Private Insurance Paying Less for Substance Abuse Treatment

A recent study confirms something we already knew:

On average, private insurance payments for substance abuse treatment fell 1.6 percent each year. In 1986, private insurance paid $2.8 billion for drug and alcohol treatment; by 2003, it funded $2.1 billion in treatment – a 24 percent decline. The share of total substance abuse treatment costs paid by private insurance declined from 30 percent to 10 percent.

I was surprised by the out-of-pocket spending drop. I would have expected out-of-pocket to be a small, but growing share of spending to compensate for reductions in private insurance spending.

The shift from private insurance to public funding is troubling for a lot of reasons. Anecdotally, treatment seekers in the public system often fall into one of the following categories:

  • People who have never had much recovery capital.
  • People who once had private insurance and were unable to get help. They’ve lost private insurance (Usually attached to their job.) and are now seeking help with a much more advanced AOD problem and less recovery capital.

Their experience will be characterized by the following pattern:

  • They will require higher intensity treatment, in a larger dose for a longer time.
  • They probably won’t receive the treatment they need.
  • They will relapse in large numbers.
  • Many of them will seek help again.
  • They still will not get the treatment they need.
  • They will relapse in large numbers.
  • They will require more expensive care, like medical detox and hospital admissions for AOD related problems.

Community responses will be characterized be the following pattern:

  • Professional helpers and the public observe this cycle and conclude that these people can’t be helped, or that they don’t want to be helped.
  • Professional helpers and the public conclude that treatment is a waste of money.
  • Efforts to facilitate drug-free recovery are characterized as Quixotic and moralistic. There are calls for more pragmatic solutions.
  • Societal responses to addiction will shift from facilitating recovery to mitigating the societal damage, primarily crime and disease.

What did I miss?