Philip Morris
the Cost of Substance Abuse to America's Health Care System Report 2: Medicare Hospital Costs
Fields
- Author
- Califano, J.A., J.R.
- Chang, H.
- Fox, K.
- Merrill, J.
- Pulver, G.
- Schiff, A.
- Chang, H.
- Type
- SCRT, REPORT, SCIENTIFIC
- BIBL, BIBLIOGRAPHY
- BUDG, BUDGET, BUDGET REVIEW
- CHAR, CHART, GRAPH, TABLE, MAPS
- BIBL, BIBLIOGRAPHY
- Document File
- 2025683263/2025683376/Center on Addiction & Substance Abuse
- Area
- SLAVITT,JOSHUA/OFFICE
- Named Organization
- Betty Ford Center
- Casa Board of Directors
- Center on Addiction + Substance Abuse
- Coca Cola
- Columbia Univ Ny
- Federal Hospital Insurance Trust Fund
- Henry J Kaiser Family Foundation
- Howard Univ
- Johnson Publishing
- Journal of the American Medical Assn
- Medicare Trust Fund
- Medline
- Natl Assn of Psychiatric Health Systems
- Natl Assn of Psychiatric Hospitals
- Niaaa
- Partnership for A Drug Free America
- United Auto Workers
- Univ of Az
- Univ of Tx Austin
- Walt Disney
- Wayne State Univ
- Allen
- Bear Stearns
- Casa Board of Directors
- Site
- N340
- Named Person
- Burke, J.E.
- Califano, J.A., J.R.
- Chang, H.
- Ford, B.
- Fox, K.
- Fraser, D.A.
- Jordan, B.C.
- Kelman, J.
- Keough, D.R.
- Leffall, L.D., J.R.
- Merrill, J.
- Pacheco, M.T.
- Pulver, G.
- Rice, D.
- Rice, L.J.
- Rosenwald, E.J., J.R.
- Rupp, G.
- Schiff, A.
- Surgeon General
- Wells, F.G.
- Califano, J.A., J.R.
- Request
- Stmn/R1-072
- Author (Organization)
- Center on Addiction + Substance Abuse
- Columbia Univ Ny
- Litigation
- Stmn/Produced
- Date Loaded
- 05 Jun 1998
- UCSF Legacy ID
- rah34e00
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As can be seen in Table 1, the largest share of Medicare inpatient substance anusee
costs--$12.5 billion or 97% of the total--was for medical treatment of illnesses and conditions
attributable to the abuse of alcohol; drugs and tobacco. These are condit2ons that do not
mention substance abuse in the diagnosis, but are ones that have been repeatedly shown in
epidemiologic research to be associated with the use of at least one of these substances.
In contrast, treatment for conditions that explicitly mention alcohol or drug abuse
account for only 4% of all substance abuse-related discharges, consuming 3'% of those costs.
Thi's low percentage of ' alcohol and drug diagnoses is misleading, and is probably more
reflective of'& reluctance by physicians to classify the elderly population as alcohol or drug,
dependent, than an ~ indication of a low prevalence of alcohol or drug use among the elderly and
disabled. Underreporting, of substance abuse as either a primary or secondary condition for this.
population is clearly a problern~ as depiicted in Graph 2. While 5% off all Medicare benef ciaries
are considered heavy drinkers and 3% report using drugs (see Table 2), only 3% of Medicare
patients in the hospital had' a diagnosis that mentioned either alcohol or drug, use or both.
Since alcohol and drug users tend to be at' greater risk for medical care, we would expect them!
to make up a larger, not smalller, proportion of the hospitalized population. In fact, separate
studies measuring, alcoholism alone among the hospitalized elderly indicate that 9-20% actually
have a drinking problemL"b This wide range in estimates of alcohol. problems suggest that
identification of alcoholism varies considerably across physicians. Thus, relying solely on
diagnoses that explicitly mentioni alcohol or drugs on the medical record in order to measure
the prevalence and' cost of drugs and/or alcohol problems in hospitals grossly underestimates
the full impact of substance abuse on Medicare costs.

