The Economic Cost of Prescription Drug Abuse in - Montana Board

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The Economic Cost of Prescription Drug Abuse in - Montana Board

The Economic Cost of PrescriptionDrug Abuse in MontanaTable of ContentsACKNOWLEDGEMENTS ..................................... 2EXECUTIVE SUMMARY ........................................ 3INTRODUCTION AND OVERVIEW ................ 4PRESCRIPTION DRUG ABUSE DEFINED ........ 5PRESCRIPTION DRUG ABUSE IN THEUNITED STATES .................................................... 5PRESCRIPTION DRUG ABUSE INMONTANA ............................................................... 7COSTS OF PRESCRIPTION DRUG ABUSE ..... 9CONCLUSION ........................................................ 15AcknowledgementsA number of organizations and Montana state agencies provided crucial information for this study, including:Montana Board of Crime Control; Montana Department of Public Health and Human Services; MontanaDepartment of Corrections; Montana Department of Justice; Forensic Science Division; Montana Blue Crossand Blue Shield; Montana Hospital Association; and the Montana Pharmacy Association.The Bureau of Business and Economic Research2


The Economic Cost of PrescriptionDrug Abuse in MontanaEXECUTIVE SUMMARYThe Bureau of Business and Economic Researchconducted this study to estimate the economic costsassociated with prescription drug abuse in Montana.This study takes an economy-wide perspective andattempts to quantify the cost to Montana’s economy interms of five dimensions:• law enforcement costs,• treatment and health care costs,• child and family services costs,• loss in economic productivity among prescriptiondrug abusers, and• costs associated with fraudulently obtainingprescription drugs.The fifth dimension about fraudulently obtainingprescription drugs could not be quantified at this time.Although there are numerous anecdotal stories reportedby insurance companies, Medicaid authorities, andother investigators on large quantities of fraudulentlyobtained prescription drugs, there is not sufficientdata to assess its costs to these insurers. Some theoriesare that prescription drug abusers may acquire theirdrugs by filing fraudulent insurance and/or Medicareand Medicaid claims, or even by approaching medicalproviders on feigned illnesses and injuries to obtainprescription drugs.Table 1Estimated Annual Costs of PrescriptionDrug Abuse in MontanaCategoryAnnual CostsLaw Enforcement $3,344,000Treatment and Health Care 7,071,000Child and Family Services 5,608,000Economic Productivity 3,594,000FraudInsufficient dataTOTAL $19,617,000Economic costs are emphasized because they providea means for placing the problem into perspectiverelative to other priorities that compete for our attentionand resources. But no dollar figure truly reflects theloss families feel when loved ones’ lives are impactedby prescription drug abuse. Thus, even the mostcomprehensive economic assessment can be only onepart of a complete evaluation of the problem.In Montana, estimates show that there are between43,000 and 51,000 prescription drug abusers, and theyaccount for 4 to 5 percent of the state’s population.There are between 5,700 and 6,900 prescription drugabusers 12-to-17 years of age. They represent between7 and 9 percent of the total number of persons ages 12-to-17 years old in Montana.Prescription drug abuse has only recently evolvedinto an important public policy issue. New data systemsare being created, and existing data systems are beingmodified to incorporate and measure the various aspectsof prescription drug abuse. These systems are not yetcomplete, and there are frequently significant gaps in theinformation. Despite these shortcomings, this study didmanage to quantify many of the most significant aspectsof prescription drug abuse.Table 1 summarizes the costs associated withprescription drug abuse in Montana. New costcategories may be added or existing estimates modifiedas new or more reliable information becomes available.As summarized in Table 1, the annual costs associatedwith prescription drug abuse in Montana are almost $20million per year. This should be considered a minimumfigure because certain costs could not be quantified,and other cost estimates are incomplete becausecomprehensive data were not available. To view thiscost in another perspective, Montanans would have atleast $20 million a year available for other uses if theseresources were not lost to society from prescriptiondrug abuse.The Bureau of Business and Economic Research3


