The nationwide opioid epidemic cost the American economy $504 billion in 2015, more than six times a previous estimate, according to a new report from the White House Council of Economic Advisers (CEA). That is the equivalent of 2.8 percent of the gross domestic product that year, the report says.
A study released in 2016 placed the cost of the crisis in 2013 at $79.9 billion, adjusted to 2015 dollars. And, a more recent report published by Altarum, a health care think tank, estimated the benefits of ending the opioid crisis at more than $95 billion in 2016.
Both the CEA and Altarum reports highlight the fact that, while economists can measure indicators like health care costs and lost GDP, it’s much more difficult to take the measure of the epidemic’s massive human toll.
The CEA’s tally is much larger than previous estimates, because it takes into consideration the value of lives lost to the epidemic. The economists said previous studies did not accurately reflect the true impact of the epidemic because it only factored in health care costs or earnings lost from victims of the epidemic. That figure omitted “other valuable activities in life besides work,” the panel said.
The CEA said it plans to issue more reports on the opioid crisis, to give policymakers the economic analysis they need to assess possible policy options.
“A better understanding of the economic causes contributing to the crisis is crucial for evaluating the success of various interventions to combat it,” the panel wrote. “For example, supply side interventions that raise the economic costs of supplying legal prescriptions of opioids may have unintended consequences depending on the extent of demand side substitution induced towards illicit opioids.”
CEA plans to do more analysis of actual and proposed demand and supply side interventions, consider the impact of public programs such as Medicare and Medicaid; and explore the role of medical innovation in combating addiction.
Altarum noted that its analysis “does not take into account the emotional cost of the opioid crisis to communities and families, which is great, but difficult to quantify. It does not look at decreased quality of life, emotional burdens of substance use and the loss of loved ones, decreased property values, the impacts on children of parents facing opioid addiction. Nor does it include an estimate of the overall cost of a life – only the cost in terms of lost productivity. As a result, the total societal burden is underestimated.”
Corey Rhyan, a health care research analyst at Altarum who was not involved with the CEA report, told Vox.com that the White House and Altarum reports addressed different questions.
“Our report is looking at the direct estimate of the return you would see in economic benefits if you could remediate this epidemic — the potential economic benefits, the true dollar values that you would see over someone’s lifetime as a result of someone’s increased earnings,” he said. “What the White House produced is the total societal welfare loss associated with the opioid epidemic, which includes the implicit value of life because they’re trying to put a value on [the fact] we care more about people than just what their economic gains are going to be throughout their lifetimes.”
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, the Altarum report added.