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THE COST OF SUBSTANCE ABUSE TO AMERICA'S HEALTH CARE SYSTEM 

 Report 1: Medicaid Hospital Costs 

 July 1993 



I. INTRODUCTION 



Health care reforin has emerged as a major issue on our nation's domestic agenda. But, as the 

 history of health system reform efforts has repeatedly demonstrated, providing quality care to 

 aU Americans at reasonabfe cost is no mean task. It requires an examination of all the factors 

 that contribute to health care inflation, including administrative costs and inefficiency, 

 inappropriate and excessive use of services, malpractice and defensive medicine, emerging 

 technologies, and excess capacity. Eliminating unnecessary Cesarean sections may save $1 

 billion, eliminating unnecessary bypass surgeries may save a little more, reducing excess 

 capacity might save several billion, but, in the hierarchy of cost containment opportunities, 

 another cost of far greater magnitude ranks high on the list: tiiat of reducing substance abuse 

 and addiction in all its forms—including tobacco, alcohol and drugs. 



CASA -- The Center on Addiction and Substance Abuse at Columbia University - is conducting 

 the first national, comprehensive study of the costs of all substance abuse - legal and illegal 

 drugs, alcohol, and tobacco - to the nation's health care system. The first phase of this study, 

 funded by the Henry J. Kaiser Family Foundation, focuses on the inpatient hospital costs of the 

 Medicaid program. Subsequent reports will assess the costs of substance abuse to the rest of 

 Medicaid (e.g., outpatient hospital costs, emergency room services, payments to physicians), 

 Medicare, other public programs. Blue Cross/Blue Shield, commercial insurers, institutions and 

 individuals. 



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