Substance use disorders cost health plans $15K per enrollee: 6 ways to cut costs

The findings of a major new study on the costs of substance use disorder (SUD) haven’t gotten much play, but they are hard to ignore.

An economic evaluation study, carried out by the Centers for Disease Control and Prevention (CDC) researchers and published in the JAMA Open Network, shows that SUDs cost employers and health plans a minimum of $35 billion annually. This doesn’t include the costs of absenteeism, presenteeism, and job retention, nor the significant underreporting and under-treatment of SUDs in the workplace.

CDC researchers, in one of the largest studies of its kind to date, looked at 162 million non-Medicare eligible enrollees with employer-sponsored health insurance (ESI). Of those, 2.3 million had an SUD diagnosis, and the annual minimum attributable cost to employers and health plans was $35 billion. That results in an annual cost to businesses and payers of $15,640 per affected enrollee, with the most costly SUDs identified as alcohol-related disorders ($10.2 billion annual cost) and opioid-related disorders ($7.3 billion annual cost).

And even though $35 billion and $15,640 per enrolled employee are big numbers, those figures are likely much higher. Why? Underreporting.

Shedding light on the problem

Study authors revealed that although only 1% of the ESI population had an SUD diagnosis (which translated into the $35 billion cost), some 11% of workers self-reported an SUD. This suggests—according to the authors—that “the medical cost that employers and their health insurance payers face is likely far higher than reported here.” This is also consistent with—and further validation of—data from the 2019 National Survey on Drug Use and Health indicating that only 1 in 10 people (age 12 and older) with a substance use disorder actually received any treatment.

Related: Recent federal actions significantly enhance access to substance use disorder treatment

Researchers have looked at substance use in numerous populations, but until now, no one has done a thorough study on the costs for employers specifically. CDC researchers are calling out the $15,000+ number as the minimum annual cost of substance misuse within a population while clearly emphasizing the potential hidden costs of underreported SUDs.

Organizations often have a feeling that something’s not right, or things don’t add up when looking at behavioral health costs. “Something’s there, but we’re just not seeing it,” they might say. With this powerful new study, employers and health plans now have good, reliable, independent research data to shed more light on the SUD challenge.

At little to no cost, organizations can boost outreach efforts and dig further into their own data to find underreported SUDs, which could be hiding in other health care claims such as depression or hypertension. By focusing on substance use disorders, employers and health plans can lower health care costs, increase productivity, and reduce safety risks, helping employees and their dependents improve their physical and mental health.

The impact of stigma

As the study authors conclude, “employers can take action by developing workplace-supported prevention, treatment, and recovery programs.” One of the most important avenues for achieving cost savings in the face of rising costs is by addressing one of the major barriers to SUD care and treatment: stigma.

I have written previously about reducing stigma in the workplace. With the added CDC data and the finding of significant SUD underreporting, it’s more important than ever for employers to take the initiative. While each industry is different, measures that most organizations can effectively take today include:

1. Educating employeesabout acceptance and informing them about benefits and policies related to mental health issues; SUDs; and diversity, equity, and inclusion.
2. Supporting an open dialogueabout mental health and related issues such as diversity and addiction. Part of what keeps stigma around is avoidance of the topic, either from those in recovery or from those needing or seeking treatment.
3. Using non-stigmatizing language, both verbal and written.
4. Focusing on behavioral health.Employees perceive behavioral health benefits to be just as important as more traditional physical health benefits and believe that employers have a responsibility to help them manage their mental health.
5. Promoting a recovery-friendly workplacethat creates a safe, welcoming, anti-stigma work culture. This includes recovery from mental health issues, from SUDs, and from challenges faced in all areas of life.
6. Top-down leadership support.Management and executive leadership sharing stories of recovery can have a significant impact on employees who might otherwise be afraid to talk about recovery experiences or seek treatment.

Yes, cost savings are important. But it all starts with transparent, effective communication and education from benefits managers and executive leadership. As employers seek to ensure their point solutions and other wellness offerings are truly helping employees, we now have even more data and resources to help ensure benefits and solutions are impacting costs and making a difference.

Yusuf Sherwani, M.D. is the CEO and co-founder of Quit Genius, the world’s first technology-enabled digital clinic for multiple addictions.