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Methods Used by The Center for Integrated Behavioral Health Policy to Calculate Public Sector Health Care Costs of Problem Drinking

Substance use problems are among the most common and costly health conditions affecting Americans: over 17 million adults have alcohol use disorders, either alcoholism or other, less severe, problems.1 Yet, despite widespread public awareness of its scope of alcohol problems in U.S. society, research shows that business leaders and policymakers remain largely in the dark about its heavy economic costs. Many policymakers have not examined the costs of undetected and untreated alcohol problems on their bottom lines.

To help sharpen understanding of the cost of alcohol problems in the public sector, The Center for Integrated Behavioral Health Policy, a research center based at The George Washington University Medical Center, devised a calculator that illustrates the degree to which alcohol problems generate avoidable health care costs and are linked to additional social problems. The Substance Use Disorder Cost Calculator provides concrete information, grounded in research, about the impact of alcohol abuse and dependence on public sector populations. The Alcohol Cost Calculator for the Public Sector, first released for public use in November, 2009, estimates the public sector impact of the continuum of alcohol problems — categorized here as alcohol dependence (alcoholism) and alcohol abuse2. It shows:

  • how common alcohol problems are in the public sector
  • hospital and emergency room use that is attributable to alcohol problems
  • the costs of excess health care rates of increased risk for social problems experienced by individuals with alcohol problems

This document describes in detail the methods that The Center for Integrated Behavioral Health Policy uses to derive these estimates.

Acronyms

  • BLS Bureau of Labor Statistics
  • NCQA National Committee on Quality Assurance
  • NHSDA National Household Survey on Drug Abuse
  • NSDUH National Survey on Drug Use and Health
  • SAMHSA Substance Abuse and Mental Health Services Administration
  • NIAAA National Institute on Alcohol Abuse and Alcoholism

Methods

Sources of Data

The Center for Integrated Behavioral Health Policy draws upon a large government-sponsored epidemiological surveys, the National Survey on Drug Use and Health3 (NSDUH) 2004-2006 (prior to the 2002 survey, NSDUH was known as the National Household Survey on Drug Abuse [NHSDA]), to create a calculator that can provide company-specific estimates of the prevalence of alcohol related problems in the public sector population. The Substance Abuse and Mental Health Services Administration (SAMHSA) of the Department of Health and Human Services conducts the NSDUH annually. The survey generates detailed estimates of the prevalence, symptoms, and consequences of alcohol problems in the civilian, non-institutionalized U.S. population. The NSDUH uses a representative national sample, surveying people in all 50 states and the District of Columbia. Since 1999, approximately 70,000 persons age 12 and older residing in households respond each year to questions for the annual NSDUH. SAMHSA produces publicly available data annually based on a representative subgroup of about 57,000 of the NSDUH respondents. For The Alcohol Cost Calculator, The Center for Integrated Behavioral Health Policy analyzed the pooled 2004 -2006 NSDUH data. A total of 166,786 individuals were represented in the pooled 2004-2006 datasets. All respondents who met the following criteria were included in our analyses:

  • 18 years old or older
  • Reported being covered through the Medicaid program or having no health insurance

Based on these criteria, a total of 38,526 individuals were included in analyses presented in the “public sector track” section of the calculator. A total of 128,260 were excluded because they were adolescents, or had health insurance other than Medicaid at the time of the interview.

The Center for Integrated Behavioral Health Policy used SPSS statistical software, version 15.0 (SPSS Inc., Chicago, IL) as the primary software to analyze the NSDUH. Additional analyses were conducted with the Survey Documentation and Analysis (SDA, version 3.0) computer program.4 The computer-assisted Survey Methods Program at the University of California, Berkeley developed and maintains the SDA. The data and SDA are part of the Substance Abuse and Mental Health Data Archive maintained by the Inter-University Consortium for Political and Social Research at the University of Michigan.

