About the Alcohol Cost Calculator

Methods Used by Ensuring Solutions to Calculate Company-Specific Business Costs of Problem Drinking

Alcohol 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 The cost of these problems to the nation’s economy is enormous: $185 billion yearly.² 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.³ Many businesses have not examined the costs of undetected and untreated alcohol problems on their bottom lines.

To help sharpen understanding of the business cost of drinking, Ensuring Solutions to Alcohol Problems, an initiative based at The George Washington University Medical Center, devised a calculator that shows how alcohol-related problems generate avoidable health care costs and reduce workforce productivity. The Alcohol Cost Calculator provides concrete, industry-specific information, grounded in research, about the impact of problem drinking. The Alcohol Cost Calculator, first released for public use in April 2003, and updated in March 2005 and December 2007, estimates the business impact of the continuum of alcohol problems — categorized here as alcohol dependence (alcoholism) and alcohol abuse ⁴ — on 13 sectors of U.S. industry. It shows:

how common alcohol problems are in each sector
how many work days are lost due to alcohol problems
the extent of alcohol-related hospital and emergency room visits of employees and their families
the costs of missed work days and health care of employees and their families

This document describes in detail the methods that Ensuring Solutions uses to derive these estimates.

Acronyms

BLS Bureau of Labor Statistics
NCQA National Committee on Quality Assurance
NCS National Comorbidity Survey
NHSDA National Household Survey on Drug Abuse
NSDUH National Survey on Drug Use and Health (Replaced NHSDA beginning with the 2002 survey)
SAMHSA Substance Abuse and Mental Health Services Administration
NIAAA National Institute on Alcohol Abuse and Alcoholism

Methods

Sources of Data

Ensuring Solutions draws upon two large government-sponsored epidemiological surveys, the National Survey on Drug Use and Health3 (NSDUH) 2004 and 2005 (prior to the 2002 survey, NSDUH was known as the National Household Survey on Drug Abuse [NHSDA]),⁵ and the National Comorbidity Survey (NCS),⁶ to create a calculator that can provide company-specific estimates of the prevalence of alcohol-related problems among employees and their families. 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, tobacco, and illicit drug use 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, Ensuring Solutions analyzed the pooled 2004 and 2005 NSDUH data. All respondents in the 2004 and 2005 surveys who were 18 years of age and older and who were employed full- or part-time, 53,551 adults, are included in analyses. Ensuring Solutions excluded 57,956 respondents because they were retired, adolescents, students not in the workforce, or homemakers at the time of the interview.

The other major data source, NCS, includes nationally representative data on 8098 respondents 15-54 years of age who participated in a detailed diagnostic interview between 1990 and 1992. The Survey Research Center (SRC) at the University of Michigan conducted the NCS under the direction of Ron Kessler (now at Harvard University).⁷ The National Institute on Mental Health, the National Institute on Drug Abuse and the W.T. Grant Foundation funded the study. In addition to diagnostic information, the NCS collected data about employment status, health care service utilization and productivity. The NCS respondents older than 18 who were employed full-time or part-time at the time of the interview are included in the Calculator analyses.

Although a more recent version of the NCS was released in 2004, the calculations included in our analyses are based on the original version of the study. Our decision to use the original NCS numbers is largely based on criticism of the methodology used to identify alcohol dependence in the revised version of the survey. ⁸ Critics have suggested that the algorithm used in the latest version of the NCS study tends to greatly underestimate the prevalence of alcohol dependence. In fact, the 12-month prevalence rates reported by the revised Comorbidity study was 1.3%, significantly less than dependence rates suggested by the original NCS study, and other representative samples.
Ensuring Solutions used the Survey Documentation and Analysis (SDA, version 3.0) computer program as the primary software to analyze the NSDUH and the NCS data. ⁹ 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. Additional analyses were conducted using SAS statistical software, version 8.2 (SAS Institute, Inc, Cary, NC).

