The Economics of Addiction

Transcription

1 The Abbey Foundation The Economics of Addiction Paul Gleason Bettendorf, Iowa Date: July 23, 2009

2 The Economics of Addiction 1 The Economics of Addiction The economic recession that has consumed the nation for more than a year has had a financial impact the likes of which has not been experienced since the Great Depression. Unemployment and foreclosure rates have skyrocketed, major corporations have failed, and millions of Americans have sustained massive loses in numerous slumping stock markets. Yet, beyond its economic impact, the current downturn has had a profound impression on the American psyche. Money and the state of the economy are two of the most common sources of stress for eighty percent of Americans, according to the American Psychological Association s 2008 Stress in America survey. 1 The current recession will forever be defined by its exacerbating impact on the growing national epidemic that is addiction; it has affected both those who need help as well as those who provide it. The Usual Suspects Over the past few months, researchers and healthcare providers have grown increasingly concerned with escalating national addiction rates in the midst of the current downturn. Abnormally high numbers of new reported cases of stress, anxiety, and depression have traditionally been associated with such dire economy times; those with pre-existing conditions are considered to be especially at risk. All too often Americans turn to drugs and alcohol to cope with their problems and by doing so set the stage for addiction to take control. The results of a recent study conducted by research firm Penn, Schoen & Berland Associates indicate that the current economic downturn is having serious repercussions in the rising use of drugs and alcohol: Twenty-nine percent of those surveyed feel that younger people are abusing illegal drugs more than usual, and twenty-six percent think younger people are drinking more in this economy. 2 Eighteen percent of those surveyed feel their friends and neighbors are drinking more than usual, and seventeen percent say that is true of their co-workers. 3 Eight percent of those surveyed admit they are abusing drugs more than usual, and seven percent admit they are drinking more. 4 Even more disturbing is the fact that many Americans feel that such trends only accentuate an already alarming national reality. Eighty-eight percent of the population feels that drug abuse is at either a serious or crisis level today, reflecting the devastating impact that 1 Mental Health, Addiction Specialists Brace for Spike Amid Down Economy: 2 : 3 4

3 The Economics of Addiction 2 addiction is having on individuals, families, and communities. 5 Furthermore, expectations about when an economic recovery will occur are uncertain at best, leaving many to wonder whether the worst is yet to come for those coping with the realities of addiction. A New Trend A potentially devastating new trend has been the excessive use and abuse of prescription drugs such as painkillers, tranquilizers, sedatives and stimulants in conjunction with the worsening economy. 6 The use of such substances as coping mechanisms often causes more harm than good. Drug Enforcement Administration officials told Congress earlier this year that prescription drug addiction and abuse rates are rising at an alarming rate. More than seven million Americans abuse prescription drugs, according to the DEA, an eighty percent increase in just the past six years. 7 Moreover, a relatively new phenomenon is fueling this problematic trend. While some doctors are writing more anti-depression and antianxiety prescriptions than ever before, the true culprit is the relative ease by which these drugs can be obtained. Medicine cabinet thievery has all but become antiquated with the advent of online pharmacies. A number of these online outlets are so easy to use, that younger consumers are able to buy prescription drugs without even needing a prescription. 8 Too Much of a Good Thing According to researchers and healthcare providers, drugs and alcohol are only part of the problem as addiction takes on other forms, as well. While problem gambling rates have traditionally been known to spike during economic recessions, the emergence of online gambling sites has led to an unusually large surge this time around. The online betting industry had a revenue increase of six percent by the end of 2008 which can be considered a big leap in revenue given the state of the economy. 9 Online gambling sites offer their customers the convenience and anonymity that cannot be found at a traditional casino and, thus, encourage addictive gambling behavior. Compulsive shopping rates have also been on the rise over the past year. While many people have cut their spending during this economic downturn, shopping addiction is on the rise as people look to cope with their problems. Those who have seen their purchasing power diminished are still shopping just as much, but can now be found purchasing lower ticket items or turning to discount stores. 10 Finally, escalating compulsive eating and sex addiction rates are simply two more examples of 5 6 : The Recession s Effect on Online Pay Per Head Service: 10 The Addiction of Overspending:

4 The Economics of Addiction 3 literally dozens of unhealthy behaviors experiencing renaissances during the current economic recession. While the consequences of such behaviors are not as devastating when compared to those stemming from substance abuse, they take their toll on the lives of millions of people in this country. The Financial Divide As addiction rates have risen to exceed record levels, the current economic recession has widened the void between those who need help and those who provide it. On one side of the divide, the vast majority of those dealing with an addiction lack the financial resources and insurance coverage to afford proper treatment. Studies show that traditionally only one in ten individuals struggling with an addiction receives the treatment they need. 11 The current downturn possesses the ability to amplify this already alarming statistic. There are signs that people are already cutting back or foregoing services in an attempt to save money or because they no longer have insurance coverage. 12 Furthermore, many of those that can afford proper treatment can be expected to choose less effective alternatives in response to current and future economic uncertainty. On the other side of the divide, treatment centers are being forced to make difficult decisions in the face of bleak budget scenarios brought about by the current economic recession. States, local governments, and non-profits are all responding to tremendous budget shortfalls by cutting the resources necessary to help a growing group of addicts just when they need it the most. 13 Many treatment facilities manage a constant balancing act as they try to help those in need while running a sustainable operation. The current downturn has made this task significantly more difficult. As an example, according to the Illinois Alcoholism and Drug Dependency Association, the state s substance abuse and prevention programs face a $170 million loss in funding due to budget cuts. Consequently, approximately 355,000 substance abusers won t receive adequate treatment. 14 Treatment centers that receive funding from private and corporate foundations can expect such resources to be less accessible now and in coming years. These centers, many of whom also rely on self-paying clientele, are in danger of going out of business if the economy doesn t recover soon. 15 A New Perspective Insider Tips on Addiction Recovery During a Recession: How the Recession Affects Drug and Alcohol Abuse in the Black Community: ty.php 15 Economic Squeeze The Recession s Impact on Behavioral Health:

5 The Economics of Addiction 4 Escalating national addiction rates associated with the current economic recession have led many to reconsider the way in which we view different demographics in terms of their susceptibility to the disease. The trials of lower income and impoverished intercity populations and their constant strife with addiction are well documented, but times like these remind us of the fact that we are all at risk. Middle and upper class professionals such as lawyers, corporate executives and healthcare providers like doctors and nurses cope with excessive amounts of stress in their daily lives; many develop addictions as they search for relief. For example, experts say a growing number of people in the field of finance are seeking treatment for addiction as this economic crisis sinks its teeth into a high-stakes industry where confidence is the name of the game and nobody wants to admit to a weakness. 16 While successful professionals are afforded greater access to addiction prevention and treatment resources, we must recognize that social status counts for little in the fight against this truly national epidemic. Post-Recession Effects The disconnect between skyrocketing addiction rates and diminishing treatment resources possesses the ability to produce unfavorable ramifications that linger long after economic recovery occurs. Like any other disease, addiction is best treated early on before its grip on one s life becomes too great and the consequences too detrimental. Healthcare providers warn that failure to effectively treat those in need today will only lead to an overwhelming influx of patients into the treatment network in the immediate future. Furthermore, a greater proportion of these patients will be experiencing more advanced stages of their addictions. Of course, the associated direct costs to these patients and their families will be enormous, but healthcare providers also warn of the massive indirect costs to our nation as a whole. They contend that the savings realized now as the result of budget cuts by state, local governments, and non-profits in regard to addiction treatment centers and programs will be more than offset by inflated costs in the long-run. Moreover, such costs can be expected to filter down to the individual taxpayer as is often the case in these instances. 17 The ultimate scenario for catastrophe exists as this influx of patients is likely to be received by a markedly diminished network of treatment resources ill-equipped to absorb such a rush. 18 Such a scenario will apply upward price pressure on many treatment options, further exacerbating the problem by increasing both direct and indirect costs. Unfortunately, during such dire economic times, we are reminded that the laws of supply and demand apply to the treatment of addiction as well. 16 Rehab Centers See Bankers Driven to Drink: Economic Squeeze The Recession s Impact on Behavioral Health