I left last April’s Business Group on Health conference quite discouraged. I had known going in that employers would be highly focused on the problems driving their biggest cost areas – musculoskeletal pain, cancer, weight loss drugs, etc. What I hadn’t expected was that few employers seemed to be aware of how much addiction was affecting their healthcare costs.
I found this shocking. According to the 2023 National Study on Drug Use and Health, 8% of Americans over the age of 17 are struggling with a moderate or severe addiction to alcohol and/or illicit drugs. If previous estimates hold true, 75% of these individuals between the ages of 18 and 64 are in the workforce. While prevalence varies a bit by industry, employers can assume that roughly one out of every 12 of their employees has a moderate to severe SUD!
Employers pay dearly for the
8% of employees who are addicted
The costs to employers of having so many members of their workforce in active addiction are stark:
Expensive medical interventions: People with untreated substance use disorders tend to be heavy hospital and detox users. Our data shows that in the year before entering addiction treatment, the average patient utilized about $25,000 worth of emergency department visits, unplanned hospital stays and detox treatments:
Increased cost to treat other conditions: Research has shown that the cost of treating a condition such as diabetes or COPD increases as much as four-fold when the patient also is struggling with mental illness and addiction:
Higher absenteeism: Addicted employees take 41% more non-vacation/non-holiday days off than employees without an SUD. Interestingly, employees who are in recovery from addiction take fewer days off than the average employee:
- Increased turnover: Workers with an untreated SUD have much higher rates of turnover than the general workforce. A conservative estimate is that recruiting and training a new employee costs about 21% of their annual salary:
Addiction treatment costs: Once an employee or a dependent accepts the need for treatment, the cost for a residential stay is often in the tens of thousands of dollars. As if this isn’t expensive enough, addiction is a chronic disease and relapse is common; many individuals will need multiple episodes of treatment before they’re able to fully recover.
The Five Star Addiction Treatment Market Helps Employers Save Lives and Money
To help employers find rehabs providing excellent treatment, Conquer Addiction launched the Five Star Addiction Treatment Market in October 2024. Only addiction treatment centers with independently-verified superior post-treatment abstinence rates have been invited to join the market:
All have defined specific episodes of treatment they’ll provide for a bundled cash price. And the leaders of these market centers have aligned themselves with the best interest of their patients and of employers by committing to pay for a second episode of treatment for any patient who relapses within 90 days of completing their program. Wow!
Employers can find rehabs in the Five Star Addiction Treatment Market and check out their bundled treatment offers on www.conquer-addiction.org. Employers pay the treatment center directly:
Employers Are Starting to Pay Attention
My experience at the RosettaFest employer healthcare conference last fall was a lot more encouraging. This rapidly-growing conference is attended by employers, brokers and providers who are following Dave Chase’s Rosetta Health principles to provide better – and cheaper – healthcare to employees. During the conference, I talked to several insurance advisors with clients who were struggling to keep the treatment costs of addicted employees from breaking the bank. They were very interested in learning about the transparent medical market Conquer Addiction was launching.
While there are less than a dozen Five Star Addiction Treatment Market rehabs today, we plan to expand to hundreds more in the next two years by using claims and death registry data to identify other highly-effective addiction treatment centers in the U.S.
