substance abuse, although the pattern of cost for each substance is different. The costs associated with each substance are described below. These national estimates for 1990 are based on the work of Dorothy Rice and are reported in Substance Abuse: The Nation ' s Number One Health Problem, prepared by Brandeis University for the Robert Wood Johnson Foundation.

The accompanying charts for each of the three substances use consistent definitions and methods. Deaths refer to the present value of future lost productivity due to premature death. Illness includes the present value of lost productivity due to illness or injury. Medical costs include direct expenditures both for treating substance abuse and treating the problems associated with substance abuse. AIDS attributable to drug abuse and fetal alcohol syndrome are included as separate categories. Other related costs include both direct costs such as crime and motor vehicle crashes, and indirect costs, such as victims of crime and costs of incarceration.

Costs of Alcohol Abuse

The total bill to the Nation for alcohol abuse is estimated to have been $99 billion in 1990. Productivity losses associated with premature deaths, such as in motor vehicle accidents, account for 34 percent of total costs, while the productivity losses related to illness resulting in inability to work accounted for 37 percent of the total. Direct costs to the health care system accounted for 11 percent of the total, with another 2 percent related to the custodial care for those with fetal alcohol syndrome. Other related costs represent only 16 percent of the total and largely reflect losses associated with fires and other forms of property loss.

Costs of Drug Abuse

The economic cost of drug abuse was $67 billion in 1990. Over two-thirds of the total costs of drug abuse are accounted for by other costs, primarily related to losses from crime and the costs of incarceration. Deaths and illness costs are a relatively small proportion, together accounting for only 17 percent of total costs. Medical costs are less than 5 percent. However, the costs associated with AIDS represent almost 10 percent of the total and will probably continue to increase given the role that drug abuse plays in fueling the AIDS epidemic.

Costs of Smoking

Preliminary estimates for 1990 place the cost of smoking at $72 billion. Premature death represents the largest component of total costs for smoking, accounting for 63 percent. The burden to the health care system in terms of direct medical costs is also substantial, accounting for 28 percent of the total cost.

Total Costs to Society

The total costs of substance abuse to American society are substantial, swelling the costs of the broader medical care system and stretching into increased other " hidden" costs for the criminal justice system, families, and the workplace. The major burden of alcohol abuse relates to productivity losses associated with illness and death. Crime plays the major role in drug-related costs. For smoking, the most significant losses are associated with premature death.

Substance abuse problems are preventable; thus, many of the costs of substance abuse to American society are preventable costs. The costs associated with direct treatment of substance abuse are relatively small when compared with the cost burden to society of not treating these problems.

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