Institute for Health and Aging

Alcohol abuse is known to cause illness, disability, and premature death. It is also a contributing factor in many instances to criminal activity, motor vehicle crashes, and other injuries. Substantial costs resulting from alcohol abuse are incurred in the United States and in California, including the cost of providing medical care for people with alcohol-related illness, treatment and prevention costs, costs to the law enforcement system, costs resulting from alcohol-related motor vehicle crashes and other injuries, and the indirect costs associated with disability, diminished capacity, and premature death from alcohol-related causes.

The purpose of this briefing paper is to review the research that has been done in this area, and to present preliminary estimates of the costs of alcohol abuse in California and its impact on the state. These estimates are based on research that has been conducted by experts at the national level over the years coupled with some specific analyses conducted for California. We also suggest how one could conduct a thorough study to develop more detailed and refined estimates for the state.

THE COST OF ALCOHOL ABUSE IN CALIFORNIA: HIGHLIGHTS

1) The cost of alcohol abuse in California in 2001 totaled $17.8 billion for health service, substance abuse treatment/prevention, lost productivity from premature deaths, and justice system costs (See Appendix Table 11).

2) Nearly 84,000 hospital discharges resulted from alcohol abuse, including 11,388 discharges with alcohol dependence syndrome, 9,314 with alcoholic psychoses, and 8,115 with cirrhosis of the liver. Almost 16,000 Californians were hospitalized for injuries that resulted from alcohol use (Table 3 and page 3).

3) Hospitalization costs amounted to $1.3 billion (Table 6). The mean length of hospitalization in non-federal hospitals was 6.5 days and the mean cost per hospitalization was over $12,000 (Table 5 and page 3).

4) Public programs paid for 64% of hospitalization costs, including 38% paid by Medicare, and 19% paid by MediCal (Table 5 and page 4).

5) Costs of other medical services, including outpatient care, nursing homes, pharmaceuticals, and other health professionals, totaled $1.11 billion (Table 6 and page 4).

6) Health insurance administration costs in California attributed to alcohol abuse amounted to $122 million for 2001 (Table 6 and page 5).

7) More than 13,000 Californians died as a result of alcohol abuse, including 3,600 who died of primary alcohol-caused diagnoses, over 5,100 who died of an alcohol –related diagnosis, and 4,400 who died of an injury attributed to alcohol. These deaths represented lost productivity of nearly $8 billion and over 358,000 life years (Tables 7,8 and page 6).

8) Criminal justice system costs attributed to alcohol were as high as $6.7 billion including $2.1 billion for police protection, $2.1 billion for judicial and legal services, and $2.4 billion for corrections (Table 9 and page 6).

9) In California’s justice system, 25% of total police arrests are for alcohol-specific offenses; approximately 43% of total arrests have been observed to be alcohol-involved (Table 10 and page 6). An estimated 36 percent of state prison and jail inmates were under the influence of alcohol at the time of their convicted offense (Table 9 and page 7).

10) The alcoholic beverage industry paid excise taxes, license fees, and fines totaling $350 million in 2001. In addition to $41 million in license fees and fines, this included $130 million excise taxes on beer sales, $19 million on wine sales, and $138 million on the sale of spirits (Page 8).

11)Seen as an additional cost for the price of a drink, health care and justice system costs add 18 cents not paid by the drinker. Offsetting beverage industry payments (through excise taxes, license fees, and fines) are less than one cent (Page 13).