The Economic Cost of PrescriptionDrug Abuse in MontanaINTRODUCTION AND OVERVIEWPrescription drug abuse is evolving into one of themost important drug issues in the United States and inMontana. There are currently more than three times asmany prescription drug abusers as cocaine users, andprescription drug abusers outnumber hallucinogen usersby more than four to one. While the number of mostdrug and substance abusers has been stable or evenfalling, the number of prescription drug abusers is onthe rise.Prescription drug abuse is not the same as the abuseof other drugs and substances. Prescription drugs arelegitimately used to treat medical conditions. Further,reducing abuse is not simply a matter of restrictingsupply by targeting dealers and other illegal suppliers.Most prescription drug abusers obtain their suppliesfree from friends and relatives or from a prescriptionprovided by a doctor.This study takes an economy-wide perspective andattempts to quantify the cost to Montana’s economyof these unwanted and undesirable consequences ofprescription drug abuse. We ask the question, whatresources would be available to Montanans—thatcould be used on other priorities—if there were noprescription drug abuse? In answering this question,three goals are accomplished.First, dollar estimates give some perspective of themagnitude of the problem relative to the other issuesand problems that command attention from society.The negative consequences of prescription drug abuseare not obvious. By quantifying these costs in monetaryterms, these consequences are put into perspective inmonetary terms.The Bureau of Business and Economic Research4


The Economic Cost of PrescriptionDrug Abuse in MontanaSecond, the society-wide consequences ofprescription drug abuse go well beyond dollar values.By systematically identifying the complex relationshipsbetween prescription drug abuse and economic welfare,the true impact on Montana businesses, governments,taxpayers, and families is better understood.Finally, this report is the first attempt to providea comprehensive picture of prescription drug abusein Montana. National and state data from a numberof sources are examined to provide estimates of thenumber of abusers and the related economic costs.Future research may refine these figures as moreprescription drug use data are added to statisticalreporting systems.Economic costs are emphasized because they providea means for placing the problem into perspective relativeto other priorities that compete for our attention andresources. But no dollar figure truly reflects the loss feltby loved ones when lives are impacted by prescriptiondrug abuse. Thus even the most comprehensiveeconomic assessment can be only one part of acomplete evaluation of the problem.PRESCRIPTION DRUG ABUSE DEFINEDPrescription drug abuse is using a prescription drugthat was not prescribed for you or was taken only for theexperience or feeling it caused. This definition includestwo different aspects of prescription drug abuse.The first is taking drugs that were obtained throughfraud, theft, or means other than a valid prescription.The second is taking drugs obtained through a validprescription only for the experience or feeling it causedand not to relieve the symptoms for which is wasprescribed. Prescription drug abusers refer to those whohave abused the drugs within a specified period. Becausethe reporting sources use a variety of time periods(within 30 days, during the last year, any time in one’slifetime) the reference period for abuse will always beidentified.Abused drugs include pain relievers, tranquilizers,stimulants, and sedatives. Pain relievers account for mostof the abuse, and a single drug called Vicodin is abusedmost often. About 75 percent of prescription drugabusers are poly-substance abusers; they either drinkexcessively and/or use illicit drugs as well as prescriptiondrugs. Of prescription drug abusers, about 64 percentalso abuse alcohol and 54 percent also abuse illicit drugs(such as cocaine). Approximately 25 percent abuse onlyprescription drugs (National Center on Addiction andSubstance Abuse at Columbia University 2005 p. 3).A standardized definition of the exact drugs tobe included in prescription drug abuse does not yetexist, perhaps because of the recent recognition ofthe problem and the limitations of the data systems.Terms such as “abuse of pharmaceuticals,” “narcoticprescriptions abuse,” and “prescription drug abuse”appear in a variety of federal, state, and other reportswith little or no definition of the exact drugs included.Later in this report a list of drugs will be presented,and this definition will be used when querying Stateof Montana substance abuse treatment data. Othertabulations and reports will identify the drugs includedor excluded to the extent possible.PRESCRIPTION DRUG ABUSEIN THE UNITED STATESMore people report abusing prescription drugs thanthe combined number abusing cocaine, hallucinogens,inhalants, and heroin. Prescription drug abuse poses aunique challenge because the legitimate use of thesedrugs to treat medical conditions needs to be balancedThe Bureau of Business and Economic Research5


