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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: nearly 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, released for public use in April 2003 and updated in March 2005, estimates the business impact of the continuum of alcohol problems — categorized here as alcohol dependence, or alcoholism, and alcohol abuse4 — on 11 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
  • extent of alcohol-related hospital and emergency room visits of employees and their families
  • 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 Health (NSDUH) 2002 (prior to the 2002 survey, it 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 2002 NSDUH data. All respondents in the 2002 survey who were 18 years of age and older and who were employed full- or part-time, 25,160 adults, are included in analyses. Ensuring Solutions excluded 28,919 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 8,098 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 4,118 NCS respondents older than 18 who were employed full- or part-time at the point of the interview are included in the Calculator analyses.

Ensuring Solutions used the Survey Documentation and Analysis (SDA, version 1.2) computer programs as the primary software to analyze the NSDUH and the NCS data.8 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. Some analyses were also conducted using the Statistical Package for the Social Sciences (SPSS) and the Statistical Analysis System (SAS).

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 2002 from the NSDUH for the general population 18-25 years old, and 26 years and older.9 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 NSDUH survey population 18 and older that each category represented (14.7 percent and 85.3 percent respectively). An adjustment rate was then calculated to reflect the higher national alcohol use disorder prevalence among workers when compared to the overall population (9.1 percent for workers over 18 years of age vs. 7.7 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 (9.1 percent) by the prevalence of alcohol dependence or abuse for people aged 18 and older (7.7 percent), yielding an adjuster of 1.15. 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.

Prevalence of Alcohol Dependence and Alcohol Abuse

The NSDUH is constructed so that alcohol (and other drug) diagnoses can be derived from survey questions.10 Among employed adults, 3.9 percent have alcohol dependence disorder, and 5.2 percent met diagnostic criteria for an alcohol abuse disorder. A total of 9.1 percent of working adults have an alcohol use disorder. 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,11 and the 7.1 percent prevalence of alcohol dependence and/or alcohol abuse among working adults from the NCS.12

Ensuring Solutions calculated the prevalence of alcohol problems in the workforces of 11 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 2002 NSDUH sample range from 679 in agriculture to 6,389 in the professional sector.13 No industry sector analyses are computed with the NCS data due to its substantially smaller sample size.

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.

Cost of Absenteeism Estimates

The costs to businesses of missed workdays are derived from the Bureau of Labor Statistics (BLS) Current Employment Statistics. The most current average daily wages for salaried, nonsupervisory employees by industry as of July 2004 were extracted from BLS Current Employment Statistics. The cost of extra work days missed by employees with alcohol problems in each of the 11 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.14

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 1998 estimates of the economic costs of alcohol problems in the United States.15 In order to update these figures to reflect more current costs, these figures were adjusted to 2003 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:

Yearly Direct Health Care Costs
Treatment Yearly Cost
treatment of alcoholism and alcohol abuse: $6.6 billion
prevention and early intervention: $1.7 billion
treatment of medical consequences of alcohol consumption: $21.9 billion
medical consequences of fetal alcohol syndrome: $4.0 billion
insurance administration due to medical consequences: $1.3 billion
insurance administration due to alcohol problem treatment: $0.3 billion
Total: $35.8 billion

The total health care costs in 2003 are divided by the 2000 U.S. Census total U.S. population16 estimate to yield a per capita cost of $123.10. 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 2.59, the average household size in the United States according to the 2000 U.S. census.

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.17

Results

Prevalence of Alcohol Problems by Industry Sector

Based on the analysis of the 2002 National Survey on Drug Use and Health (NSDUH), most people with alcohol problems work, and the majority are full-time employees. Among adults who currently have the disease of alcoholism, 68 percent work (56 percent work full-time and 12 percent work part-time). An even higher workforce participation rate is found among adults who currently have alcohol abuse disorders: 75 percent are employed (62 percent worked full-time and 13 percent worked part-time). By contrast, only 61 percent of people with no alcohol problems are employed (49 percent full-time, 12 percent part-time).These differences are highly significant.18

One employee in twenty-six (3.9 percent) has alcoholism and one in nineteen (5.2 percent) has an alcohol abuse disorder. Male employees are over twice as likely to have an alcohol problem as female employees.19 Employees with alcohol problems tend to be younger, on average than the general workforce population.20

Rates of alcohol problems vary greatly from industry to industry. Alcohol dependence rates are highest for males in hospitality/leisure (7.0 percent), retail (6.3 percent) and construction (6.2 percent), and lowest among females in wholesale (0.5 percent), construction (0.9 percent), and transportation and utilities (2.3 percent). Similar differences between male and female employees hold for other alcohol problems: alcohol abuse is concentrated among males in wholesale (9.6 percent), hospitality/leisure (9.2 percent), retail (9.0 percent), and construction (8.0 percent), and lowest among women in agriculture (1.0 percent) and government (1.7 percent).