TABLE 1: Substance Abuse Costs to Medicare
Total Hospital Care, 1991
Discharges Expenditures
1. Direct Treatment for Alcohol 90,659 $319 million
and Drug Primary Diagnoses
2. Treatment for Diseases Where
2,076,840
$12.487 billion
.~ Substance Abuse Is a Major Risk Factor
3. Additional Days Required for Patients with
~ N/A
$112 million
w
Cr
~
~
a Seconda -ry Diagnosis of Substance Abuse
Substance Abuse Total 2,167,499 $12.9 billion
Total Medicare 11.1 million $57 billion
Substance Abuse as Percent of Total
20%
23%
SOURCES: National Hospital Discharge Survey, 1991; 1992 HCFA Statistics;
National Association of Psychiatric Hospitals Annual Survey 1992.
SVEV89szo%

Graph 2: Underreporting of Substance Abuse on Hospital Records
Alcohol and Drugs Recorded on Medicare Records Compared to Actual Prevalence of Alcohol Alone
as Reported in Studies of Heavy Drinking in Hospitalized Elderly Populations
Alcohol and Drugs Reported on Record Estimates of Actual Heavy Alcohol Use Alone
.,
3%
, .
~
i
~
79%
Q Identified Substance Abuse
~ No Identified Substance Abuse
National Hospital Discharge Survey, 1991
9%
~E~ES9szo7 . .

Table 2: Consumption Rates for Medicare
and General Population
Consumption Rate
Substance User category Medicar- e General
Cigarettes Current Smokers 18.4% 29.6%
Former Smokers 36.1 % 23.3 %
Alcohol Heavy Drinkers 4.8%
V %O
Illicit Drugs . Drug Users 3.2% 5%
SOURCES: National Afedical Expenditures Survey, 1987; National Health Interview Survey, 1991.
iw G. Z. Z.3%4%'07.

Drug use among the elderly also accounted for a very small: percentage of the total
dischargEs, even though more than 3% of this population admit to: using drugs in the last year.
This lbw number is, in part, indicative of a lack of research co nnecting, illicit drugs wsthh
disease, and does not imply that drugs present no probllem for the elderly: Further, since we
were also unable to find sufficient data from, the epidem2ologic literature to quantify the health
effects of the abuse of prescription drugs, we couldI not estimate the extent of that problem
either. Thus, our estimate of the impact of drugs--both legal and illiiciR--on, Medicare is
undoubtedly low. There ! is clearly a need for more research to understand and quantify the
impact of all' drugs on morbidity and cost. Since: the elderly are: suchl large users of
prescription drugs, this research is even more critical wi th respect to, that population.
In total, we found more than 60 conditions that are associated~ with substance abuse
covering virtually every major disease category (Appendix II)`'. In, the Medicare population,
more than half of the substance abuse-related hospital admissions were for cardiovascular
diseases, 15% for respiratory diseases, 12% for neoplasms; andi 7°Xa, for burns and trauma
(Table 3). These results differ somewhat from the earlier Medicaid study where the adverse
impact on birth outcomes represented the major contributor to~ the costs attributable to the
substance abuse. Further, in comparing substance abuse problems in the Ivledicaid' and
Mediicare populations, the impact oni Medicare was much more a result of the long-term effects
of smoking. More than 80% of substance abuse-related Medicare: hospital costs was for
treating smoking-related medical conditions -- from lung cancer to chronic pulmonary
`This number is lower than the 7?' substance-abuse related conditions identified in the
Medicaid becausefurtheranadysis led ustocombine some specific d'iag~nosesialrto broader
diagnostic categories. Appendix III provides an even more detailed breakdown of the substancee
abuse-related discharges in all the conditions iidentified.

Table 3: Medicare Discharges for Diseases Attributable to Substance Abuse
as a Major Risk Factor
U.S. General Hospitals, 1991
[)isease/
Condition Attributable
Discharges % of Total Attributable
Discharges
Cardiovascular Diseases 1,156,057 53.3
Respiratory Diseases 328,453 15.2
Neoplasms 249,683 11.5
"I'raunta/I3urns 149,649 6.9
~
~ Cerebrovascular Diseases 112,799 5.2
~
~ Digestive Diseases 49,798 2.3
Other 30,402 1.4
Direct Alcohol and Drug Diagnoses 90,659 4.2
TOTAL 1991 ATTRIBUTABLE MEDICARE DISCHARGES 2,167,500
1991 ASSOCIATED MEDICARE COSTS ATTRIBUTABLE $12.8 billion
TO SUBSTANCE ABUSE AS A RISK FACTOR
SOURCES: National Hospital Discharge S«rvey, 1991;
CA_ SA Substance Abuse Epidemiologic Database, 1993.
GeEes9Sz0z