The Economic Cost of PrescriptionDrug Abuse in Montanawith the prevention, education, and enforcementassociated with managing and reducing the abuse of thesame substances.Reliable data on the extent of prescription drugabuse and its trend over time are difficult to obtain.The number and characteristics of abusers are derivedmostly from self-reported sources (i.e. surveys). Becauseabuse is self-reported, there is always the possibility thatrespondents understate the amount of drugs taken.In addition, there are no reliable figures concerninggrowth in the number of abusers over time becausethe appropriate questions for measuring abuse haveonly gradually been devised and added to the surveys.Further, responses from a number of years are oftencombined in order to achieve statistical significance.Statistics reporting the amount of drugs producedand/or the number of prescriptions written may notrepresent abuse because they also include the legitimateuse of the substances.The federal government estimated that during 2008there were about 15.2 million persons 12 or older,roughly 6.1 percent of the population, who said theyabused prescription drugs during the past year (2008National Survey of Drug Use and Health, Table G3).About 11.9 million (4.8 percent of the population)abused pain relievers, approximately 5.1 million (2.0percent) abused tranquilizers, roughly 2.6 million (1.1percent) abused stimulants, and 621,000 (0.2 percent)abused sedatives. The fact that the sum of the individualcomponents exceeds the total indicates that manyabusers take more than one drug. If the time frame islengthened to lifetime abuse, the totals rise to nearly 52million persons, or 20.8 percent of the population.The growth in prescription drug abuse has gonehand-in-hand with the medical advancements that haveimproved the treatment of pain, mental illness, anxiety,and other ailments. For example, between 1992 and2003, the U.S. population increased approximately 13.0percent. During the same period, the number personswho said they abused prescription drugs increased 93.8percent. Even more startling is that pain medicationabuse increased 140.5 percent, tranquilizer abuseincreased 44.5 percent, and stimulant abuse increased41.5 percent.Young adults ages 12- to-17 are a vulnerable group ofprescription drug abusers. Young adults falsely believeprescription drugs are relatively safe compared to illicitdrugs purchased on the street. And for young adults,prescription drugs may serve as a “gateway” to othertypes of drug or substance abuse. About 2.3 millionteens between the ages of 12 and 17 (9.3 percent) saidthey abused prescription drugs at least once during thelast year (National Center on Addiction and SubstanceAbuse at Columbia University 2005 p. 34). Theseteenagers account for approximately 15.4 percent of allprescription drug abusers.Unlike other illicit drugs and substances, mostprescription drugs are not bought on the street or fromdrug dealers. About 53.0 percent of those abusingprescription pain relievers (which accounts for mostof the prescription drug abuse) get them from a friendor relative for free (Office of Applied Statistics, “TheNSDUH Report,” Issue 39 (2006) p. 5). Another 13percent said they got them from a prescription from onedoctor. Roughly 11 percent said they bought them froma friend or relative. Only 5 percent said they bought thepain relievers from a drug dealers or other stranger. Theremaining 18 percent said they stole the drugs or gotthem from other sources.PRESCRIPTION DRUG ABUSE IN MONTANAThe Bureau of Business and Economic Research6


The Economic Cost of PrescriptionDrug Abuse in MontanaThere are no precise statistics for the number ofprescription drug abusers in Montana. The federalgovernment estimates there are about 43,000 Montanansthat abused pain relievers in the last year (Office ofApplied Studies, National Survey on Drug Use andHealth, 2005 and 2006, Table 53). This figure is probablytoo low because it does not include tranquilizers,stimulants, and sedatives. Following the federalmethodology, but using 2002-2004 data for personsabusing any psychotherapeutic drug during the lastyear, yields an estimate of about 51,000 persons. This isprobably too high because it includes methamphetamineand a few other drugs not included in the definitionabove. It is safe to say that there are between 43,000and 51,000 prescription drug abusers in Montana, andthey account for 4 percent to 5 percent of the state’spopulation.Following the same methodology, there are between5,700 and 6,900 prescription drug abusers 12-to-17 yearsof age, accounting for 7 percent to 9 percent of thetotal number of persons 12-to-17 years old.The Prevention Needs Assessment conducted by theMontana Department of Public Health and HumanServices added a question concerning prescription druguse to its 2010 questionnaire. This survey provides anindependent estimate of prevalence rates for Montanayoung adults. The responses are summarized in Table 2.Table 2Narcotic Prescription Drug Use by Grade,Montana, 2010Lifetime Use Grade 8 Grade 10 Grade 120 Occasions 94.9% 88.2% 84.0%1-2 Occasions 2.7% 4.7% 5.1%3-9 Occasions 1.6% 4.1% 5.5%10 to 39 Occasions 0.5% 2.1% 3.5%40 or More Occasions 0.3% 0.9% 1.9%Source: Montana Department of Public Health and Human Services, 2010Prevention Needs Assessment.The percentage of students who said they usednarcotic drugs sometime in their lifetimes rose from5.1 percent in the eighth grade to 16.0 percent in thetwelfth grade. Combining all grades results in an overalllifetime prevalence rate of about 11.0 percent. Thisfigure is consistent with the one year prescription drugabuse prevalence rate of 7 percent to 9 percent derivedabove and provides corroboration of the estimate of thenumber of prescription drug abusers in Montana.Although there is significant duplication, a morecomprehensive picture of young adult drug use may beobtained by adding the responses to the sedative andstimulant drug questions, which are also included inthe Prevention Needs Assessment survey. The sedativeresponses are summarized in Table 3. The percentage ofstudents who said they used sedatives sometime in theirThe Bureau of Business and Economic Research7