State Adjustments

Ensuring Solutions computed state-level adjustments to reflect the substantial differences in alcohol use patterns from state to state. SAMHSA published state estimates of alcohol dependence and abuse for 2004 and 2005 from the NSDUH for the general population 18-25 years old, and 26 years and older.¹⁰ To obtain a weighted alcohol use disorder prevalence rate for each state for working adults 18 and older, the SAMHSA state prevalence rates for both age groups were weighted according to the percentage of the state population 18 and older that each category represents according the U.S. Census Bureau. Nationally among individuals 18 and older, 14.9 percent are ages 18-26 years and 85.1 percent are 26 years and older. These percentages vary slightly by state. An adjustment rate was then calculated to reflect the higher national alcohol use disorder prevalence among workers when compared to the overall population (9.2 percent for workers over 18 years of age vs. 7.9 percent for all persons over 18). Ensuring Solutions computed this adjustment rate by dividing the overall prevalence of alcohol dependence or abuse for people aged 18 and older working full- or part-time (9.2 percent) by the prevalence of alcohol dependence or abuse for people aged 18 and older (7.9 percent), yielding an adjuster of 1.16. The weighted prevalence rate for each state was then multiplied by the adjustment rate, to yield the estimated prevalence of alcohol problems among workers in the state. To estimate the number of dependents with alcohol problems, the Calculator uses the prevalence of alcohol problems by state published by SAMHSA for the general state population.

Ensuring Solutions also computed geographic adjustments at the city level for the 15 largest metropolitan statistical areas (MSAs). SAMHSA pooled data from 2002-2004 to calculate alcohol dependence and abuse prevalence estimates for substate regions. To estimate the number of workers and dependents with alcohol problems at the city-level, the calculator uses the same methods as described above.

Prevalence of Alcohol Dependence and Alcohol Abuse

The NSDUH is constructed so that alcohol (and other drug) diagnoses can be derived from survey questions.¹¹ Among employed adults, 3.9 percent have alcohol dependence disorder, and 5.3 percent met diagnostic criteria for an alcohol abuse disorder. A total of 9.2 percent of working adults have an alcohol use disorder. An additional 4.8 percent engage in heavy drinking but do not yet meet the criteria for abuse or dependence. These estimates are somewhat 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,¹² and the 7.1 percent prevalence of alcohol dependence and/or alcohol abuse among working adults from the NCS.¹³

Ensuring Solutions calculated the prevalence of alcohol problems in the workforces of 13 industry sectors from the NSDUH coding of respondents’ places of primary employment, using the Department of Labor standard industry classifications. The number of respondents by industry sector in the 2004 and 2005 NSDUH pooled sample range from 900 in agriculture to 10,179 in the education, health and social services sector.¹⁴ No industry sector analyses are computed with the NCS data due to its substantially smaller sample size.

Lost Work Days Estimates

The NSDUH asked respondents to recall how often they missed work due to illness and injury or skipped work in the past 30 days. The responses to these two questions are summed to measure the total number of missed workdays per month. Mean number of missed work days are generated by industry category and compared by alcohol use disorder.

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. Respondents to the NSDUH were also asked whether they had ever received any treatment in the previous 12 months or at any time in their lifetimes for alcohol-related problems. Mean number of emergency department visits and days in hospital are stratified and compared by alcohol use disorder and industry sector.

Cost of Absenteeism Estimates

The costs to businesses of missed work days are derived from the Bureau of Labor Statistics (BLS) Current Employment Statistics. ¹⁵ The most current average daily wages for salaried, nonsupervisory employees by industry as of July 2007 were extracted from BLS Current Employment Statistics. Where industry sectors have been combined due to limited sample size, wages were weighted according to the number of jobs in each sector and summed to derive the average wage for the combined industry sector. The cost of extra work days missed by employees with alcohol problems in each of the 13 industry sectors is computed by multiplying the estimated number of extra days missed (as computed above) by the BLS average daily wage. These cost estimates are undoubtedly conservative, since Ensuring Solutions did not adjust for fringe benefits or for the higher salaries of supervisory and management employees.

Cost of Health Care Estimates

Ensuring Solutions 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 in 1998.¹⁶ In order to update these figures to reflect more current costs, these figures were adjusted to 2007 estimates using similar methodology as the original 1998 report.