obstruction, disease (COPD) to coronary artery disease; as opposed! to only 40"/o for the
predominantly younger, Medicaid, population.
The Medicare populati+oni is at a much higher risk for getting smoking-related
diseases because people over 65 who have smoked tend to have done so more heavily and for
]bnger time periods. Nearly 3 out of 5 of current Medicare smokers (58%) and almost one
third of former smokers (32'.7%0) smoked an average of more than cigarettes per day for
over 35 years (Graph, 3).
Substance Abuse as a Complicating Factor in the Treatment of'other Diseases
When substance abuse is recordedi as a secondary diagnosis to, an otherwise
unrelated condition, it tends to complicate and prolong the treattnent for the underlying,
problem. On average a secondary diagnosis: of alcohol and/or dhng, abuse increased the length
of time patients stay in the hospital. Compared to, Medicare patients with the same primary
diagnoses, those with a secondary diagnosis of substance abuse stayed an average of more than
a half a day longer, 9:3) days compared wi th 8.6 days. Whnle this is not insignificant, the
marginal effect of substance abuse as a secondary diagnosis ini the Medicare population is
much smaller than what was found for Med'2caid where substance abusers stayed twice as long
as non-substance abusers..
This smallll differential betweeni length of stay for Medicare patients with and without
substance abuse problems is most likely at signifiicant underestimate of the full effect of aleohol
and drugs as a complication. Many cases that actually involved alcohol or drug problems weree
noti recorded as having tihis secondary diagnosis. Since, in our analysis. t'hese cases would be
counted in the non-substance abuse group, they may be artificiall} inflating the length of stay
for that group. If the secondary diagnosis of substance abuse had been correctly noted, the
7

. r
Graph 3: Portion of Medicare Smokers Who Have Smoked Heavily
(Those Who Ilave Smoked More Than 10 Cigarettes per Day for Over 35 Years)
Current
Hecz vy
58
Other
42
Former
ZVCES9szoz

difference between the two. : groups would have been greater. Nevertheless; despite this
problem, complications resulting from a secondary diagnosis of substance abuse accounted for:
$108 million in added cost' to Mediicare:
These figures represent average lengths of stay in~ Iwledicare but, for some diseases,
the difference in length of stay was much higher. For example for patients with pancreatitis,
those requiring major joint and limb reattachments, and those wirth pathol+ogicall fractures with
a, secondary dlagnosis of substance abuse, patients stayed approximately twice as long as theirr
non-substanee abusing, counterparts (pancreatitis 17 days vs. 8 days; major joint 24 vs. 10;
pathological fractures 17 vs. 10) (Graph 4).
However,, for other diseases, the AhAS was, in fact, shorter for some Medicare
patients with a secondary diagnosis of substance abuse: For example, patients with respiratory
infections and utflflammations cellulitis, and G,T obstructiion, who also had a secondary
diagnosis of substance abuse, stayed less time in the hospital than non-substance abusers (e:g.,
respiratory infections 8.4 days vs. 11.7 days, cellulitis 7.4 vs. 816, and GI obstruction 3.7 vs.
7.4) This does nort rnean that patients with, substance abuse needed less care. There : are several
possiblie explanations for why these substance abusers had shorter lengths of stay. It may
result from an aberration in the data due to the small sample size of patients within these
diagnoses, or because of the premature departure caused by some patients signing out against
medical advice: However, it may also reflect the f nancial or social undesirability to hospitals
of many of these patients which, in turn, may lead to their early discharge or transfer to
another faciilit~?: In this context, it is worth noting, that, if this hypothesis is true, as the
forces
of competition in health~ careintensify., these resulkssugeest that such "undesirable"' pa2ientss
maN, . be increasingly pushed out prematurely from some institutions. Further: the nature of the
8

Graph 4: Conditions Where Medicare Patients w/
Substance Abuse Stay Longer
Average Length of Stay for Medicare Patients with and without Substance Abuse
Pancreatitis
Major Joint Procedures
Fractures
5 10 15 20 25
Average Length of Stay (Days)
SOURCE: National Hospital Discharge Survey, 1991.
Ow/o Substance Abuse
Ew/ Substance Abuse
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