The Economic Cost of PrescriptionDrug Abuse in MontanaCOST OF PRESCRIPTION DRUG ABUSEThe estimated costs associated with prescription drugabuse in Montana have been classified into five areas:1. law enforcement costs,2. treatment and health care costs,3. child and family services costs,4. economic productivity costs, and5. fraud.Prescription drug abuse is often combined withabuse of other drugs, alcohol, and other substances.The following cost data are for those cases whereprescription drugs are the sole or primary cause in theareas identified above. In the cases of joint abuse (comorbidity)of prescription drugs plus alcohol or othersubstances, it is not at all clear that the costs could havebeen avoided if there were no prescription drug abuse.For example, when the arrest records show the presenceof more than one drug, the suspect may still have beenarrested even if prescription drugs were not present.Whenever possible, the costs were calculated for thestate 2009 fiscal year, July 1, 2008 to June 30, 2009. Insome cases, data were available only for prior years.Several Montana state government data systemsprovided the basic information to calculate several ofthe cost categories. All data queries used the definitionof prescription drug abuse as defined by the MontanaDepartment of Justice. 11 Prescription drugs queried include Anesthetics, Ativan (lorazepam),Clonazepam (Klonopin, Rivotril), Codeine, Dalmane (Flurazepam), Darvon(D-Propoxyphene), Demerol (Diphenylhydantoin Sodium), Dilaudid (Hydromorphone),Halcion (Triazolam), Ketamine (Special K), Librium, Miltown (Meptobamate),non-prescription Methadone, Oxycodone/Oxycontin, Phenobarbital, Placidyl(Ethchlorvynal), Ritalin (Methylphenidate), Rohypnol (Flunitrazepam), Seconal(Secobarbital), Talwin (Pentazocine), Tranxene (Clorazepate), Tuinal (Secobarbital/Amobarbital), Ultram (Tramadol), Valium (Diazepam), Vicodin (Hydrocodone), andXanax (Alprazolam).The Bureau of Business and Economic Research9


The Economic Cost of PrescriptionDrug Abuse in MontanaLaw Enforcement CostsIllegal possession of prescription drugs is a crime.It may be a misdemeanor for small amounts or afelony, depending on the specific prescription drugand the quantity. Law enforcement costs include policeprotection, correction, judicial, and legal costs.The Montana Board of Crime Control reportsthat there were 230 arrests for illegal possession ofprescription drugs during FY 2009. There were another62 arrests for other offenses where prescription drugswere present. Total arrests for all offenses during FY2009 were 36,242. Therefore, prescription drug arrestsaccount for less than 1 percent of all arrests, or 0.80percent.Between FY 2001 and FY 2009, the MontanaDepartment of Corrections reports an average of10 prisoners were incarcerated for prescription drugoffenses. The average total prison population is about2,570. Prisoners incarcerated for prescription drugoffenses therefore constitute less than 1 percent of theprison population, 0.39 percent.There are currently no data concerning thenumber of prescription drug cases adjudicated by thejudicial system. This study assumes they are about0.60 percent of the total, roughly half way betweenthe corresponding figures for police protection andcorrections.The U.S. Bureau of the Census reports totalexpenditures by state and local governments in Montanafor police protection, corrections, and judicial and legalservices. Table 5 reports these expenditures as well asthe calculation of the portion of each attributable toprescription drug abuse. Total law enforcement costsdue to prescription drug abuse are estimated to be overTable 5Estimated Law Enforcement Costs Due to PrescriptionDrug AbuseTotal State and LocalExpenditures FY 2008Percent Due toPrescription DrugAbuseEstimated Costs Dueto Prescription DrugAbuse (Dollars)Police Protection $225,741,000 0.80 $1,806,000Corrections 196,200,000 0.39 $765,000Judicial and Legal 128,791,000 0.60 $773,000TOTAL $550,732,000 $3,344,000Source: U.S. Bureau of the Census, Annual Surveys of State and Local GovernmentFinances. (www.Census.gov accessed December 3, 2010)The Bureau of Business and Economic Research10


