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As can be seen in Table 1 , the largest share of Medicare inpatient substance abuse 

 costs— $12.5 billion or 97% of the total— was for medical treatment of illnesses and conditions 

 attributable to the abuse of alcohol, drugs and tobacco. These are conditioits that do not 

 mention substance abuse in the diagnosis, but are ones that have been repeatedly shown in 

 epidemiologic research to be associated with the use of at least one of these substances. 



In contrast, treatment for conditions that explicitly mention alcohol or drug abuse 

 accoimt for only 4% of all substance abuse-related discharges, consuming 3% of those costs. 

 This low percentage of alcohol and drug diagnoses is misleading, and is probably more 

 reflective of a reluctance by physicians to classify the elderly population as alcohol or drug 

 dependent, than an indication of a low prevalence of alcohol or drug use among the elderly and 

 disabled. Underreporting of substance abuse as either a primary or secondary condition for this 

 population is clearly a problem as depicted in Graph 2. While 5% of all Medicare beneficiaries 

 are considered heavy drinkers and 3% report using drugs (see Table 2), only 3% of Medicare 

 patients in the hospital had a diagnosis that mentioned either alcohol or drug use or both. 

 Since alcohol and drug users tend to be at greater risk for medical care, we would expect them 

 to make up a larger, not smaller, proportion of the hospitalized population. In fact, separate 

 studies measuring alcoholism alone among the hospitalized elderly indicate that 9-20% actually 

 have a drinking problem." This wide range in estimates of alcohol problems suggest that 

 identification of alcoholism varies considerably across physicians. Thus, relying solely on 

 diagnoses that explicitly mention alcohol or drugs on the medical record in order to measure 

 the prevalence and cost of drugs and/or alcohol problems in hospitals grossly underestimates 

 the full impact of substance abuse on Medicare costs. 