Table 2: Prevalence (in percent) of Alcohol Problems by Industry Sector
Industry Sector Number of
Respondents21
Alcohol
Dependence22
Alcohol
Abuse23
Male Female All Male Female All
Agriculture 679 5.1 3.9 4.8 7.2 1.0 5.8
Construction & Mining 2,275 6.2 0.9 5.9 8.0 3.5 7.6
Manufacturing 3,075 4.3 3.0 3.9 6.2 2.4 5.1
Transportation & Utilities 1,453 3.6 2.3 3.3 7.8 2.1 6.3
Wholesale 832 5.3 0.5 3.9 9.6 2.9 7.6
Retail 5,901 6.3 3.8 5.0 9.0 4.0 6.4
Finance, Real Estate 1,553 5.8 2.5 3.9 6.6 4.3 5.3
Business/Repair Services 1,927 4.3 2.8 3.9 7.8 4.2 6.7
Professional 6,389 2.7 2.5 2.6 3.6 2.5 2.8
Government 1,160 2.7 3.3 2.9 6.0 1.7 4.0
Leisure/Hospitality Services 1,528 7.0 3.9 5.1 9.2 3.6 5.8
Total 26,772 4.8 2.8 3.9 7.1 3.0 5.2

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.

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 1.59 (the average number of dependents in 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.

Workplace Absenteeism

Employees with alcohol problems miss substantially more work days each year than other employees. Alcohol dependent employees missed 12.2 work days annually. Employees who abused alcohol missed 10.3 days and employees with no alcohol use disorder missed 8.5 days.24 This pattern generally holds across the 11 industry sectors, but there are some divergences.

Table 3: Workdays Missed Annually Per Employee
Industry Sector Alcohol Dependence Alcohol Abuse No Alcohol Use Disorder
Agriculture 19.6 14.4 7.1
Construction & Mining 11.0 13.2 10.4
Manufacturing 13.2 10.8 6.4
Transportation & Utilities 12.7 9.8 7.6
Wholesale 16.0 23.8 7.6
Retail 10.7 7.0 8.4
Finance, Real Estate 12.8 7.7 9.6
Business/Repair Services 17.5 8.4 9.0
Professional 8.5 9.6 9.1
Government 14.0 10.3 9.5
Leisure/Hospitality 10.2 9.5 8.8
Total 12.2 10.3 8.5

Company-specific estimates of the number of extra work days missed are computed by subtracting the average number of workdays missed by employees in each industry sector who have no alcohol problems from the number missed by employees in the same sector with alcohol dependence and with alcohol abuse, and multiplying the result by the estimated number of employees in the company with alcohol problems.

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.25

Health Care Utilization

Hospital use: Employees who have alcoholism are approximately twice as likely to report an overnight stay in a hospital as people with less severe alcohol problems and are approximately 20 percent more likely than those with no alcohol disorder.26 If hospitalized, alcohol dependent employees stayed 2.0 days longer than employees with no alcohol use disorder, and employees with an alcohol abuse disorder stayed 0.12 days longer than employees with no alcohol problems.27

Company-specific estimates of the number of excess hospital nights are computed by multiplying the percentage of persons in each of the three diagnostic groups 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 and alcohol abuse. 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.

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 (0.65 ER visits per alcohol dependent employee, 0.51 visits per alcohol abusing employee, and 0.43 visits per employee with no alcohol problems).28 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 (66 percent) and 73 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.29

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.

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 11 sectors. Costs are based on the prevalence of alcohol problems in each sector and the sector-specific rates 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.30

Table 4: Cost of Work Days Missed Annually (per 1,000 employees)

Industry Sector

Cost of Missed Work Days31

Agriculture $85,195
Construction & Mining $37,974
Manufacturing $63,269
Transportation, Utilities $48,888
Wholesale $220,862
Retail $2,424
Finance, Real Estate, Insurance $3,370
Business/Repair Services $32,517
Professional $867
Government $26,797
Leisure/Hospitality $7,956
Average $29,798

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 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.

Cost of alcohol-related health care use: Applying the average annual per capita alcohol-related health care cost of $123.1032 to a workforce of 1,000 adds $123,350 for employees, and $196,127 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 (71.9 percent vs. 60.3 percent of adults with no alcohol problems)33 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.

