The Management Series

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May 2018

Large Employers See Costs for Addiction Treatment Escalate

The human toll of the nationwide opioid epidemic has been evident for several years now. But how much of a financial cost does it impose?

Researchers for the Kaiser Family Foundation wanted a better understanding of the financial impact on one very specific segment: those covered by insurance provided by large employers—nearly 31% of all Americans.

Here are some of the key findings of the Kaiser study, “A Look at How the Opioid Crisis Has Affected People with Employer Coverage”:

  • About four in 10 opiod addicts are covered by private health insurance. That’s about the same for those covered by Medicaid.
  • The frequency of prescribing opioids for those covered by large employers increased from 2004 until peaking in 2009. “By 2016, the share was even lower, at 13.6% (a 21% decline since 2009).”
  • While opioid prescriptions have gone down, the costs of treating addiction and overdoses (from both prescription and illegal opioids) have jumped dramatically for large employers. Costs increased ninefold from $300 million in 2004 to $2.6 billion in 2016.
  • “Average outpatient expenses totaled $4,695 (of which $670 was paid out of pocket) in 2016. Among those with inpatient spending on treatment for opioid misuse, average inpatient expenses totaled $16,104 (with $1,628 paid out of pocket) in 2016. On average, inpatient expenses have risen sharply, up from $5,809 in 2004.”
  • “The bulk of spending by people with large employer coverage on inpatient and outpatient treatment for opioid addiction and overdose was for employees’ children (53%) or spouses (18%), while just under a third (29%) was for employees themselves.”