Insurers avoiding ‘rehab’ coverage
By Lee Bowman
Scripps Howard News Service
Celebrities are sure to make headlines when they enter “rehab” for alcohol and-or drug abuse. News stories often mention that the price tag for star addiction treatment runs $40,000 or more a month.
They seldom express doubt that the performers or sports stars can afford the cost. Substance abuse treatment for millions of other Americans doesn’t include massages, personal trainers or juice bars.
But for many, it is prohibitively expensive. And a new study said the costs are becoming less likely to be covered by private insurance. That’s a major problem, because another study just out - this one from the federal Substance Abuse Treatment and Mental Health Services Administration - found that most of the nation’s estimated 16.4 million illegal-drug users and 15 million alcohol abusers work full-time. There are 10 million in each group, so there is overlap.
So, how much does the nation spend on substance abuse treatment?
A report by researchers at the federal substance abuse agency and several health consulting firms published this week in the journal Health Affairs concluded that spending for substance-abuse treatment in 2003 was $20.7 billion, up from $9.3 billion in 1986. Although that looks like a big jump, substance abuse treatment spending actually fell from 2.1 percent of all health spending in 1986 to 1.3 percent in 2003. The average annual growth rate for substance-abuse spending was 4.8 percent, while total U.S. health spending grew by 8 percent a year.
In 1986, 60 percent of addiction treatment money went to inpatient care. By 2003, the share was down to 20 percent of all substance-abuse spending. The shift was a result of many factors, but mostly because substance-abuse wings and specialty hospital care shrank under pressure from managed behavioral care, while new specialty residential addiction treatment centers blossomed, the researchers noted.
Those centers tend to focus on a structured, 28-day-stay approach that promises a “cure” from dependence as an outcome and, for employers and insurers, offers boundaries for the cost of care that some other types of therapeutic approaches don’t. The bottom line for spending on private health insurance for substance-abuse care is that it declined from $2.8 billion in 1986 to $2.1 billion in 2003, making up only about 10 percent of all spending for such care by the end of the period. And an analysis of claims from larger employers during the 1990s shows that the number of people using any inpatient or outpatient substance-abuse care declined sharply.
National surveys show that about 3.8 million Americans got treatment for alcohol abuse or illicit drugs in 2004, but 2.1 million got help exclusively through a free self-help group. So, it cost about $20 billion to provide drug rehab services to 1.7 million people. Project that cost out for, say, 25 million drug and alcohol abusers, and you’re up to $500 billion a year. That’s just under one-third of the total amount the nation devotes to health care each year.
Visions of numbers like that, of course, are why insurers and the companies that pay the premiums have imposed such strict limits on substance abuse care, if they offer any at all, and fear mandates that require drug abuse and mental-health services be provided on an equal footing with other health-care services. A survey, out this week from the nonprofit Hazelden Foundation. The study, involving 1,000 senior human-resources professionals, found that 92 percent believed an effective workplace drug treatment program for substance abuse improves productivity. Two-thirds said that substance abuse is one of the most serious issues they face in their company. But only 22 percent said their companies “openly and proactively” deal with employee substance abuse and addiction.