From its detailed analyses of the social costs of alcohol problems, Ensuring Solutions extracts the following yearly direct health care costs:

Table 1: Yearly Direct Health Care Costs
Treatment	Yearly Cost
treatment of alcoholism and alcohol abuse:	$7.7 billion
prevention and early intervention:	$1.5 billion
treatment of medical consequences of alcohol consumption:	$28.9 billion
medical consequences of fetal alcohol syndrome:	$53 billion
insurance administration:	$2.1 billion
Total:	$38.2 billion

The total health care costs in 2007 are divided by the projected total U.S. population in 2007 ¹⁷ to yield a per capita cost of $150.35. Since employers offering health insurance to their employees generally cover family members as well, the per capita health cost of alcohol-related problems is multiplied by 2.61, the estimated average household size in the United States in 2006 according to the US Census Bureau (the latest year in which data was available). ¹⁸

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, and then multiplying the per capita rates by the industry-specific alcohol problem prevalence rates. The resulting number of extra hospital days and emergency room visits are then multiplied by the American Hospital Association’s average daily hospital charge and by published estimates of emergency room costs.¹⁹

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 workers and family members 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 Industry Sector

Based on the analysis of the merged 2004 and 2005 National Survey on Drug Use and Health (NSDUH) data, most people with alcohol problems work, and the majority are full-time employees. Among adults who currently have the disease of alcoholism, 75 percent work (59 percent work full-time and 16 percent work part-time). An even higher workforce participation rate is found among adults who currently have alcohol abuse disorders: 82 percent are employed (66 percent worked full-time and 16 percent worked part-time). By contrast, only 68 percent of people with no alcohol problems are employed (55 percent full-time, 13 percent part-time). In fact, employed adults have a 27 percent greater risk of having any alcohol problem compared to adults not in the workforce.²⁰

One employee in twenty-six (3.9 percent) has alcoholism and one in nineteen (5.3 percent) has an alcohol abuse disorder. Male employees are over twice as likely to have an alcohol problem as female employees. ²¹ Employees with alcohol problems tend to be younger, on average than the general workforce population. ²²

Rates of alcohol problems vary greatly from industry to industry. Alcohol dependence rates are highest for males in mining and construction (7.5 percent), hospitality/leisure (7.2 percent), and lowest among females in agriculture (0.6 percent), public administration (1.2 percent), and wholesale (1.3 percent). Similar differences between male and female employees hold for other alcohol problems: alcohol abuse is concentrated among males in wholesale (10.3 percent), hospitality/leisure (10.2 percent), information/communication (9.3 percent), and retail (8.5 percent), and lowest among women in agriculture (1.3 percent) and transportation/utilities (2.0 percent)

Table 2: Prevalence (in percent) of Alcohol Problems by Industry Sector
Industry Sector	Number of Respondents	Alcohol Dependence			Alcohol Abuse
Industry Sector	Number of Respondents	Male	Female	All	Male	Female	All
Mining & Construction	4952	7.5	6.2	7.4	7.7	3.8	7.3
Leisure, Hospitality, Arts	7163	7.2	5.8	6.5	10.2	6.8	8.5
Professional	5043	5.4	3.6	4.6	7.9	3.5	6.0
Agriculture, Forestry, Fishing, and Hunting	900	4.9	0.6	3.9	3.8	1.3	3.3
Retail Trade	7274	4.9	2.9	3.9	8.5	3.3	5.8
Wholesale Trade	1442	4.3	1.3	3.4	10.3	4.0	8.5
Finance & Real Estate	3085	4.2	3.1	3.6	7.0	4.5	5.6
Education, Health & Social Services	10179	4.1	1.8	2.3	5.3	2.5	3.1
Other Services	2862	3.8	1.8	2.8	5.1	2.0	3.6
Transportation & Utilities	2081	3.5	2.8	3.4	5.6	2.0	4.8
Information & Communication	1150	3.4	1.8	2.7	9.3	3.0	6.4
Manufacturing	5352	3.4	4.0	3.6	6.1	2.5	5.0
Public Administration	2068	1.9	1.2	1.6	4.5	2.9	3.7
TOTAL	53551	4.8	2.1	3.9	7.1	3.3	5.3

Company-specific estimates of the number of employees who are problem drinkers are computed by multiplying the NSDUH prevalence rates of alcohol dependence and alcohol abuse among adult employees in the industry sector by the total number of a company's employees, and adding the two results. When a company's state location is indicated, the company-specific estimates are adjusted for state prevalence rates of alcohol use disorders among workers and in the general population.

Example: For an automobile parts manufacturing company with 1,000 employees, the Calculator uses the manufacturing sector’s prevalence estimates of 3.6 percent alcohol dependent and 5.0 percent alcohol abuse to derive an estimate of 90 problem drinking employees. The estimate of 90 only applies for the national average; the Calculator for Business also takes into account adjusters by state.