State Adjustments

The Center for Integrated Behavioral Health Policy computed state-level adjustments to reflect the substantial differences in substance use patterns from state to state. SAMHSA published state estimates of alcohol dependence and abuse for 2005 and 2006 from the NSDUH for the general population.5 The state rates published by SAMHSA were used to calculate adjustment factors by dividing the rates reported in each state, by the national prevalence. For example, the adult alcohol abuse and dependence adjustment factor for the District of Columbia was calculated by dividing the state-specific rate of alcohol abuse and dependence for adults 18 and older (10.5%) by the national adult prevalence during that same time period (7.9%) for an alcohol adjustment factor of 1.3. A similar alcohol adjustment factor was calculated for dependants by dividing the prevalence rate reported for all persons age 12 and older in the District of Columbia (9.9%) by the national prevalence rate reported during that time period (7.1%) for a alcohol adjustment factor of 1.4. These adjustment factors were then applied to prevalence rates calculated with the 2004-2006 NSDUH data in order to more accurately reflect differences in substance abuse and dependence rates among individuals in each state.

Prevalence of Alcohol Dependence and Alcohol Abuse

The NSDUH is constructed so that alcohol (and other drug) diagnoses can be derived from survey questions.6 Among public sector adults, 5.5 percent have alcohol dependence disorder, and 5.3 percent met diagnostic criteria for an alcohol abuse disorder. A total of 10.8 percent of public sector adults have an alcohol use disorder. These estimates are higher than estimates from the 1992 National Longitudinal Alcohol Epidemiology Survey, which finds a 6.7 percent prevalence of alcohol abuse and/or dependence among all persons with private health insurance,7 and the 7.1 percent prevalence of alcohol dependence and/or alcohol abuse among working adults from the NCS.8

Rates of Health Care Use

NSDUH respondents were asked how many times they had gone to a hospital emergency room in the previous 12 months, whether they had been hospitalized overnight during the previous year, and the number of nights in the hospital if they had been admitted. Mean number of emergency department visits and days in hospital are estimated.

Cost of Health Care Estimates

The Center for Integrated Behavioral Health Policy calculates the health care costs of alcohol-related problems from two sources. A per capita health care cost is derived from estimates of the economic costs of alcohol problems in the United States.9 In order to update these figures to reflect more current costs, these figures were adjusted to 2008 estimates using a similar methodology as the original reports.

For its detailed analyses of the costs of alcohol problems, The Center for Integrated Behavioral Health Policy extracts the following yearly direct health care costs related to alcohol use:

Table 1: Yearly Direct Health Care Costs
Treatment Yearly Cost
Treatment Costs $8.2 billion
Prevention and Early Intervention $1.2 billion
Treatment of Medical Consequences of Alcohol and Illicit Drug Consumption $30.6 billion
Medical Consequences of Fetal Alcohol Syndrome $5.6 billion
Insurance Administration $ 1.8 billion
Total: $ 47.3 billion

The total health care costs in 2008 are divided by the projected total U.S. population in 200810 to yield a per capita cost of $155.11
In addition, The Alcohol Cost Calculator estimates the costs of excess health care use. The estimated costs of extra hospital and emergency room use by persons with alcohol problems are computed by deriving the extra per capita rate of hospital and emergency room use for people with drinking problems. The resulting number of extra hospital days and emergency room visits are then multiplied by the Medicaid-specific rates published by the Healthcare Cost and Utilization Project.12

Additional Costs

Alcohol misuse is associated with a number of hazardous and costly social consequences including driving under the influence of alcohol or drugs, getting arrested, displaying violent behavior, and many others. The Alcohol Cost Calculator illustrates the social costs of problem alcohol use by comparing prevalence rates for public sector adults with an alcohol use disorder to those without an alcohol use disorder. Prevalence rates are calculated as the percentage of respondents who had experienced an event or problem within a given time period prior to the survey (usually 12 months). The difference in prevalence rates by alcohol use disorder can then be applied to the number of individuals with an alcohol problem to derive the increase or excess that is attributed to alcohol misuse.

Results

Prevalence of Alcohol Problems by State

The Calculator estimates state-specific prevalence rates for alcohol problems as outlined below.

