The potential societal benefit of eliminating the opioid crisis exceeds $95 billion per year
Report | November 16, 2017 | Corey Rhyan
The negative impacts of the opioid epidemic are substantial and increasing rapidly over time. No part of society—including households, governments, and the private sector—is safe from the devastation brought on by this national crisis. The human toll of the combined misuse of prescription opioids, heroin, fentanyl, and related drugs has reached an unthinkable scale, with deaths soaring to more than 53,000 in 2016. Through this analysis of 2016 data, we estimate the magnitude of the economic and quantifiable societal harms and find the potential benefit of preventing opioid overdoses, deaths, and substance use disorders in 2016 would have exceeded $95 billion dollars—and preliminary data for 2017 predict this estimate will increase. This finding calls for substantial increases in funding at all levels—private and public sectors—to prevent opioid misuse and provide treatment for those affected.
The potential benefits of eliminating the epidemic are concentrated in productivity gains from saved lives and reductions in substance use, averted health care costs due to fewer overdoses and other health complications, and lower spending on other services currently addressing the burden of opioids like law enforcement and child/family assistance. These benefits—including savings to governments and increases in economic returns to households and the private sector—would accrue to all of society.
View detailed results in the full report, including productivity impacts, health care costs, public service costs, and non-monetized impacts.
Update: The White House Council of Economic Advisers (CEA) on November 20, 2017, released a report estimating the cost of the opioid crisis at $504 billion. Their estimate is higher than ours and previous estimates by others primarily due to their including the “value of a statistical life,” which seeks to place a cost on the intangible value of a life, above and beyond lost earnings.
Our estimate measures the loss of life solely in terms of lost wages, a more concrete metric. Both estimates can be helpful, however. For example, ours is useful in identifying the tangible cost (and potential economic returns for prevention/treatment) for families, the private sector, the government, and other institutions. The CEA’s analysis is helpful in that it acknowledges the intangible value of the loss of a life, and the total welfare losses opioid-related deaths put on society.
Another way of understanding the total welfare loss from opioid overdoses is to estimate the total number life-years lost, which in 2016 reached 1.84 million years.
Experts
Research Director, Health Economics and Policy