The Economic Cost of PrescriptionDrug Abuse in MontanaTable 6Hospital Admissions Related to Prescription DrugAbuse, FY 2009Admission TypeNumber ofAdmissionsTotal ChargesInpatient 295 $4,062,000Outpatient 307 $476,000TOTAL 602 $4,538,000Source: Montana Hospital Association.$3 million per year.One example of law enforcements costs associatedwith prescription drug abuse is illustrated by staffinglevels at the Division of Criminal Investigation (DCI),which is housed within the Montana Department ofJustice. It has 110 employees in four separate bureaus—Investigative Support, Investigations, Narcotics, andthe Law Enforcement Academy. The Narcotics Bureauhas 29 employees who initiate drug investigationsthroughout the state as well as respond to requests forassistance from local, state, federal, and out-of-state lawenforcement agencies. During FY 2009, the NarcoticsBureau conducted 467 drug investigations of which30 percent (142) were for prescription drug abuse. Thestate-funded portion of the Narcotics Bureau budget inFY 2009 was $3,182,825. Applying the 30 percent arrestfigure to the Narcotics Bureau budget yields an estimateof almost $955,000 (0.30 X $3,182,825 = $954,848)for this agency’s law enforcement costs related toprescription drug abuse.The seven Montana Drug Task Forces provide yeta second example of law enforcement costs that canbe directly attributable to prescription drug abuse. Thetask forces are funded by a combination of state andfederal sources. The Montana Board of Crime Controlcontributed $1,554,000 to support these task forcesduring FY 2009. About 12 percent of the task forces’arrests were for prescription drug abuse. Consequently,about $186,000 (0.12 X $1,554,000 = $186,480) of thestate’s contribution can be attributed to prescriptiondrug abuse.Treatment and Health Care CostsThe second cost category includes the treatment ofprescription drug abusers. These costs include bothmedical and hospital costs resulting from abuse as wellas the treatment costs to cure the abuse.Emergency room visits and hospital admissions.The Montana Hospital Association maintains adatabase that records the number of admissions andother information by admission code. The MontanaDepartment of Justice identified codes that are closelyrelated to prescription drug abuse. The MontanaHospital Association then provided information forthese admission codes for FY 2009. As shown inTable 6, there were 602 hospital admissions relatedto prescription drug abuse during FY 2009 with totalcharges of about $4.5 million. Inpatients (many admittedthrough the emergency department) account for 295admissions and about $4 million in total charges. Therewere 307 outpatients (mostly emergency departmentvisits) with total charges of $476,000. These costsshould be considered a minimum because prescriptiondrug abusers may have been admitted under other codes.The Bureau of Business and Economic Research11


The Economic Cost of PrescriptionDrug Abuse in MontanaSubstance Abuse Treatment ProgramsThere are 60 substance abuse treatment centers inMontana. As shown in Table 7, they include for-profit,non-profit, and government sponsored operations. OnMarch 31, 2009 (the reporting date provided by the U.S.Department of Health and Human Services), there were3,602 clients in treatment at these centers.The Montana Department of Public Health andHuman Services reports that during FY 2009 therewere 347 prescription drug abuse admissions intothese treatment centers. These include duplicatedadmissions—the same person being admitted multipletimes. Twelve admissions were for persons 17 years oldand younger, and 293 admissions were people 18 yearsold or older.Addiction and drug abuse treatment programsvary significantly in terms of philosophy and practice.They include intensive inpatient programs as well asless rigorous outpatient treatment. A publicly-fundedtreatment program provides a middle of the roadaverage for treatment costs related to prescriptiondrug abuse. Treatment costs average $208 per day, foran average stay of about 35 days. This results in totaltreatment costs of about $7,300 per treatment. Asshown in Table 9, the estimated yearly costs for treatingprescription drug abusers is over $2.5 million per year.Child and Family Services CostsThe Montana Department of Public Health andHuman Services, Child and Family Services Division,administers programs to protect children and youthsfrom abuse, neglect, and abandonment. The Child andFamily Services Division reports that approximatelyTable 7Substance Abuse Treatment Facilities,MontanaTable 8Admissions into Substance Abuse Treatment Centers,Montana FY 2009Facility OperationsFacilitiesClients in Treatment onMarch 31, 200917 years oldand Younger18 years oldand OlderTotalPrivate non-profit 39 1,995Private for-profit 6 190Local Government 4 168State Government 2 121Federal Government 3 116Tribal Government 6 1,012TOTAL 60 3,602Source: U.S. Department of Health and Human Service, Office of AppliedStatistics, National Survey of Substance Abuse Treatment Services, Montana 2009Prescription Drug Abuse 12 335 347All Clients 693 6,750 7,443Source: Montana Department of Health and Human Services, Substance AbuseManagement System, special tabulation.Table 9Estimated Cost of Treatment at Substance AbuseTreatment CentersNumber ofAdmissionsCost per TreatmentTotal Yearly Costs347 $ 7,300 $2,533,000The Bureau of Business and Economic Research12


