Substance abuse: Myths and realities in the corporate sector

January 1, 2001

Longstanding misperceptions have led to inadequate funding for treatment. That's a costly management error, this expert argues.


Substance abuse:
Myths and realities in the corporate sector

Longstanding misperceptions have led to inadequate funding for treatment. That's a costly management error, this expert argues.

By Jeffrey C. Merrill, MD

Jump to:Choose article section... Myths and facts Widening the gap Scrambling for dollars Finding solutions

Purchasing health care benefits is like buying the weekly groceries. Both are expensive propositions in the minds of purchasers. The buyers' goals are similar: spend the least amount of money to buy the most healthful products and generate the most satisfaction. Both sets of purchasers are bombarded with claims but given little objective information—except for price—as to which specific products may best achieve these dual goals.

Of course benefits managers have a far more difficult and multidimensional job. They must look not only at the "brands" of managed care and other financing options, but also at the scope and nature of the benefit package. They must also consider the extent of provider choice, the amount of cost sharing, the carving in or out of behavioral health benefits, the link to in-house services like EAPs and the relative value of health benefits compared to other employee benefits.

Where do substance abuse benefits fit into this calculus? How do purchasers and managed care plans view them? Are they a necessary evil or central to good health care value? Is it even good business to provide for ample and continual treatment, keeping substance abusing employees in the company's workforce?

The truth is that substance abuse services are often given short shrift in terms of both choosing the best package and allocating sufficient dollars to purchase adequate benefits.

A recent study conducted by The MEDSTAT Group for the Center for Substance Abuse Treatment and Center for Mental Health Services of the Substance Abuse and Mental Health Services Administration revealed potentially troubling patterns of spending. Nationwide expenditures for mental health and substance abuse treatment topped $85 billion in 1997. The inflation-adjusted annual growth rate over the preceding decade averaged 3.7 percent, significantly below the comparable rate of 5 percent for total health expenditures. What's more, there was a definite shift of financial responsibility. Annual growth rates in the public sector averaged 12 percent for Medicare and 10 percent for Medicaid, while spending by private insurers declined 0.6 percent a year. As result, the public share of spending rose 3 points to 56 percent.

Further, in today's health care market, substance abuse benefits are frequently not even part of mainstream medical coverage provided to employees and their families. They are "carved out" as a behavioral health care service and, under that rubric, often not even given parity with their mental health counterpart.

In our cost-conscious environment, parity may not be as feasible as many advocates would hope, for there is a gulf between what the research community has learned and what society understands. Translating research into real-world practice is a problem in many areas of science, but it is particularly acute in the area of substance abuse. Why is this the case?

Myths and facts

Historically, both employers and employees have placed a low priority on substance abuse benefits. Employers are uncertain about both the causes of problems and the effectiveness of treatments. They see substance abuse as a potentially bottomless money pit for a population of marginal utility and, parenthetically, of marginal character.

Employees, for their part, are ambivalent about this benefit. "It won't happen to me" is their characteristic stance, despite strong evidence that one out of five will have a drug problem in any given year, according to the most recent National Household Survey on Drug Abuse. Employees also have their own prejudices and might prefer that substance abusers not remain as co-workers. They see abusers as costing a lot of money and increasing their own risk of industrial accidents.

Why have these views persisted? In part, they result from myths that surround substance abuse, the abuser and treatment. Here are some examples.

Substance abuse is an acute disease. If people do not get better after a treatment episode, it is their own fault. Substance abuse is a chronic condition with acute episodes. As with any chronic condition, such as cancer, remission rather than cure might be a more appropriate objective. Also, substance abusers are more likely than patients suffering from other chronic medical disorders to comply with treatment requirements. For example, while 40 percent of addicted patients comply with treatment attendance, only 30 percent of hypertensives comply with their medication regimen, according to a 1996 study by Drs. Charles O'Brien and Thomas McLellan at the University of Pennsylvania Medical School.

Substance abuse is not a disease at all. It stems from the weakness of the individual, the inability to resist temptation. Character weakness is no more the cause of relapse in a substance abuser than it is for someone with diabetes or heart disease. Personal behaviors can lead to relapse in all of these cases, yet there is much less inclination to blame the victim or withdraw treatment when a "medical" condition is involved.

