239 



RESULTS 



The High Cost of Substance Abuse 



In 1991*, there were 2.2 million tobacco, alcohol, or drug-related Medicare 

 admissions which accounted for 20% of all Medicare hospitalizations. Because these substance 

 abuse-related cases tend to be more expensive to treat than the average hospital case, the 

 amount actually paid out by Medicare for substance abuse-related care was even higher, 

 accounting for 23% or nearly one-fourth of the total Medicare payments for hospital care.*" 

 Substance abuse-related cases cost more to treat because they required almost 26% more 

 hospital staff and other resources than Medicare discharges that are unrelated to substance 

 abuse. We estimated that Medicare discharges for conditions where substance abuse was a 

 major risk factor had a Case Mix Index (CMI - a measure of resource use) of about 1.51, 

 compared to a CMI of 1.21 for diagnoses not related to substance abuse. 



As displayed in Graph 1, in dollars. Medicare spent over $13 billion of its $57 

 billion inpatient short-stay hospital expenditures on substance abuse-related care. These 

 amounts exceed the 1 out of 5 dollars spent in the Medicaid program for substance-abuse 

 related conditions. i 



Based upon these results, it is estimated that, for 1994, substance abuse-related 

 Medicare hospital costs will rise to $20 billion. These costs include substance abuse-related 

 care for both elderly and disabled Medicare recipients, with the disabled comprising 12% of 

 these costs. 



* 1991 is the most recent year that National Hospital Discharge Survey data is available. 

 ""See Methods section for discussion of how payments were calculated. 