The Economic Cost of PrescriptionDrug Abuse in Montana16.5 percent of the children in foster care have parentswhose misuse of prescription drugs was considered afactor contributing to the child’s placement in fostercare. However, the parents of these children may havebeen involved with other drugs as well. State providedfunding support for the Child and Family ServicesDivision was $34 million in FY 2009. As shown in Table10, annual foster care costs attributable to prescriptiondrug abuse are approximately $5.6 million.Economic Productivity CostsConventional wisdom would suggest that addictionand drug abuse reduces economic productivity andwages. But the scientific literature examining therelationships between drug use and work behavioris inconclusive. Consequently, this study assumes avery narrow view of economic productivity costs andestimates only those costs associated with lost incomedue to premature deaths and the cost of time spent intreatment programs.Premature DeathThe Forensic Science Division in the Department ofJustice estimates there were 117 deaths in FY 2009 thatcan be attributed to prescription drug abuse. This figureonly includes those deaths for which prescription drugswere ruled to be the primary cause of death. There wereTable 10Estimated Foster Care Cost Due to Prescription DrugAbuse, FY 2009Percent of Childrenin Foster Care Dueto Prescription DrugAbuseState Share of Childand Family ServicesExpendituresEstimated Yearly Costof Foster Care16.5 $33,985,521 $5,608,000Source: Montana Department of Public Health and Human Services, Child andFamily Services Divisionnumerous other deaths where prescription drugs werepresent, but not ruled the primary cause of death.On average, about 65 percent of adult Montanans arein the labor force. Applying this figure to the number ofprescription drug abuse related deaths yields an estimateof 76 deceased persons who otherwise would have beenin the labor force. Average annual wages and salaries fornonfarm workers in Montana are $33,000. Therefore,as shown in Table 11, the lost income associated withpremature prescription drug related deaths is $2.5million per year. But this figure assumes that only oneyear of working life is lost due to prescription drugabuse. Particularly for younger workers, with manyproductive years of work life remaining, total lostincome to prescription drug related premature deathswould amount to tens of millions of dollars in presentTable 11Estimated Lost Income Due to Premature Death ofPrescription Drug AbusersDrug DeathsLabor ForceParticipation RateEstimatedWorkersAverage NonfarmWages and SalariesEstimated AnnualLost Income117 65% 76 $33,000 $2,508,000The Bureau of Business and Economic Research13


