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Addiction is a treatable, preventable disease, yet millions of Americans are suffering. What is worse is that even those who do not suffer from addiction still suffer from its financial impact. Beyond the decline in health and lifestyle of the individual addict, the financial effects, both personally and socially, are devastating as well. Friends and family are left to deal with debt and medical bills while taxpayers end up forking out money for health care, welfare and treatment programs.
“Addicts rationally choose their poison despite knowing that it is habit-forming and dangerous, and they do so because they expect the highs to outweigh the lows,” explain two economists, Gary Becker and Kevin M. Murphy, in a report on addiction from the University of Chicago. Addiction is an difficult topic for economists to undertake and measure, but because of the estimated $590 billion dollar price tag that addiction costs America each year, economists can’t help but take notice.
In addition, according to estimates from the Substance Abuse and Mental Health Services Administration, a combined $276 billion was spent or lost in 2005 on health care, lost productivity, premature death, crime and auto accidents relating to alcohol and drug abuse. Roughly 75 percent of all that money was paid for by public sources, which means American taxpayers are footing three quarters of the bill. With 117 million taxpayers in the U.S., this means that the average amount paid by each individual taxpayers amounted to approximately $1,800. That pretty much negates that nice Economic Stimulus Check you received this year.
A recent study in the UK breaks down the estimated cost of an individual drug addict to society over the course of his or her lifetime. Auditors PricewaterhouseCoopers found that the average abuser costs taxpayers over £800,000 or $1.4 million in crime prevention, heath care, jail and prision accomodation and treatment. Interestingly, they also estimated that this could be reduced to under 1/10 of the cost when treatment is provided before the age of 21.
The US Government reports that only 15 percent of the estimated 23 million Americans addicted to alcohol and drugs actually seek treatment for their addictions. It is clear that this problem is not going away on its own. Thankfully there are many experienced professionals ready and willing to assist those who are ready to seek help, but unfortunately very few are willing to utilize this resource on their own.
Everyone has a story about addiction that has affected his or her personal life or the life of a friend or relative, and nothing affects someone more than the financial impact of that addiction. It is nearly impossible to calculate the details and the full financial risk of an addiction to alcohol and drugs, but one thing is for certain: addiction is expensive.
The financial resources an addict uses to support their addiction get burned up fast. The average addict lives day to day, not worrying about the long-term financial impacts their addiction might carry. The average heroin addict spends $30,000 to $40,000 a year on the substance alone, but to the addict that is considered to be just an $80 to $110 a day habit.
Opportunity Cost: The Damages at Home and in the WorkplacePast Month Illicit Drug Use among Persons Aged 18 or Older, by Employment Status: 2007
The graph above, courtesy of the National Survey on Drug Use and Health, shows the percentage of people using illegal drugs in the past month according to employment status. As you can see, over 18% of unemployed persons surveyed reported tousing drugs, whereas the numbers significantly decline among those with full or part time employment. This may be a "chicken or the egg" type of argument of whether or not people who use drugs can't get a job, or people with free time choose to do drugs more often. Either way, unemployment paired with drug use adds up to financial instability.
Not only do addicts see losses in financial security, they also see a drastic loss in productivity. Substance abuse is heavily associated with absenteeism from work, which obviously results in decreased chance of promotion and an increased risk of unemployment. In 2007, If an addict loses his or her job, he or she is more likely to get involved in illegal activity to support the high cost of their addiction. This crime also translates into additional cost to society.
Substance addiction problems not only take time of away from normal life with friends and family, due to the time spent searching for, using, and recuperating from the addiction, but it is also dangerous for your health. The financial risk due to health problems increases due to a result in more unintended hospital visits. According to a recent study published by the Harvard School of Medicine, 54 per cent of all bankruptcies in America are due to unintended medical bills.  The High Cost of DUI and Why Alcoholics Have Higher BACs.
Another common financial liability that people with addictions face is getting caught driving under the influence. An alcoholic or drug addict is much more likely to be arrested for DUI than someone who drinks or uses drugs casually. Surprisingly, this is not only because they are more likely to be under the influence at the time of driving, but also because an alcoholic's body produces many times more acetaldehyde, which is a compound that is produced by the liver from the metabolism of alcohol. According to duiblog.com, breathalyzers used by police in the field today cannot differentiate between alcohol and acetaldehyde, resulting in falsely high BAC readings for people whose bodies regularly process alcohol. Receiving a DUI charge not only results in car insurance rates increasing by an average of 300 percent, but also paying for the citation and associated legal fees can end up costing the offender up to $12,000.
Medical Costs and the Risk of Death
An addict not only throws away money but potentially his or her own life as well. The final liability the addict imposes on friends and family is often at the time of death, through the debts incurred from years of supporting addiction. When the addict passes, he or she leaves their family with an average cost from $6,500 to $10,000 according to the AARP.One more cost that gets out of hand is the cost of drug rehab. The selfishness that has been practiced by an addict during their life continues to affect those close to that person long after their death as well.
The economy of addiction reflects a scenario most people hope to avoid in their lifetime, but more often than not, people’s lives are affected by the seemingly irrational choice to abuse habit-forming substances like alcohol and drugs. There has yet to be a study that has been able to calculate the exact cost of addiction, but one thing is for sure, the societal and personal impacts are devastating for those involved in the cycle of addiction. |