Table 2: Estimated Prevalence of Alcohol Problems by State
State Alcohol Problems (%)
Alabama 9.1%
Alaska 10.9%
Arizona 11.6%
Arkansas 10.9%
California 11.8%
Colorado 12.7%
Connecticut 12.0%
Delaware 9.4%
District of Columbia 14.4%
Florida 10.6%
Georgia 9.6%
Hawaii 10.0%
Idaho 11.2%
Illinois 10.8%
Indiana 10.9%
Iowa 12.4%
Kansas 11.7%
Kentucky 8.6%
Louisiana 10.4%
Maine 10.4%
Maryland 9.7%
Massachusetts 11.7%
Michigan 11.9%
Minnesota 13.0%
Mississippi 9.2%
Missouri 12.3%
Montana 14.7%
Nebraska 13.6%
Nevada 11.3%
New Hampshire 11.4%
New Jersey 8.7%
New Mexico 11.4%
New York 9.8%
North Carolina 9.3%
North Dakota 13.1%
Ohio 11.0%
Oklahoma 10.5%
Oregon 9.3%
Pennsylvania 9.5%
Rhode Island 12.3%
South Carolina 10.4%
South Dakota 14.1%
Tennessee 9.5%
Texas 11.4%
Utah 10.6%
Vermont 12.3%
Virginia 10.0%
Washington 11.0%
West Virginia 8.9%
Wisconsin 12.0%
Wyoming 12.9%
Total US 10.8%

Adult males in the public sector are over twice as likely to have an alcohol problem as females.13 Individuals with alcohol problems also tend to be younger.14

State-specific estimates of the number of individuals who have an alcohol problem are computed by multiplying the NSDUH prevalence rates of alcohol problems by its adjustment factor.

Example: For 1000 public sector adults in the District of Columbia, the Calculator calculates alcohol problems by multiplying the overall public sector prevalence rate for alcohol problems (10.8 percent) by the District of Columbia alcohol adjustment factor previously calculated (1.33) to derive an estimate of 144 individuals with an alcohol use disorder in the District of Columbia.

Health Care Utilization

Hospital use: Estimates of the number of excess hospital nights attributable to alcohol problems are computed by multiplying the percentage of persons with alcohol problems who reported any overnight hospital stay by the average number of nights for those who spent at least one night. The average per capita hospital use rate for adults with no alcohol problems is then calculated in the same way and subtracted from the rates for adults with alcohol problems.

Example: To continue the example of 1000 public sector adults in the District of Columbia, the number of hospital days for persons with an alcohol problem (5.3 days) is multiplied by the percentage who reported an overnight stay in the hospital (11.5 percent) to generate rates of hospital days per person with an alcohol problem. The number of expected hospital days in this population without an alcohol problem is then calculated by multiplying the percentage of those without a alcohol problem reporting an overnight stay in the hospital (13.5 percent) with the average number of nights (5.6 nights) spent by patients who were hospitalized. This rate of hospital days for persons with no alcohol problem is subtracted from the rates for alcohol problems. The difference is multiplied by the number of people with alcohol problems to generate the estimate of the number of excess hospital days. The resulting estimate is 20 fewer hospital days attributable to individuals with an alcohol problem.

Note Concerning Hospital Utilization for Adults with an Alcohol Use Disorder: It is important to note that the calculator estimates that public sector adults with alcohol use disorders (abuse or dependence) have lower rates of hospitalization than public sector adults without an alcohol use disorder. One explanation for this finding is that while adults with alcohol dependence use disorder are more likely to report a hospitalization than adults without an alcohol use disorder (14 percent versus 13 percent) , adults that meet the diagnostic criteria for alcohol abuse disorder are significantly less likely to report a hospitalization than adults without an alcohol use disorder (9 percent versus 14 percent).

Emergency room use: Individuals with alcohol problems reported greater emergency service use in the past year than individuals without alcohol problems (.97 ER visits per individual with an alcohol problem versus .85 visits per individual without an alcohol problem). Perhaps one reason for this higher use of emergency rooms is that individuals with alcohol problems are much more likely to drive while under the influence of alcohol or drugs. Over half of public sector adults with an alcohol problem (53%) report driving under the influence of alcohol or drugs during the past year, compared to 14% of individuals without an alcohol problem.

Estimates of the number of excess emergency room visits are computed by subtracting the average number of emergency room visits for persons without an alcohol problem from the average number for persons with an alcohol problem. This number, which reflects the average excess number of visits attributable to individuals with an alcohol problem, is then multiplied by the estimated number of individuals with an alcohol problem. The average number of emergency room visits is generated by state.

Example: Following the procedure outlined above,1000 public sector adults in the District of Columbia are responsible for an additional 17 emergency room visits per year, at a cost of over $20,000..

