SCHAUMBURG, Ill., Oct. 15, 2019 /PRNewswire/ -- The opioid epidemic cost the U.S. economy at least $631 billion from 2015 to 2018, according to a Society of Actuaries' (SOA) analysis of non-medical opioid use during this timeframe. The SOA report, authored by Milliman, also projected future costs of the opioid epidemic for 2019 based on three scenarios reflecting how the crisis may develop moving forward, with a midpoint cost estimate of $188 billion and the low and high cost estimates ranging from $172 billion to $214 billion.
This is the inaugural study from the SOA's Mortality and Longevity Strategic Research Program, which builds on existing research examining the factors affecting models and mortality predictions, including the analysis of longevity trends. Key findings from the study include the financial burden of the opioid epidemic across the following areas of the economy between 2015 and 2018:
- Healthcare: Nearly one-third ($205 billion) of the estimated economic burden is attributable to excess healthcare spending for individuals with opioid use disorder (OUD), infants born with neonatal abstinence syndrome or neonatal opioid withdrawal syndrome (NAS/NOWS), and for other family members of those with diagnosed OUD.
- Premature Mortality: Mortality costs accounted for 40 percent ($253 billion) of the estimated economic impact, predominantly driven by lost lifetime earnings for those who died prematurely due to drug overdoses involving opioids.
- Criminal Justice Activities: Costs associated with criminal justice activities, including police protection and legal adjudication activities, lost property due to crime, and correctional facility expenditures, totaled $39 billion, roughly 6 percent of the total cost from 2015 to 2018.
- Child and Family Assistance and Education Programs: Costs associated with government-funded child and family assistance programs and education programs contributed another $39 billion over the four-year period.
- Lost Productivity: Finally, lost productivity costs comprised the remaining 15 percent of total costs from 2015 through 2018, totaling $96 billion. Lost productivity costs are associated with absenteeism, reduced labor force participation, incarceration for opioid-related crimes, and employer costs for disability and workers' compensation benefits to employees with opioid use disorder.
In addition to historical analysis, the SOA also projected costs for the opioid epidemic in 2019 based on three scenarios reflecting how the crisis may develop moving forward. The SOA's midpoint cost estimate for 2019 is $188 billion, with its low and high cost estimates ranging from $172 billion to $214 billion. These cost estimates reflect a potential range of outcomes for key assumptions such as the prevalence of opioid use disorder and the number of opioid overdose deaths in 2019, and are intended to represent a few potential scenarios rather than the minimum or maximum of possible outcomes.
"As stakeholders seek to understand and address the opioid epidemic, this analysis provides insight into the tremendous impact across all areas of our economy," said Dale Hall, FSA, CERA, MAAA, CFA and Managing Director of Research with the Society of Actuaries. "Actuaries have long played a vital role in measuring population-level risks, and will continue to work with the healthcare industry to evaluate the impact of the opioid epidemic on pricing, valuation and other crucial calculations moving forward."
The SOA's analysis is based on a range of data sources, including administrative claims data, federal surveys, and databases, as well as prior peer-reviewed literature to determine the total economic burden. Of note, the analysis does not include economic impacts for which there is a lack of adequate data, such as reductions in household (non-paid) productivity, reductions in on-the-job productivity (presenteeism), or reductions in quality of life for those impacted directly or indirectly by opioid use disorder.
The SOA will continue to analyze new data as it is available, to arm actuaries and external stakeholders with crucial insight into the financial impact of the opioid epidemic. For additional information, including the full SOA analysis and report, please visit www.soa.org/resources/research-reports/2019/econ-impact-non-medical-opioid-use/
About the Society of Actuaries
With roots dating back to 1889, the Society of Actuaries (SOA) is the world's largest actuarial professional organization with more than 32,000 actuaries as members. Through research and education, the SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal challenges. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk. www.SOA.org.
SOURCE Society of Actuaries