Company-specific estimates of the number of employees' family members who are problem drinkers are computed by multiplying the NSDUH general population prevalence rates for alcohol dependence and alcohol abuse by 1.61 (the average number of dependents in 2006 as projected from the 2000 U.S. Census) times the total number of employees, and adding the two results. No industry sector adjustment is made for employees’ family members.

Example: For the automobile parts manufacturer with 1,000 employees, the general population prevalence of alcohol use disorders of 7.7 percent for the U.S. population is multiplied by 1610 (an estimate of the number of dependents for 1000 employees) to derive an estimate of 124 problem-drinking family members. This estimate only applies for the national average; the Alcohol Cost Calculator for Business also takes into account adjusters by state5.

Workplace Absenteeism

Employees with alcohol problems miss substantially more work days each month than other employees. Alcohol dependent employees missed 1.49 work days per month. Employees who abused alcohol missed 0.93 days and employees with no alcohol use disorder missed 0.82 days.²³ These differences are significant and over time, add up to become quite costly as demonstrated below.

Table 3: Workdays Missed Annually Per Employee
Industry Sector	Alcohol Dependence	Alcohol Abuse
Mining & Construction	56	9
Leisure, Hospitality, Arts	45	10
Professional	30	6
Transportation & Utilities	29	7
Retail Trade	27	7
Wholesale	19	8
Finance & Real Estate	24	6
Agriculture, Forestry, Fishing, and Hunting	21	3
Information & Communication	20	8
Manufacturing	20	5
Other Services	17	4
Education, Health & Social Services	15	3
Public Administration	13	5
Total	26	6

Company-specific estimates of the number of extra work days missed are computed by applying the percent increases from expected workdays missed per month across industry sectors for alcohol dependence (81.7 percent) and for alcohol abuse (13.4 percent) to the industry-specific baseline average number of missed workdays per month. The resultant increases are summed to derive the total excess number of workdays missed that can be attributed to alcohol misuse.

Example: To continue the example of an auto parts manufacturing company with 1,000 employees, the average number of extra missed days of employees with alcohol dependence and alcohol abuse disorders per month ( .55 day and . 1 day per employee with an alcohol problem, respectively) times the prevalence of the disorders in the manufacturing sector (3.6 percent and 5.0 percent), when combined yields an estimate of 25 extra days lost each month and 300 days each year.

Employees with alcohol use disorders are significantly more likely to report that physical, mental or emotional problems limited the kind or amount of work they could do during most of the past 12 months. Among employees with alcohol dependence, 18.3 percent reported work limitations, compared to 9.8 percent who abused alcohol, and 8.4 percent with no alcohol problems.²⁴

Health Care Utilization

Hospital use: After controlling for age and sex, employees who have alcoholism have a 55 percent greater odds of reporting an overnight stay in a hospital as employees with less severe and no alcohol problems. Likewise, alcohol dependent family members have a 45% greater odds of hospitalization as compared to people with lesser or no alcohol problems.²⁵ Alcohol dependence is also a significant predictor of number of days hospitalized as alcohol dependent employees and family members stayed, on average, between 0.5 to 1.0 days longer than people without alcohol dependence.²⁶

Company-specific estimates of the number of excess hospital nights are computed by multiplying the percentage of persons with alcohol dependence 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 subtracted from the rates for adults with alcohol dependence. Unfortunately the number of people responding to this question in the NSDUH was too low to make specific estimates by industry sector. Instead, the Calculator predicts the number of excess hospital days for employees and their families based on general population estimates. All prevalence and means estimates are age-adjusted.

Example: In the example of the auto parts manufacturer, the number of hospital days for persons with alcohol dependence (4.5 days) is multiplied by the percentage who reported an overnight stay in the hospital (8.8 percent) to generate rates of hospital days per person with an alcohol problem. The number of expected hospital days in an employed population without alcohol problems is then calculated by multiplying the percentage of those without alcohol dependence reporting an overnight stay in the hospital (7.2 percent) with the average number of nights (3.7 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 dependence and alcohol use disorders. The difference is multiplied by the number of people with alcohol dependence in the workforce to generate the estimate of the number of excess hospital days. The excess number of hospital days for family members is calculated following the same method using the prevalence rates for the entire population. The resulting estimate is 10.7 excess hospital days.