The Economic Cost of PrescriptionDrug Abuse in Montanavalue terms.Lost income Due to Time in TreatmentA second cost related to productivity is foregonework income due to time spent in the hospital or inprescription drug abuse treatment programs. Estimatedlost working days take into account three considerations:days that fall on weekends (2 out of 7), the 35 percentof the adult population who are not in the labor force,and the value of each lost work day ($174, the dailyequivalent of the $33,000 average per year wage fornonfarm jobs in Montana).The Montana Hospital Association reports 996 totaldays in the hospital for the 295 inpatient admissionsreported in Table 6. For the 307 outpatients reported inTable 6, we assume each outpatient admission representsone lost day due to the hospital visit. Finally, dayslost due to time in treatment programs total 12,145,calculated by taking the number of admissions (347,reported in Table 8) multiplied by the average numberof days per admission (35). The calculations summarizedin Table 12 yield an estimate of $1.1 million per year inlost income from days spent in the hospital or treatmentprograms for prescription drug related abuse.FraudUnlike the abuse of heroin and other drugs that haveno accepted medical use, prescription drug abuse canbe financed by private insurance and public programsincluding Medicare Part D and Medicaid. For example,prescription drug abusers may be able to acquireprescription drugs illegally by filing fraudulent insuranceand/or Medicaid claims, seeking treatment from medicalpractitioners for feigned ailments and injuries, andmany other fraudulent pursuits. To some extent, certaincosts associated with prescription fraud are included inother sectors—such as emergency room visits. Thereare numerous anecdotal stories reported by insurancecompanies, Medicaid authorities, and fraud investigatorsconcerning large amounts of fraudulently obtainedprescription drugs attributable to a few abusers.Unfortunately, these case studies do not provide themore general information needed to make an estimateof total fraud losses. Should this information becomeavailable, this section could be expanded.Table 12Estimated Lost Income Due to Hospitalization or Treatment Programfor Prescription Drug AbuseTypeTotal DaysWork WeekAdjustmentLabor ForceParticipationRateEstimatedLost WorkingDaysEstimatedAnnual LostIncomeHospital inpatient 996 71.4% 65% 462 $80,000Hospital outpatient 307 71.4% 65% 142 $25,000Substance AbuseTreatment Program12,145 71.4% 65% 5,636 $981,000TOTAL 13,448 71.4% 65% 6,241 $1,086,000The Bureau of Business and Economic Research14


The Economic Cost of PrescriptionDrug Abuse in MontanaCONCLUSIONPrescription drug abuse is emerging as the numberone drug problem in both the United States andMontana. There are little reliable data on even the mostbasic facts about prescription drug abuse. But new datasystems are being developed, and existing systems arebeing modified so that future research will benefit frommuch better information.There are between 43,000 and 51,000 prescriptiondrug abusers in Montana, and they account for 4 percentto 5 percent of the state’s population. Between the agesof 12 and 17, there are from 5,700 to 6,900 prescriptiondrug abusers, representing between 7 percent and 9percent of total in these age categories. Young adults area vulnerable group of prescription drug abusers becausenot only may they believe these drugs are relatively safebut prescription drugs may also serve as a gateway toother drugs or substance abuse.The estimated cost of prescription drug abuse inMontana is about $20 million per year. This should beconsidered a minimum figure because it includes onlythose items for which reliable data was available. Thevarious components of this total are summarized inTable 13. These estimates suggest that Montanans wouldhave over $19 million per year in resources which wouldbe available for other uses if there were no prescriptiondrug abuse.Table 13Estimated Annual Costs of Prescription Drug Abusein MontanaCategoryAnnual CostsLaw Enforcement $3,344,000Treatment and Health Care $7,071,000Child and Family Services $5,608,000Economic Productivity $3,594,000FraudInsufficient dataTOTAL $19,617,000The Bureau of Business and Economic Research15


The Economic Cost of PrescriptionDrug Abuse in MontanaSOURCESU.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration,Office of Applied Studies, Results for the 2008 National Survey on Drug Use and Health: National Findings, , 2009,Appendix G, Table G3.Under the Counter: The Diversion and Abuse of Controlled Prescription Drugs in the U.S., National Center onAddiction and Substance Abuse at Columbia University, New York, New York, 2005.Office of Applied Statistics, U.S. Department of Health and Human Services, “The NSDUH Report,” Issue 39,(2006).U.S. Department of Health and Human Services, Office of Applied Statistics, National Survey on Drug Use andHealth, 2005 and 2006.Montana Highway Patrol, “Prescription Drugs and DUI,” www.mdt.mt.gov/safety/docs/taskforce/meeting2010/sager_prescription_drugs_and_dui.pdfU.S. Department of Health and Human Services, Office of Applied Statistics, “Trends in Emergence DepartmentVisits Involving Nonmedical Use of Narcotic Pain Relievers,” The Dawn Report, June 18, 2010U.S. Department of Health and Human Service, Office of Applied Statistics, National Survey of Substance AbuseTreatment Services, Montana 2009This project was supported by Grant No. 2010-PM-BX-0016 awarded by the Bureau of Justice Assistance. TheBureau of Justice Assistance is a component of the Office of Justice Programs, which also includes the Bureau ofJustice Statistics, the National Institute of Justice, the Office of Juvenile Justice and Delinquency Prevention, theSMART Office, and the Office for Victims of Crime. Points of view or opinions in this document are those of theauthor and do not represent the official position or policies of the United States Department of Justice.The Bureau of Business and Economic Research16

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