Employer-Sponsored Health Plans Face High Costs for SUD Treatment

January 25, 2023 - Employer-sponsored health plans paid $35.3 billion to cover substance use disorder treatments in 2018, a recent study published by JAMA Network Open found.

The researchers used Merative MarketScan 2018 data to assess substance use disorder expenditures among non-Medicare eligible employer-sponsored health plan members. The researchers estimated the cost of substance use disorder treatment overall and broke down the spending by substance and by the average enrollee. The study also estimated the population size of employees with substance use disorders.

Approximately 1.4 percent of employees (2.3 million Americans) had a substance use disorder diagnosis during the study’s timeframe. Nearly six out of ten employees with substance use disorders were male (57.7 percent). Around a third of the employees in this population were between the ages of 25 and 44.

The mean total annual per-enrollee expenditure for members with a substance use disorder was around 2.5 times the mean total for individuals without a substance use disorder. Employers spent, on average, around $26,000 on employees with substance use disorder diagnoses. They spent an average of more than $10,400 per employee without substance use disorder diagnoses.

Among employees with substance use disorder diagnoses, slightly more than a third had two or more comorbidities: 30 percent had depression, 29.8 percent had hypertension, and 17.0 percent had obesity.

The total cost of substance use disorders across the employer-sponsored health plan population was $35.3 billion. This broke down to an annual attributable mean cost of a little more than $15,600 per enrollee. Alcohol-related disorders formed the substance use disorder with the highest cost ($10.2 billion), followed by opioid-related disorders ($7.3 billion).

More than half of the employees with substance use disorders had alcohol-related substance use disorders. The overall cost broke down to a mean per-enrollee cost of $3,988 for inpatient visits, $4,875 for outpatient services, and $8,939 for care overall.

Around three in ten employees with substance use disorders had an opioid-related disorder. The mean per-enrollee cost of inpatient services was $3,570. The mean per-enrollee cost of outpatient services was $6,280 and outpatient drugs averaged around $3,318 per enrollee. These employees had higher per-enrollee mean costs than individuals with alcohol-related disorders, exceeding $11,870 per enrollee.

“The $35.3 billion SUD medical cost represents a small fraction of total US personal health care expenditures paid by private insurance ($1.1 trillion in 2018),” the researchers acknowledged.

“However, in this study, 1% of the ESI population had an SUD diagnosis compared with 11% of workers who self-report SUD, suggesting the medical cost that employers and their health insurance payers face is likely far higher than reported here. Employers can take action by developing workplace supported prevention, treatment, and recovery programs.”

The researchers noted that there were certain limitations to the study related to the data source, treatment types that were unaccounted for, and the gaps in demographic data. The study also did not incorporate the financial impacts of absenteeism, mortality, and other outcomes of substance use disorders.

Experts have urged payers to leverage bundled payment plans, quality measures for substance use disorder co-occurring conditions, harm reduction services benefits, and other tools to improve coverage for substance use disorders.

Medicaid programs sought to improve access to care by removing prior authorizations for substance use disorder treatments, but this strategy was not consistently fruitful.

Payers have used philanthropic efforts to extend access to substance abuse care. For example, Anthem Foundation invested $13 million in groups like Shatterproof, Mental Health America, and Emergency Medicine Foundation to bolster their efforts and reach.