Emergency room use: Alcohol dependent employees reported greater emergency service use in the past year than workers with alcohol abuse disorders and employees with no alcohol problems (0.64 ER visits per alcohol dependent employee, 0.47 visits per alcohol abusing employee, and 0.44 visits per employee with no alcohol problems).²⁷ Perhaps one reason for this higher use of emergency rooms is that adult employees with alcohol problems are much more likely to drive while under the influence of alcohol. Nearly two-thirds of employees with alcoholism (65 percent) and 76 percent of employees with alcohol abuse disorders report driving under the influence of alcohol during the previous year, compared with 14 percent of employees with no alcohol problems.²⁸

Table 4: Cost of Work Days Missed Annually (per 1,000 employees)
Industry Sector	ER Visits	Cost of Excess ER Visits
Wholesale Trade	48	$57,206
Mining/Construction	42	$50,056
Agriculture, Forestry, Fishing, and Hunting	34	$40,522
Leisure, Hospitality, Arts	27	$32,178
Manufacturing	26	$30,987
Professional	21	$23,836
Transportation & Utilities	20	$23,836
Retail Trade	20	$25,028
Education, Health & Social Services	19	$22,644
Information & Communication	19	$20,261
Other Services	19	$22,644
Public Administration	16	$19,069
Finance & Real Estate	13	$15,494
TOTAL	25	$28,603

Company-specific estimates of the number of excess emergency room visits are computed by subtracting the average number of emergency room visits for persons with no drinking problems from the average number for persons with alcohol problems, and then multiplying the results by the estimated industry sector prevalence of alcohol problems among employees and the general population prevalence of the disorders for employees’ families. The average number of emergency room visits are generated by industry sector.

Example: Following the same procedure used for to estimate excess hospital use, the number of excess emergency department visits for the parts manufacturing company with 1,000 employees is 26 annually.

Costs of Alcohol Dependence and Abuse to Business

Cost of missed work: Industry absorbs substantial costs because employees with alcohol problems miss more work than workers with no alcohol problems. The table below illustrates the estimated costs of missed days per 1,000 employees for the 13 sectors. Costs are based on the prevalence of alcohol problems in each sector and the sector-specific average number of excess missed days by employees with alcohol problems. The actual costs of missed days experienced by any specific company would vary from these estimates due to differences in wages, sick day reimbursement policies and employee replacement costs.29

Table 5: Cost of Missed Workdays Annually (per 1000 employees)
Industry Sector	Cost of Missed Workdays
Mining & Construction	$131,102
Professional	$70,266
Transportation & Utilities	$65,768
Information & Communication	$64,136
Leisure, Hospitality, Arts	$56,580
Finance & Real Estate	$54,817
Wholesale Trade	$49,455
Retail Trade	$43,243
Manufacturing	$41,160
Public Administration	$38,241
Education, Health & Social Services	$31,225
Other Services	$30,583
Agriculture, Forestry, Fishing, and Hunting	$26,496

Company-specific estimates of the cost of workdays missed by employees with alcohol problems are computed by multiplying the company’s likely number of missed days per year by the average daily wage for that sector. Where state information is provided by the user, the company-specific costs include a state-level alcohol prevalence adjustment.

Example: For the auto parts manufacturer, the previous estimate of 300 missed days is multiplied by $137.20 to generate a total of $41,160 lost annually.

Cost of alcohol-related health care use: Applying the average annual per capita alcohol-related health care cost of $150.35 ³⁰ to a workforce of 1,000 adds $150,350 for employees, and $242,064 for families and dependents of employees. This sum represents expenditures for the treatment of illnesses and injuries associated with alcohol use, and for the treatment and prevention of alcohol problems. Since a greater proportion of adults with alcohol problems are employed (73.0 percent vs. 60.0 percent of adults with no alcohol problems) ³¹ the alcohol-related health care costs for businesses may be understated by these figures.

Company-specific estimates of the annual cost of health care services associated with alcohol use disorders are computed by multiplying the number of employees and their family members by the per capita cost of alcohol-related health care use. No industry sector adjustments are made.

Example: For the auto parts manufacturer, the number of employees and family members is multiplied by the average per capita health care cost of $150.35, yielding an estimated cost of $392,414 annually.