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 about seven and one-half times more likely to meet DSM-IV diagnostic criteria for drug dependence or abuse as workers without alcohol disorders (13.6 percent vs. 1.8 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 (17.7 percent vs. 1.8 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 Mental Illness

The NSDUH assesses whether respondents meet DSM-IV diagnostic criteria for a range of serious mental illnesses such as depression, bipolar disease or schizophrenia in the last year. Workers with alcohol disorders are about two and one-half times more likely to meet diagnostic criteria for a serious mental illness at some point in the previous year (16.8 percent vs. 6.8 percent). To estimate the number of workers who are likely to have serious mental illnesses, the Calculator multiplies the expected number of workers with alcohol problems by the difference between the rate of serious mental illness among workers with alcohol disorders and the rate of serious mental illness among workers with no alcohol disorders. To estimate the number of family members with a serious mental illness 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 mental illness of those who have alcohol problems and those who do not have alcohol problems (19.1 percent versus 7.4 percent). Ensuring Solutions then summed the estimated excess number of workers who have a mental illness problem and the excess number of family members who have a mental illness.

Much of the serious mental illness found among working people and their families is depression. Workers and family members with alcohol use disorders were about twice as likely to report a co-occurring major depressive episode in the previous 12 months. Among workers, 15.2 percent of those with an alcohol disorder had a co-occurring depressive disorder, and 6.5 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 11.9 percent; among those with no alcohol use disorder, the prevalence was 6.3 percent.

Smoking

The NSDUH assesses whether respondents have been addicted to nicotine within the last year. Workers with alcohol problems are about twice as likely to have nicotine dependency (22.6 percent vs. 10.5 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 (23.9 percent vs. 9.4 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 six times more likely to have been arrested and booked in the past year (11.4 percent vs. 1.9 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 (13.9 percent vs. 2.0 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 4.6 times more likely to have driven under the influence in the past year (71.2 percent vs. 15.4 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 (66.3 percent vs. 11.3 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.

Caused Domestic Violence

The NSDUH assesses whether respondents have been the cause of domestic violence by hitting one’s spouse or partner in the previous year. Workers with alcohol abuse or dependence disorders are much more likely also to report that they have caused domestic violence (5.5 percent) than workers without alcohol disorders (2.0 percent). To estimate the number of workers who are likely to have been the cause of domestic violence and who also have an alcohol use disorder, the Calculator multiplies the expected number of workers with alcohol problems by the difference between the rate of workers causing domestic violence with alcohol disorders and the percentage of workers without alcohol disorders who reported that they had abused their partner, family member or spouse. To estimate the number of family members who have both an alcohol use disorder and perpetrated domestic violence, the Calculator multiplies the expected number of family members with alcohol problems by the difference in the general population rates of causing domestic violence of those who have alcohol problems and those who do not have alcohol problems (4.8 percent vs. 1.6 percent). Ensuring Solutions then summed the excess number of workers who have both alcohol problems and domestic abuse and the excess number of domestically violent, alcohol abusing family members.

Victim of Domestic Violence

The NSDUH assesses whether respondents have been the victim of domestic violence by being hit or threatened by one's spouse or partner in the previous year. Workers with alcohol abuse or dependence disorders are much more likely to also report that they have been a victim of domestic violence (6.0 percent) than workers without alcohol disorders (2.5 percent). To estimate the excess number of workers who are likely to have been victims of domestic violence, the Calculator multiplies the expected number of workers with alcohol problems by the difference between the rate of domestic victimization of workers with alcohol disorders and the rate of victimization among workers without alcohol disorders. To estimate the number of family members causing a domestic violence problem, the Calculator multiplies the expected number of family members with alcohol problems by the difference between the rates of those in the general population with alcohol problems who have caused domestic violence and those who do not have alcohol problems (5.4 percent vs. 2.0 percent). Ensuring Solutions then summed the excess number of workers who have alcohol problems and who have been victimized by domestic abuse and the excess number of family members who have alcohol problems and have been victimized by domestic abuse.

Incidence Rates of Social Problems

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

Table 5: Incidence Rates of Social Problems
Variable Workers with Alcohol Problems
(percentage)
Workers with No Alcohol Disorder
(percentage)
Difference
(percentage)
Illicit Drugs 13.6 1.8 11.8
Serious Mental Illness 16.8 6.8 10.0
Nicotine Dependence 22.6 10.5 12.1
Arrested and Booked 11.4 1.9 9.5
Driven Under the Influence of Alcohol or Other Drugs 71.2 15.4 55.8
Caused Domestic Violence 5.5 2 3.5
Victim of Domestic Violence 6.0 2.5 3.5
Variable Family members with Alcohol Use Disorders
(percentage)
Family members with No Alcohol Disorder
(percentage)
Difference
(percentage)
Illicit Drugs 17.7 1.8 15.9
Serious Mental Illness 19.1 7.4 11.7
Nicotine Dependence 23.9 9.4 14.5
Arrested and Booked 13.9 2.0 11.9
Driven Under the Influence of Alcohol or Other Drugs 66.3 11.3 55.0
Caused Domestic Violence 4.8 1.6 3.2
Victim of Domestic Violence 5.4 2.0 3.4

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.