Table 3: Number and Cost of Excess Emergency Room Visits Annually (per 1000 individuals) – Alcohol Problems
State Excess ER Visits- Cost of Excess ER Visits
Alabama 10.9 $13,107.2
Alaska 13.1 $15,759.9
Arizona 13.9 $16,696.1
Arkansas 13.1 $15,759.9
California 14.1 $17,008.2
Colorado 15.3 $18,412.5
Connecticut 14.4 $17,320.3
Delaware 11.3 $13,575.3
District of Columbia 17.2 $20,753.1
Florida 12.7 $15,291.8
Georgia 11.5 $13,887.4
Hawaii 12.1 $14,511.6
Idaho 13.5 $16,228.0
Illinois 13.0 $15,603.8
Indiana 13.1 $15,759.9
Iowa 14.9 $17,944.4
Kansas 14.0 $16,852.1
Kentucky 10.4 $12,483.1
Louisiana 12.4 $14,979.7
Maine 12.4 $14,979.7
Maryland 11.7 $14,043.5
Massachusetts 14.0 $16,852.1
Michigan 14.3 $17,164.2
Minnesota 15.6 $18,724.6
Mississippi 11.0 $13,263.3
Missouri 14.8 $17,788.4
Montana 17.6 $21,221.2
Nebraska 16.3 $19,660.8
Nevada 13.6 $16,384.0
New Hampshire 13.7 $16,540.1
New Jersey 10.5 $12,639.1
New Mexico 13.7 $16,540.1
New York 11.8 $14,199.5
North Carolina 11.1 $13,419.3
North Dakota 15.7 $18,880.6
Ohio 13.2 $15,915.9
Oklahoma 12.6 $15,135.7
Oregon 11.1 $13,419.3
Pennsylvania 11.4 $13,731.4
Rhode Island 14.8 $17,788.4
South Carolina 12.4 $14,979.7
South Dakota 17.0 $20,441.0
Tennessee 11.4 $13,731.4
Texas 13.7 $16,540.1
Utah 12.7 $15,291.8
Vermont 14.8 $17,788.4
Virginia 12.1 $14,511.6
Washington 13.2 $15,915.9
West Virginia 10.6 $12,795.1
Wisconsin 14.4 $17,320.3
Wyoming 15.4 $18,568.6
Total US 13.0 $15,603.8

Social Costs

Serious Psychological Distress

The NSDUH assesses whether respondents have had serious psychological distress, formerly referred to as serious mental illness (SMI) in versions of the NSDUH prior to 2004. Nonspecific serious psychological distress is determined using a six item scale that measures how frequently respondents experienced distress symptoms during the one month in the past year when they were at their worst emotionally. The symptoms of distress include the following: feeling hopeless, feeling nervous, feeling restless or fidgety, feeling sad or depressed, feeling everything was an effort, and feeling worthless. Public sector adults with alcohol problems are approximately twice as likely to have had serious psychological distress at some point in the previous year (31 percent vs. 16 percent) than adults without an alcohol problem. To estimate the number of adults who are likely to have had serious psychological distress, the Calculator multiplies the expected number of adults with alcohol problems by the difference between the rate of serious psychological distress among adults with alcohol problems and the rate of serious psychological distress among adults with no alcohol problems.

Much of the serious psychological distress found in this population is due to depression. Public sector adults with alcohol problems are twice as likely to report a co-occurring major depressive episode in the previous 12 months as individuals without alcohol problems. Among public sector adults, 20 percent of those with an alcohol problem had a co-occurring depressive disorder, and 10 percent of adults with no alcohol problem had major depression.

Anxiety

The NSDUH assesses whether respondents have experienced anxiety during their lifetime, and during the past 12 months. Adults with alcohol problems are more likely to report experiencing anxiety in the past year (9 percent) than adults without alcohol problems (6 percent). Adults with alcohol problems are also more likely to report experiencing anxiety in their lifetime (13 percent) compared to adults without alcohol problems (8 percent). To estimate the number of adults who are likely to experience anxiety and also have an alcohol problem, the Calculator multiplies the expected number of adults with alcohol problems by the difference between the rates of adults who have reported experiencing anxiety among those with alcohol problems compared to those without alcohol problems.

