Key Researchers


Policy Brief: Substance Abuse and Healthcare Costs

Alcohol, drug and tobacco abuse are significant drivers of healthcare spending (Harwood, 2000; National Center on Addiction and Substance Abuse at Columbia University, 2009; Office of National Drug Control Policy, 2004). A recent report found that 58% of all alcohol, drug, and tobacco abuse-related costs paid by federal and state government were attributable to health care spending, amounting to more than $216 billion dollars in 2005 (National Center on Addiction and Substance Abuse at Columbia University, 2009). Direct spending for treatment of substance abuse represents approximately 2% of this figure. The remainder is due to medical consequences of substance abuse, such as increased disease prevalence or illnesses that are made more difficult to treat by ongoing abuse of substances and the lifestyles associated with addiction.

This policy brief focuses on general research findings on how alcohol and drug abuse affect healthcare costs. Individuals with these substance use disorders are a diverse group, comprising those who abuse only alcohol or only drugs and a growing number who abuse both substances. There are also different levels of severity, typically characterized as abuse (less severe) or dependence (more severe). Throughout this brief, we use the more general term "substance abuse" to refer to both abuse and dependence. While the severity of substance abuse can influence the level of healthcare use, the general findings are similar for alcohol and drug abuse - both lead to higher healthcare cost.

Higher rates of mental and physical illness among individuals who abuse drugs or alcohol are important contributors to health expenditures: more illness leads to more cost. Individuals who abuse drugs or alcohol use expensive forms of acute care more often than others. A growing number of studies show that individuals with addiction and a chronic illness such as asthma, cardiovascular disease or diabetes, are less likely to follow good self-care practices and, overall, receive lower quality of care than others with the same illness but no addiction.

Successful treatment of substance abuse can lower healthcare costs, but treatment may not completely eliminate cost differences between individuals with and without substance use disorders. Additional research is needed to determine the long-term impact of treatment on healthcare costs. Although this brief focuses on healthcare expenditures, the impact of effective treatment often reaches beyond the healthcare system to impact other societal costs. For example, treatment often lowers criminal justice costs associated with addiction-related arrests and incarceration. It can also improve employability, resulting in higher earnings for those who reduce or eliminate their substance abuse.

Policy Implications:
Growing recognition of the impact of substance abuse on many other medical illnesses underscores the need for better integrated primary and specialty medical care, leading to the conclusion that substance abuse must be effectively addressed in all settings - not just specialty addiction treatment programs - if we are to improve the quality of disease management, prevent further complications and, ultimately, lower healthcare costs. Primary care clinicians can play a crucial role in identifying and intervening in patterns of unhealthy substance use before they become more serious.


  • Alcohol and drug abuse consistently increases the cost of healthcare. Read more

  • A variety of approaches to substance abuse treatment have been shown to lower healthcare costs, particularly for expensive services such as emergency room visits and inpatient care. Read more

  • Individuals with alcohol or drug addiction have higher rates of chronic physical illness than others. Read more

  • Psychiatric disorders are more prevalent among people with addictions. Read more

  • Rates of infectious disease, such as human immunodeficiency virus (HIV), hepatitis b, and hepatitis c are significantly higher. Read more

  • The impact of substance abuse on general healthcare costs may increase with age. Read more

  • Patients who abuse drugs or alcohol receive lower quality care for their physical health problems than others without addictions. Read more




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