Carl Summers and Eric Goplerud
March 2005

Footnotes:

  1. U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. 2004. National Survey on Drug Use and Health, 2002. Research Triangle Park, NC: Research Triangle Institute.
  2. 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/
  3. 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.
  4. 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 Diagnostic and Statistical Manual (4th Ed.) for alcohol dependence disorder and alcohol abuse disorder.
  5. U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. 2004. National Household Survey on Drug Abuse, 2002. Research Triangle Park, NC: Research Triangle Institute.
  6. Kessler, R.C. 2000. National Comorbidity Survey, 1990-1992 (Computer file). Conducted by University of Michigan, Survey Research Center. ICPSR ed. Ann Arbor, MI: Inter-University Consortium for Political and Social Research.
  7. Kessler, R.C. 2000. The National Comorbidity Survey of the United States. International Review of Psychiatry. 6 (1994): 365-376.
  8. Substance Abuse and Mental Health Data Archive. Available from the World Wide Web: http://sda.berkeley.edu:7502/
  9. U.S. Dept. of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. 2004. 2002 State Estimates of Substance Use. http://www.drugabusestatistics.samhsa.gov/2k2State/html/appA.htm#taba.14
  10. The 2002 NSDUH include 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/03903-0001/CODEBOOK/3903.htm. In the 2002 NSDUH survey, 956 respondents, or 3.8 percent, met the DSM IV diagnostic criteria for alcohol dependence disorder, and 1333 respondents, or 5.3 percent, met the DSM IV diagnostic criteria for alcohol abuse disorder.
  11. 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.
  12. The NCS diagnoses were based on a modified version of the Composite International Diagnostic Interview (the UM-CIDI). All 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 8,098 respondents 15 to 54 years of age who were administered a detailed diagnostic interview between 1990 and 1992.
  13. Detailed tables of the prevalence of problem drinking by industry, broken out by age and sex, are available from the author.
  14. June 2004 average hourly earnings of production or non-supervisory employees on private nonfarm payrolls by major industry. Available from the World Wide Web: http://data.bls.gov/cgi-bin/surveymost?ce
    Average hourly wage: $15.65
    Manufacturing $16.14
    Transportation, utilities $14.69
    Wholesale $17.72
    Retail $12.12
    Finance $17.55
    Construction, mining $19.14
    Average hourly wage from Bureau of Labor Statistics Occupational Employment Report May, 2003. Available from the World Wide Web: http://www.bls.gov/oes/home.htm
    Agriculture $10.41
    Professional $27.08
    Government $20.55
    Leisure and Hospitality $8.88
    Business and Repair Services $13.92
  15. 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.
  16. The total U.S. population according in 2000 according to the U.S. Census is 281,421,906. http://quickfacts.census.gov/qfd/states/00000.html. The total U.S. population estimate for 2003 is 290,809,777.
  17. The average daily hospital charge of $3752.87 was determined using 2002 data (the latest year for which data was available) from HCUPnet. Healthcare Cost and Utilization Project, Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/HCUPnet/. 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 2003 costs using appropriate health care inflation costs. The updated 2003 figure used in the Calculator is $985.87 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.
  18. χ2 = 175.2, p < .001
  19. 7.1 percent vs. 3.0 percent for alcohol abuse, 4.8 percent vs. 2.8 percent for alcohol dependence. There was a statistically significant difference in the number of males vs. females who had any alcohol problem, χ2 = 288, p < .0001
  20. Fifty-seven percent of workers with an alcohol problem are under 35 years of age. Only 33.7 percent of employees with no alcohol use disorder are under 35 years old (χ2 = 494, p<.01).
  21. 2002 respondents who are employed full-time or part-time in an industry sector, by primary place of employment.
  22. Percent meeting DSM-IV criteria for alcohol dependence disorder in the previous 12 months.
  23. Percent meeting DMS-IV criteria for alcohol abuse disorder in previous 12 months.
  24. F = 20.4, p < .001
  25. χ2 = 54.1, p < .01
  26. 8.5 percent, 4.2 percent and 7.3 percent respectively, F =12.29, p=.00.
  27. 5.7 days, 3.7 days and 3.6 days respectively, F=15.3, p=.000.
  28. F = 34.9, p<.001.
  29. F = 2658, p<.001.
  30. 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.
  31. The cost of missed work days is computed by multiplying each industry sector’s prevalence of alcohol dependence and alcohol abuse by the excess number of missed days for people with alcohol dependence and alcohol abuse disorders for that sector, and then multiplying that result by the Bureau of Labor Statistic’s estimate of the average daily wage for non-supervisory employees in that sector.
  32. 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 $35.8 billion was divided by the 2003 estimate of 290,809,777 for an estimate of $123.10 per capita spending.
  33. χ2=130.6, p<.01