Smoking

The NSDUH assesses whether respondents have been addicted to nicotine within the past month. Adults with alcohol problems are almost twice as likely to have nicotine dependency (33 percent vs. 18 percent). To estimate the number of public sector adults who are likely to have a nicotine dependence (smoking) problem, the Calculator multiples the expected number of adults with alcohol problems (previously calculated by the Calculator) by the difference between the rate of nicotine dependence of adults with alcohol problems and the rate of nicotine dependence of adults without alcohol problems.

Problems with Law Enforcement

The NSDUH assesses whether respondents have ever been arrested and booked. Adults with alcohol problems are over twice as likely to have been arrested and booked (54 percent vs. 23 percent). To estimate the number of adults who are likely to have a problem with law enforcement, the Calculator multiples the expected number of adults with alcohol problems by the difference between the rate of recent arrests of adults with alcohol problems and the rate of arrests in the previous year of adults without alcohol problems.

Driving Under the Influence of Alcohol and/or Illicit Drugs

The NSDUH assesses whether respondents have driven under the influence of alcohol or other drugs in the previous year. Adults with alcohol problems are over three and a half times more likely to have driven under the influence in the past year (53 percent vs. 14 percent). To estimate the number of adults who are likely to have a problem with driving under the influence of alcohol or drugs within the previous year, the Calculator multiples the expected number of adults with alcohol problems by the difference between the rate of driving under the influence of alcohol or drugs of adults with alcohol problems and the rate of DUI of adults without alcohol problems.

Violence

The NSDUH assesses whether respondents have been violent by attacking someone with the intent to cause serious bodily harm in the previous year. Adults with alcohol problems are much more likely also to report that they have attacked someone (11 percent) than individuals without alcohol problems (2 percent).To estimate the number of adults who are likely to have displayed violent behavior and who also have a n alcohol problem, the Calculator multiplies the expected number of adults with alcohol problems by the difference between the rates of adults who have reported attacking someone among those with alcohol problems compared to those without alcohol problems.

Co-Occurring Disorders

The NSDUH results can also be used to assess the degree to which individuals with an alcohol problem meet the meet the diagnostic criteria for other substance use disorders. Adults who currently meet the diagnostic criteria for an alcohol abuse or dependence disorder are significantly more likely to meet the diagnostic criteria for illicit drug abuse or dependence (23 percent) than employees that individuals without an alcohol problem (4 percent).

Domestic Violence

Past versions of the NSDUH have asked respondents to report whether they have hit, or attempted to hit, their spouse or partner in the past 12 months. Data from the last year that this question was included in the NSDUH, 2002, were used to estimate the prevalence of domestic violence cases among individuals and families with and without alcohol problems. These rates were then applied to 2004-2006 alcohol prevalence rates to estimate the excess cases of domestic violence that can be attributed to alcohol problems.

To estimate the number of adults who are likely to have been a victim of domestic violence in the previous year, the Calculator multiples the expected number of adults with an alcohol problem by the difference between the rates of victimization among adults with (20 percent) and without alcohol problems (10 percent).

Prevalence Rates of Social Problems

The following table summarizes the prevalence of the social problems described above based on the presence of alcohol problems.

Table 4: Prevalence of Social Problems in the Public Sector

With Alcohol Problem (percent) No Alcohol Problem (percent) Difference (percent)
Individual
Serious Psychological Distress (past year) 30.7% 16.2% 14.5%
Major Depressive Disorder (past year) 19.9% 9.7% 10.2%
Anxiety (past year) 8.5% 5.6% 2.9%
Ever Arrested and Booked 54.2% 22.6% 31.6%
DUI (past year) 52.7% 14.4% 38.3%
Nicotine Dependence 32.6% 17.7% 14.9%
Was a Victim of Domestic Violence 20.3% 9.7% 10.6%

Conclusion

The Alcohol Cost Calculator gives a simple estimate of the financial toll caused by alcohol abuse and dependence, illuminating an area with significant social and financial costs. Given the high costs associated with alcohol use disorders, considerable savings can be achieved by addressing these issues in people receiving public sector services. Providing these individuals increased access to treatment for the full spectrum of alcohol will not only improve the health of this population, but will also result in significant cost savings.