Furthermore, the evidence of a genetic predisposition to addictive behaviors is now as persuasive as that which exists for heart disease, diabetes and hypertension. There is no longer any doubt that addiction should be viewed as a brain disease rather than as some weakness of spirit. Researchers at the National Institute on Drug Abuse have concluded that the fact that similar brain effects can be seen in users of a variety of addicting substances suggests common brain mechanisms underlying all addictions. As is the case with other brain diseases that are considered medical problems, actual physical changes can be observed in the brains of substance abusers.

Substance abuse is comparatively rare among workers. It is a problem of the poor and unemployed. The largest single economic group of substance users are people who have full-time jobs. They constitute, for example, almost two thirds of regular marijuana and/or cocaine users. While there has been an overall decrease in drug use in recent years, this decline has been much slower among full-time workers. According to the National Household Survey on Drug Abuse, 54 percent of all regular cocaine users had full-time jobs in 1991. Four years later the percentage had increased to 65 percent.

Substance abuse is a public health and social problem, not a corporate responsibility. Substance abuse has an enormous impact on many other corporate costs, including employee and dependent medical and mental health benefits, workers' compensation and long-term disability, corporate liability, worker attendance, productivity and product quality. A 1994 study found that the overall health care benefit costs for an untreated substance abuser were about $550 a month greater than those for an abuser who had received treatment.

The best strategy is exclusion of substance abusers from the workforce. This is a more practical and less costly approach for a corporation. While some companies claim that it is easier and cheaper to fire substance abusers, turnover and retraining costs, employee morale and corporate compassion often make firing a counterproductive and/or costly solution. In a shrinking labor market and an increasingly high-tech workplace, hiring and retraining are difficult and expensive propositions. Various surveys estimate the cost of replacing an employee in a range of $10,000 to as much as two years salary. Even in highly regulated industries like transportation and energy, these factors make treatment a better choice than dismissing those workers.

Treatment does not really work. No one is ever really cured. (A corollary is that it makes more economic and health sense to invest in medical and surgical interventions with tangible and immediate results.)

First of all, we are dealing with an essentially chronic disease where a full and permanent cure may not be the most realistic outcome. Like cancer, treatment success varies based on the severity of the disease and an individual's attitude toward recovery. Still, fewer addicts relapse within the first year than do patients with some major chronic diseases. O'Brien and McLellan found that 10 to 30 percent of addicts relapse compared with 30 to 50 percent of diabetics, 50 to 60 percent of hypertensives and 60 to 80 percent of asthmatics. Another University of Pennsylvania study published in The Lancet reported that there is much more evidence of "cures" for substance abuse than there is for diseases like cancer.

There are no good standards for selection of the appropriate mode of treatment for substance abusers. This is simply not true. Improved placement criteria and lower-cost, effective modalities are available. In addition, while a recurrence of a substance problem is viewed as a treatment failure, the fact is that, like any chronic disease, more than one treatment episode is necessary for many patients. There is growing evidence that, with each repeated treatment, outcomes improve and the chance for complete abstinence increases significantly.

There are no adequate means of assessing treatment outcomes. "We do not know what we are buying." While much outcomes analysis may not be able to demonstrate permanent abstinence, there is a growing body of literature on treatment's effect on reducing health care and other costs. A variety of studies from different states, even using different methodologies, have consistently demonstrated that every dollar spent on substance abuse treatment generates $6 to $7 in savings resulting from reduced medical care, welfare and criminal justice costs.

Widening the gap

Why is there such a large gap between commonly held beliefs and the facts surrounding this issue? In part, this results from some of the myths themselves. If people view substance abusers as less than sympathetic creatures of weak character, then any arguments regarding the true nature of the disease and the success of potential treatments will fall on deaf ears. Because of the myths, even those with the disease are much less likely to admit the problem or seek treatment than would a person with a medical complaint of equal gravity.

Substance abuse is also considered "someone else's disease," and there is little interest in fixing someone else's problem. This is so despite the fact that the behavior of a co-worker with a substance problem may lead to injury or even death for the straightest arrow on the assembly line. Further, in the minds of most people, substance abuse does not inspire the same level of immediate and visceral fear as do such "life-threatening" illnesses as cancer or heart disease.

