Implications of Drug Use for Employers – NSC

Implications of Drug Use for Employers

What is the Cost of Substance Use Disorders?
The typical worker misses three work weeks (15 days) annually for illness, injury or reasons other than vacation and holidays. Workers with substance use disorders, however, miss two more weeks annually than their peers, averaging nearly five weeks (24.6 days) a year. Most of these extra days of missed work are associated with illness and injury. Workers in recovery (who have reported 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 10.9 days.

Job Turnover and Re-training
Studies place the base cost to employers of recruiting and training replacement workers at one-third of a worker’s annual salary, with additional costs to the employer rounding out at over 50% of the 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, 22% report having had more than one employer in the previous year. By comparison, workers with an SUD are 40% more likely to report having more than one employer in the previous year. Workers in recovery are equally likely to leave their employers as employees with no SUD.
In sectors and roles with high average salaries, such as executives, managers, and people working in administration and finance, each worker with an untreated substance use disorder costs an employer more than $14,000 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).

Health Care
The Surgeon General’s 2016 report, Facing Addiction in America, notes that the U.S. spends about $35 billion a year to treat substance use disorders, and another $85 billion annually to treat the injuries, infections and illnesses associated with substance use. These numbers continue to grow, with mental health and substance use treatment expected to cost $280.5 billion in 2020.
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; in 2020, the average organization covers 83% of individuals’ premiums and 73% of family premiums. Employer health care costs were calculated using data from:
• National Survey on Drug Use and Health
• Hospitals
• Industry-specific estimates
• Health care utilization rates
• Healthcare Cost and Utilization Project
Based on this data, the average hospital-paid claim per day in 2018 was $2,517. The average emergency department visit was $2,096 in 2018 and the average ambulatory visit was $696.

Employees are Affected
Nationally, almost 9% of working adults have a substance use disorder, including 6.7% with an alcohol use disorder and 1.6% with a cannabis use disorder. Higher rates of substance use disorders are found in industries with younger, male-dominated workforces, like construction. Other industries with easy access to alcohol, like entertainment and food service, also have higher rates. However, substance use disorders can be found in workers from all industries.

Dependents and Family Members are Affected
Employees with family members dealing with prescription pain medication addiction may face issues including financial problems, legal consequences, time spent caregiving or lost productivity at work because they are distracted by problems at home (known as “presenteeism”). Similarly, alcohol use disorder can affect family functioning and lead to physical and behavioral problems among caregivers. Studies have found that spouses of people with an AUD are at increased risk of stressful life events, medical and psychiatric disorders, and use more medical care services.

Employers may face higher health care costs if the family member is a dependent who receives coverage through the employer’s health insurance plan. These data suggest it can be important for employers to consider the health care needs of family members as well as employees.

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Thanks to the NSC!