The Center for Integrated Behavioral Health Policy, November, 2009

Footnotes:

  1. U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. NATIONAL SURVEY ON DRUG USE AND HEALTH, 2005. ICPSR04596-v1. Research Triangle Park, NC: Research Triangle Institute, 2006. Ann Arbor, MI: Inter-university Consortium for Political and Social Research, 2006.
  2. Throughout this paper and The Alcohol Cost Calculator, the terms “alcohol use disorder” and “alcohol problems” are used interchangeably to refer to persons who meet the diagnostic criteria specified in the latest edition of the Diagnostic and Statistical Manual for alcohol dependence disorder and alcohol abuse disorder .
  3. U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies, NATIONAL SURVEY ON DRUG USE AND HEALTH, 2004-2006 Combined Dataset. Research Triangle Park, NC. Research Triangle Institute. Ann Arbor, MI: Inter-University Consortium for Political and Social Research.
  4. Substance Abuse and Mental Health Data Archive. Available from the World Wide Web: http://sda.berkeley.edu/
  5. Substance Abuse and Mental Health Services Administration, Office of Applied Studies. State Estimates of Substance Use from the 2005-2006 National Surveys on Drug Use and Health. OAS Series #H-33, DHHS Publication No. (SMA) 08-4311, Rockville, MD, 2008. http://www.oas.samhsa.gov/2k6state/TOC.cfm
  6. The NSDUH includes a common set of questions about alcohol use that are sufficient to construct DSM IV diagnoses of alcohol dependence disorder and alcohol abuse disorder during the year prior to the interview (sampling, diagnostic algorithm, and reliability studies). Available from the World Wide Web:
    http://www.icpsr.umich.edu/SDA/SAMHDA/04596-0001/CODEBOOK/4596.htm .
  7. Brant, B. 1995. Variations in the Prevalence of Alcohol Use Disorder and Treatment by Insurance status. Frontlines, June 1995. The 1992 National Longitudinal Alcohol Epidemiology Survey sample consisted of 42,862 adults, 18 years of age and older, and was designed to provide detailed information about alcohol use and related disorders in the general population. In addition to diagnostic questions, the NLAES asked a broad range of background demographic questions, including work history and health care use.
  8. Kessler, R.C. NATIONAL COMORBIDITY SURVEY: REPLICATION (NCS-R), 2001-2003 (Computer file). Conducted by Harvard Medical School, Department of Health Care Policy/University of Michigan, Survey Research Center. ICPSR04438-v3. Ann Arbor, MI: Inter-University Consortium for Political and Social Research.2006.

    Critics have suggested that the algorithm used to define alcohol dependence in the NCS-R was flawed in that interviewers were instructed to skip alcohol dependence items unless a subject endorsed at least one alcohol abuse item. For a brief discussion of these issues, see Cottler, L.B. Drug Use Disorders in the National Comorbidity Survey: Have We Come a Long Way? Arch Gen Psychiatry. 2007;64(3):380-381 and Kessler, R.C. and Merikangas, K.R.. Drug Use Disorders in the National Comorbidity Survey: Have We Come a Long Way?—Reply Arch Gen Psychiatry. 2007;64(3):381-382.
  9. Harwood, HJ, 2000. Updating Estimates of the Economic Costs of Alcohol Abuse in the United States. National Institute on Alcohol Abuse and Alcoholism. Available from the World Wide Web: http://pubs.niaaa.nih.gov/publications/economic-2000/ 7. See author's note on the calculation of updates .
  10. The total estimated U.S. population used by the calculator is 305,500,000.
  11. This number was calculated by dividing the total health care costs attributed to alcoholism by the total U.S. population estimated by the U.S. Census. Total health care spending of 45.0 billion dollars was divided by the 2007 population estimate of 302,633,421 for an estimate of $150.35 per capita spending.
  12. The average daily hospital charge was estimated with data from HCUPnet. Healthcare Cost and Utilization Project, Agency for Healthcare Research and Quality, Rockville, MD. http://hcupnet.ahrq.gov/HCUPnet.jsp
  13. 15.5 percent for males, 6.6 percent for females in the public sector.
  14. 41 percent of public sector adults with an alcohol problem are under 26 years of age. Only 25 percent of public sector adults with no alcohol use disorder are under 26 years old, p<.001).