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Cost of Substance Abuse for Employers

Posted by Joe Antle on February 17, 2020 12:15 PM EST
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Research by the National Safety Council, in collaboration with NORC and....

....the University of Chicago reveals some very interesting and significant insights into the impact of substance abuse on employers.  I reprint some of the findings of the specific elements of the costs of this chronic illness among employees and the adverse impact on their employers below.

1.       From NSC website: https://www.nsc.org/work-safety/safety-topics/drugs-at-work/costs-for-employers

What is the Cost of Substance Use Disorder for Employers?

The typical worker misses about two work weeks (10.5 days) annually for illness, injury or reasons other than vacation and holidays. Workers with substance use disorders, however, miss nearly 50% more days than their peers, averaging nearly three weeks at (14.8 days) a year. Workers with pain medication use disorders miss nearly three times as much – nearly six weeks (29 days). Most of these extra days of missed work are associated with illness and injury, adding up to more than 22 days annually.

Workers in recovery who report receiving substance use treatment in the past and have not had a substance use disorder within the last 12 months miss the fewest days of any group – even the general workforce – at 9.5 days.

Job Turnover and Re-training

Studies place the average cost to employers of recruiting and training replacement workers at 21% of a worker's annual salary. Costs are greater for workers with more education and training, and lower for workers who earn less and work in lower-skilled industries. Employer turnover costs are computed from the difference in rates of one-year turnover of workers in an industry sector with and without a substance use disorder and the average cost of replacement in that sector.

Of workers currently employed, 25% report having had more than one employer in the previous year. By comparison, 36% of workers with any substance use disorder and 42% of workers with a prescription pain use disorder report having more than one employer in the previous year. Workers in recovery are the least likely to leave their employers. Their turnover rate of 21% is lower than workers with no current or prior substance use issues.

In sectors with high average salaries, such as information and communications, each worker with an untreated substance use disorder costs an employer more than $4,000 a year because of the greater likelihood they'll leave the job within the year (as compared with the per capita employer costs for turnover for each industry sector). In lower-wage industries like agriculture – which also has lower rates of turnover – an employee with a substance use disorder costs $512 a year.

Healthcare

The Surgeon General's 2016 report, Facing Addiction in America, notes the U.S. spends about $35 billion a year to treat substance use disorders, and another $85 billion to treat the injuries, infections and illnesses associated with substance use. If the payment of the combined $120 billion cost were spread evenly across the population in 2016, the result would be an annual cost of $370 for each person in the U.S.

The cost of treatment for substance use disorders in the U.S. is not borne solely by families or their insurance companies. With higher utilization of treatment programs, health insurance premiums may rise. This can affect employers who offer health insurance for employees; the average organization covers 82% of individuals' premiums and 71% of family premiums. Employer healthcare costs were calculated using data from:

 

·       National Survey on Drug Use and Health

·       Hospitals

·       Industry-specific estimates

·       Healthcare utilization rates

·       Healthcare Cost and Utilization Project

 

Based on this data, the average hospital-paid claim per day in 2014 was $2,605. The average emergency department visit was $2,043 in 2013, and the average ambulatory visit was $190.

https://www.nsc.org/forms/substance-use-employer-calculator

The Substance Use Cost Calculator lets employers enter their industry, location and organization size to determine how much substance abuse might be costing the company. The calculator was developed by the National Safety Council, the addiction resource organization Shatterproof and NORC at the University of Chicago, formerly known as the National Opinion Research Center, and can be found at www.nsc.org/drugsatwork.


Real Cost of Substance Use in Your Workforce

Real Costs of Substance Use in Your Workforce Results

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