Cost of excess hospital days and emergency department visits: The Calculator also includes estimates of the costs of extra hospital days and emergency room visits associated with alcohol use by employees and their families. Cost estimates are computed by multiplying the industry-specific rates of extra hospital and emergency room use by employees with alcohol problems and the general population use rates for employees' families times the average hospital day and ER visit costs. These costs are components of the overall health care costs for the treatment of illnesses and injuries associated with alcohol use, figured above.

Abuse of or Dependence on Illegal Drugs

The NSDUH assesses whether respondents are abusing or dependent on a comprehensive list of illegal drugs, including marijuana, cocaine, heroin, hallucinogens, inhalants, pain relievers, tranquilizers, stimulants, and sedatives. Workers with alcohol disorders are over nine times more likely to meet DSM-IV diagnostic criteria for drug dependence or abuse as workers without alcohol disorders (14.6 percent vs. 1.5 percent respectively). To estimate the number of workers who are likely to have a drug dependence or abuse problem, the Calculator multiplies the expected number of workers with alcohol problems by the difference between the rate of drug dependence or abuse of workers with alcohol disorders and the rate of drug dependence or abuse of workers without alcohol disorders. To estimate the number of family members with a drug dependence or abuse problem and an alcohol problem, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the rates of drug problems among those in the general population who have alcohol problems and those who do not have alcohol problems (18.1 percent vs. 1.7 percent). Ensuring Solutions then summed the excess number of workers who have co-occurring drug and alcohol problems and the excess number of family members who have co-occurring drug and alcohol problems.

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. Workers with alcohol disorders are about two and one-half times more likely to have had serious psychological distress at some point in the previous year (21.3 percent vs. 8.7 percent). To estimate the number of workers who are likely to have had serious psychological distress, the Calculator multiplies the expected number of workers with alcohol problems by the difference between the rate of serious psychological distress among workers with alcohol disorders and the rate of serious psychological distress among workers with no alcohol disorders. To estimate the number of family members with serious psychological distress and an alcohol use disorder, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the general population rates of serious psychological distress of those who have alcohol problems and those who do not have alcohol problems (23.5 percent versus 9.8 percent). Ensuring Solutions then summed the estimated excess number of workers who have psychological distress and the excess number of family members who have psychological distress.

Much of the serious psychological distress found among working people and their families is due to depression. Workers and family members with alcohol use disorders were twice as likely to report a co-occurring major depressive episode in the previous 12 months. Among workers, 10.4 percent of those with an alcohol disorder had a co-occurring depressive disorder, and 5.2 percent of workers with no alcohol use disorder had major depression. The rates were similar among family members: among those with an alcohol use disorder, the prevalence of co-occurring depression was 11.8 percent; among those with no alcohol use disorder, the prevalence was 6.1 percent.

Smoking

The NSDUH assesses whether respondents have been addicted to nicotine within the past month. Workers with alcohol problems are about twice as likely to have nicotine dependency (27.8 percent vs. 14.5 percent). To estimate the number of workers who are likely to have a nicotine dependence (smoking) problem, the Calculator multiples the expected number of workers with alcohol problems (previously calculated by the Calculator) by the difference between the rate of nicotine dependence of workers with alcohol disorders and the rate of nicotine dependence of workers without alcohol disorders. To estimate the number of family members with a co-occurring nicotine and alcohol problem, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the general population heavy smoking rates of those who have alcohol problems and those who do not have alcohol problems (29.2 percent vs. 13.4 percent). Ensuring Solutions then summed the estimated number of workers who have nicotine dependence and the estimated number of family members who have nicotine dependence.

Problems with Law Enforcement

The NSDUH assesses whether respondents have been arrested and booked in the previous year. Workers with alcohol use disorders are 2.7 times more likely to have been arrested and booked in the past year (30.2 percent vs. 11.2 percent). To estimate the number of workers who are likely to have a problem with law enforcement in the previous year, the Calculator multiples the expected number of workers with alcohol problems by the difference between the rate of recent arrests of workers with alcohol disorders and the rate of arrests in the previous year of workers without alcohol disorders. To estimate the number of family members with a recent history of problems with law enforcement, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the general population arrest rates of those who have alcohol problems and those who do not have alcohol problems (34.5 percent vs. 14.7 percent). Ensuring Solutions then summed the estimated number of workers who have previous year arrest records and the estimated number of family members who have previous year arrest records.