At the same time, the continued lack of faith in treatment effectiveness makes employers somewhat impervious to the costs of not treating the disease. Even if employers are convinced that substance abuse can lead to other significant costs and lost productivity, the myth of ineffectiveness leads them to conclude that nothing can be done but to dismiss workers who do not respond quickly to treatment.

This divide between myth and reality perpetuates the inertia. As long as neither employees nor employers are dissuaded from their current views, where is the impetus for change? Even the constituency of abusers and their families may be in denial or afraid to speak out, given the beliefs of their employers and co-workers.

Scrambling for dollars

The managed care environment does little to ameliorate this situation. With the focus on containing costs, less money is allocated for so-called "marginal" services. Available dollars are likely to be spent on either the more "popular" or the more cost-effective services, as it is certainly easier to justify spending money on cancer patients than on substance abusers. Conversely, as further pressure is put on reducing benefit costs, without a vocal constituency, it is more acceptable to cut from behavioral health than from medical care services.

Carving out the behavioral health care benefit, which receives far less of the pie than does medical coverage, limits funds for substance abuse even more. Mental health has a larger constituency than does the substance abusing community and, thus, is more likely to receive a larger share of these limited dollars. As a society, we have become more understanding of the mental health patient. We are increasingly willing to perceive this as a "brain" disease rather than a character disorder. For society, the same connection does not yet exist for substance abuse.

Even where a generous benefit does exist for substance abuse, strict utilization review often creates a wide gap between what is theoretically offered and what is actually available to the patient. Managed care relies heavily on reducing the level and amount of services provided. Preadmission review, placement decisions, and concurrent reviews can often act as barriers to individuals receiving the level and quantity of care that they require.

For example, a study by this author found that substance abuse providers were actually reducing the level and quantity of services requested in anticipation of what the managed care organizations would in fact approve. This does not suggest a conspiracy toward underutilization. It simply acknowledges the fact that the sometimes conflicting goals of keeping costs down while assuring an adequate level of care can produce less than desirable outcomes.

Finding solutions

A senior official in the White House Office of National Drug Control Policy once commented that average citizens were not particularly interested in whether drug abusers got over their affliction; what interested them was whether the drug abuser would cost them more in taxes or cause them physical harm. While this may be too cynical a view of the public's attitude, it does raise an important flag.

It suggests that to persuade employers and society that investing in substance abuse treatment is a wise use of limited benefit dollars, we must demonstrate that it will yield significant dividends. From a corporate point of view, benefit dollars must be spent, as in the grocery analogy, to provide the most health and satisfaction for the least money. The question is not whether money will or will not be spent on substance abuse treatment. The question is whether it could be spent on something else (e.g., lower cost sharing, better prevention coverage, dental or eye care benefits) that has a greater constituency or represents a more "accepted" mode of medical care.

Given no large and vocal constituency and a lack of concern for the drug user, substance abuse treatment's best chance is to prove that dollars spent for this benefit can actually lead to reductions in other medical benefit costs, in disability and liability expenses, as well as to improvements in productivity, worker morale, quality and the corporate bottom line.

Making that case will demand answering a series of questions:

1. What evidence currently exists that would be relevant and convincing to decision makers about the cost-benefit of substance abuse treatment?

2. How can that evidence—and there is a considerable amount—be presented in a way that will be understandable, relevant and persuasive to benefits managers, senior executives, union leaders and employees?

3. What types of information and research still need to be generated? Where are the gaps in our practical knowledge? How could the research community work with the business community to ask the right questions and initiate useful research?

These are questions that would be asked before any business makes a new investment of resources. Anecdotal information or arguments from advocates will not suffice for answers. Objective and persuasive proof is required. Unfortunately, while good research is available, it often lies in scientific journals and is couched in statistical jargon that is out of the reach, not understandable and irrelevant to the decision makers.

How can this situation be changed so that solid and convincing information, relevant to the corporate mentality, is within the reach of those who need it? To achieve this, it is time for the academic community to work more closely with and understand the needs and interests of the corporate community. Only then will the mismatch between myth and reality of substance abuse and treatment disappear.

Jeffrey Merrill is University Research Professor and Professor of Psychiatry at the Robert Wood Johnson Medical School of the University of Medicine and Dentistry of New Jersey.


Jeffrey Merrill. Substance abuse: Myths and realities in the corporate sector. Business and Health 2001;1:31.