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. Workers with alcohol disorders are 5.2 times more likely to have driven under the influence in the past year (71.1 percent vs. 13.7 percent). To estimate the number of workers 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 workers with alcohol problems by the difference between the rate of driving under the influence of alcohol or drugs of workers with alcohol disorders and the rate of DUI of workers without alcohol disorders. To estimate the number of family members with a recent history of driving under the influence of alcohol or drugs, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the DUI rates between those in the general population who have alcohol problems and those who do not have alcohol problems (65.8 percent vs. 10.0 percent). Ensuring Solutions then summed the estimated number of workers who have recently driven under the influence of alcohol or drugs and the estimated number of family members who have recently driven under the influence of alcohol or drugs.

Violence

The NSDUH assesses whether respondents have been violent by attacking someone with the intent to cause serious bodily harm in the previous year. Workers with alcohol abuse or dependence disorders are much more likely also to report that they have attacked someone (5.9 percent) than workers without alcohol disorders (1.1 percent). To estimate the number of workers who are likely to have displayed violent behavior and who also have an alcohol use disorder, the Calculator multiplies the expected number of workers with alcohol problems by the difference between the rates of workers who have reported attacking someone among those with alcohol disorders compared to those without alcohol disorders. To estimate the number of family members who have both an alcohol use disorder and who have displayed violent behavior, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the general population rates of causing violence of those who have alcohol problems and those who do not have alcohol problems (14.4 percent vs. 11.8 percent). Ensuring Solutions then summed the excess number of workers and family members who have alcohol problems as well as exhibit violent behavior.

Prevalence Rates of Social Problems

The following table summarizes the prevalence of the social problems described above based on the type of alcohol disorder Ensuring Solutions used in the Calculator.

Table 6: Incidence Rates of Social Problems
Variable	Worker
	With Alcohol Use Disorder (percent)	No Alcohol Use Disorder (percent)	Difference (percent)
Illicit Drugs	14.6	1.5	13.1
Serious Psychological Distress	21.3	8.7	12.6
Nicotine Dependence	27.8	14.5	13.3
Arrested and Booked	30.2	11.2	19.0
Driven Under the Influence of Alcohol or Other Drugs	71.1	13.7	57.4
Attacked someone with intent to seriously harm	5.9	1.1	4.8
	Family Member
Illicit Drugs	18.1	1.7	16.4
Serious Psychological Distress	23.5	9.8	13.7
Nicotine Dependence	29.2	13.4	15.8
Arrested and Booked	34.5	14.7	19.8
Driven Under the Influence of Alcohol or Other Drugs	65.8	10.0	55.8
Attacked someone with intent to seriously harm	14.4	11.8	2.6

Conclusion

The Alcohol Cost Calculator gives a simple estimate of the financial toll faced by individual businesses, illuminating an area with significant potential for cost reduction and improved productivity. Ensuring Solutions has found that given the high costs imposed by problem drinking, most employers can identify opportunities for health and productivity savings while also improving the health of employees and their families by improving access to treatment for the full spectrum of alcohol-related problems.
Ensuring Solutions Staff, December 2007

Footnotes:

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.
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/
Harwood, H.J. and Reichman, M.B. 2000. The Cost to Employers of Employee Alcohol Abuse: A Review of the Literature in the United States of America. United Nations Office on Drugs and Crime. Bulletin on Narcotics, Vol. LII, Nos. 1 & 2, 2000 Available from the World Wide Web: http://www.unodc.org/unodc/bulletin/bulletin_2000-01-01_1_page005.html. Harwood, H.J., Malhotra, D. et al. 2002. Cost Effectiveness and Cost Benefit Analysis of Substance Abuse Treatment: An Annotated Bibliography. U.S. Department of Health and Human Services. Substance Abuse and Mental Health Services Administration. Center for Substance Abuse Treatment. Harwood, H.J., Malhotra, D. et al. 2002. Cost Effectiveness and Cost Benefit Analysis of Substance Abuse Treatment: A Literature Review. U.S. Department of Health and Human Services. Substance Abuse and Mental Health Services Administration. Center for Substance Abuse Treatment. Holder, H.D. Lennox, R.D. and Blose, J.O. 1992. The Economic Benefits of Alcoholism Treatment: A Summary of Twenty Years of Research. Journal of Employee Assistance Research, 1(1), 63-82.
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 4th Edition for alcohol dependence disorder and alcohol abuse disorder.
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. ICPSR04373-v1. Research Triangle Park, NC. Research Triangle Institute, 2005. Ann Arbor, MI: Inter-university Consortium for Political and Social Research, 2005.
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.
Kessler, R.C. The National Comorbidity Survey of the United States. International Review of Psychiatry. 2006, 6: 365-376.
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.
Substance Abuse and Mental Health Data Archive. Available from the World Wide Web: http://sda.berkeley.edu/
U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. 2007. 2004-2005 State Estimates of Substance Use. http://www.oas.samhsa.gov/2k5State/AppB.htm#TabB.16
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. In the pooled 2004 and 2005 NSDUH surveys, 2,946 respondents employed full- or part-time, or 3.9 percent, met the DSM IV diagnostic criteria for alcohol dependence disorder, and 4,227 respondents, or 5.3 percent, met the DSM IV diagnostic criteria for alcohol abuse disorder.
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.
The NCS diagnoses were based on a modified version of the Composite International Diagnostic Interview (the UM-CIDI). The ll NCS diagnoses use DSM III-R criteria, the predecessor to the DSM-IV, which is used by the NSDUH to diagnose alcohol use disorders. The narrow DSM III-R diagnostic categories used by the NCS produced estimates of alcohol dependence disorder among working adults of 4.5 percent and of alcohol abuse disorder of 2.6 percent. The NCS is a national stratified random sample of 8098 respondents 15 to 54 years of age who were administered a detailed diagnostic interview between 2001 and 2003.
Detailed tables of the prevalence of problem drinking by industry, broken out by age and sex, are available from the author.
July 2007 average hourly earnings of production or non-supervisory employees on private nonfarm payrolls by major industry. Available from the World Wide Web: ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb16.txt

Average Hourly Wage	$17.43
Agriculture	$11.04
Leisure, Hospitality, Arts	$10.34
Education, Health & Social Services	$18.07
Finance & Real Estate	$19.69
Information & Communication	$23.86
Manufacturing	$17.15
Mining & Construction	$21.01
Other Services	$15.17
Professional	$20.32
Public Administration	$22.13
Retail Trade	$12.87
Transportation & Utilities	$19.03
Wholesale	$19.08

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. See author's note on the calculation of updates.
The total estimated U.S. population estimate for 2007 is 295,507,134. http://www.census.gov/population/www/socdemo/hh-fam/cps2006.html.
The estimated average number of dependants for a family in 2007 is 1.61. http://factfinder.census.gov/servlet/ACSSAFFFacts?_sse=on
The average daily hospital charge was updated using 2005 data from HCUPnet. Healthcare Cost and Utilization Project, Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/HCUPnet/. Their figure of $4747.61 was updated to 2007 costs using appropriate health care inflation costs. The updated 2007 figure used in the calculator is $5306.68. The average cost of an ER visit was calculated by updating the average cost of an ER visit in 1998, reported by Tsai et al, (2003). Their figure of $798 was updated to reflect 2007 costs using appropriate health care inflation costs. The updated 2007 figure used in the Calculator is $1191.81 per visit to the ER. Tsai, A.C., Tamayo-Sarver, J.H., Cydulka R.K., Baker, D.W. 2003. Declining Payments for Emergency Department Care, 1996-1998. Annals of Emergency Medicine, 41: 3. 299-308.
χ2 = 112, p < .0001
7.1 percent vs. 3.3 percent for alcohol abuse, 4.8 percent vs. 2.8 percent for alcohol dependence. There was a statistically significant difference in the proportion of males vs. females who had any alcohol problem, χ2 = 570, p < .0001
56.5 percent of workers with an alcohol problem are under 35 years of age. Only 33.1 percent of employees with no alcohol use disorder are under 35 years old (χ2 = 1029.4, p<.0001).
2004-2005 respondents who are employed full-time or part-time in an industry sector, by primary place of employment.
F = 41.4, p < .0001
χ2 = 54.1, p < .01
χ2= 6.12, p=.013. (employees); χ2,= 29.4, p < .0001 (family)
F=4.30, p=.038 (employees)
F = 37.3, p<.0001.
These estimates are likely to err on the low side because fringe benefits, turnover and replacement costs, disability and workers' compensation costs are not included. Since the BLS average wage estimates cover only salaried, nonsupervisory and nonmanagement employees, actual costs to companies of missed days are likely to be higher when the salaries of managers with alcohol problems are included. .
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.
χ2=944, p<.0001