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Addiction Parity: Saves Money, Stops Discrimination, Promotes Personal Responsibility
Donald J. Kurth, M.D.
Californians of every ethnic, social, and economic group are not receiving the health insurance benefits that they thought they had purchased. Health insurance companies have cut benefits for addiction treatment to less than a fourth of what benefits were ten years ago. These short sighted insurance companies are trying to save a few pennies but are actually costing the public treasury billions of dollars each year. They are discriminating against those among us with the disease of addiction and alcoholism. And, they are denying people the right to be responsible for their own healthcare.
Most employers do not realize that chemical dependency coverage has been excluded from their employees' policies. Nationwide, only one third of those who need treatment for addiction receive that treatment. If you are fortunate enough to have health insurance, you probably will not know that these benefits have been excluded from your policy until you or a family member is in need of treatment and that coverage is not available.
James F. Callahan, Executive Vice President of The American Society of Addiction Medicine, points out that 70% of Americans are insured by private health plans. But, few Americans receive chemical dependency benefits for treatment on par with those provided for other diseases because their health plans employ a number of discriminatory practices. These include:
* Annual and lifetime caps that are more restrictive than those imposed on other diseases.
* More stringent limits on days of inpatient care and number of outpatient visits than are imposed on other diseases.
* Higher co-pays and deductibles required for employees and their families who seek treatment for addiction.
* Arbitrary and often undisclosed criteria used by insurers and employers to determine whether treatment services are "medically necessary."
Often, health insurance companies will list addiction and alcoholism treatment as a covered benefit but fail to inform the insured that the coverage is woefully inadequate to pay for even the most minimal treatment currently available. Sometimes, when the family member presents for treatment, he is informed that the insurer or HMO has decided that treatment for addiction or alcoholism is "not medically indicated" and that the individual should simply stop drinking on his own. This is not only medically unsafe but also unrealistic. Certainly, this may be good advice for the "whoopee drinker" or experimenting adolescent, but in the case of the addicted person or alcoholic there is no alternative but medical treatment.
Addiction and alcoholism is a fatal illness. It is a chronic, relapsing-and-remitting disease that profoundly affects thought, emotions, and behavior. The Robert Wood Johnson Foundation documents that addiction is the number one health problem in America today. No other disease costs society more. In the June 2001 issue of The Western Journal of Medicine, Dr. David Breithaupt, a member of the Public Policy Committee of the California Society of Addiction Medicine, points out that as an illness the cost of addiction to the health care system can be staggering, but not as a result of treatment. The real cost results from failure to treat. Every year our society spends billions of dollars on the treatment of drug and alcohol related hypertension, liver and pancreatic disorders, industrial and recreational injury, sleep disorders, and family dysfunction and abuse. University medical centers see huge numbers of preventable disorders such as hepatitis C, fetal alcohol syndrome, traumatic spinal cord and brain injuries, and end stage psychiatric syndromes. Columbia University has estimated that in 1999 in the United States, medical expenditures resulting from failure to treat the underlying addiction at its source cost 300 billion dollars.
The Physician Leadership on National Drug Policy (PLNDP) at Brown University recently reported that untreated addiction costs the nation six times more than heart disease, six times more than diabetes, and four times more than cancer. This is a non-partisan issue and warrants the support of Democrats and Republicans alike. A recent Congressional hearing in Washington, D.C., convened by Senator Orin Hatch (R-UT), resolved unanimously to make addiction treatment one of the primary focuses of U.S. drug policy. On Capital Hill, The Fairness in Treatment: Drug and Alcohol Recovery Act of 2001 (S. 595/H.R. 1194) is attempting to address these issues against stiff opposition from the big insurance companies and HMOs.
Treatment of addictive disease is not free, but denial of coverage for addiction treatment makes little financial sense. The California Alcohol and Drug Treatment Assessment (CALDATA) study found that treatment of 150,000 substance users cost $209 million. However, savings during treatment, and in only the first year following treatment, amounted to $1.5 billion. That means seven dollars are saved for every dollar spent on addiction treatment.
Not all HMOs oppose addiction treatment. Dr. Gary Jaeger, incoming President of the California Society of Addiction Medicine, points out that Kaiser, California's largest HMO, provides essentially unlimited treatment for addiction and alcoholism. Why would Kaiser do such a thing? The answer is simple: because it saves Kaiser money. Kaiser has found that by 18 months following addiction treatment, the medical costs of that treatment have been almost totally recouped in cost savings for that population of patients. In fact, the Rand Corporation found that providing unlimited substance abuse benefits in employer sponsored health plans costs employers only $5.11 per member per year. That is only 43 cents per month for unlimited addiction coverage. The Rand study concluded, "Limiting substance abuse benefits saves very little in managed behavioral health care plans, but affects a substantial number of patients who need additional care."
Where do Californians stand on these issues? Clearly, the voters of California recognize the need for treatment of addictive disease. Just last November, the voters approved Proposition 36 by a confident 61% majority. Beginning July 1, 2001, offenders with addictions will be diverted from the correctional system into community based addiction treatment programs. This dramatic shift in public policy reflects a dynamic change in public opinion. The voters of California realize that treating a disease as a crime does not help to cure the disease. We must apply the same principles that have been successful with other diseases to the disease of addiction. Only then will we begin to make progress in eradicating that disease.
So why isn't treatment for addictive disease available? Actually, it is. If you are wealthy and can afford to pay cash for your medical care, treatment will always be available. Also, if you are arrested for a drug charge in California, under Proposition 36, treatment will be available. Judge Manley of California's Drug Court recently testified in favor of addiction parity before the California Senate. He suggested that Californians have found themselves in an unusual situation. If you are arrested for a drug charge, treatment will be provided. However, if you are a working-class person, going to work each day, trying to pay your bills and being responsible for your own health care problems, you probably have little or no coverage for you or your family to help pay for addiction or alcohol problems. Not only is this is a crisis in health care coverage; this is a crisis in personal responsibility that must be addressed.
The California legislature is addressing this issue as you read this article. California State Senator Wes Chesbro has introduced S.B. 599, a comprehensive drug treatment parity bill. The California Senate recently passed S.B. 599 by a sound majority and the bill has gone on to the State Assembly for approval. S.B. 599 requires health insurers to stop discrimination against Californians suffering from the disease of addiction. Passage of this bill would signal a legislative acknowledgement of a public health approach to addiction. Addiction Parity Bill S.B. 599 will reduce the number of people using addictive drugs as well as the prevalence of other illnesses related to drug abuse.
Big profit insurance and shortsighted HMOs have taken a stand against this bill and are spending big money to lobby your Assembly Member to vote against S.B. 599. Fortunately, many groups are in support. Among many others, support has come from the California Medical Association, The California Society of Addiction Medicine, and the California Society of Public Health Officers. Even former Director of the Office National Drug Control Policy, Executive Office of the President, Barry MacCaffrey, has come out in support of greater insurance benefits for drug and alcohol treatment. When asked, "What is the one big thing you have not done?" MacCaffrey's response was clear. "I'd say, 'Get access to insurance for drug abuse and mental health&emdash;it's a no-brainer.'"
We all stand to benefit if our California Assembly Members listen to these words and protect Californians' access to addiction treatment. We stand now at the turning point of public policy. The eyes of the nation are upon us. We can stop discrimination against those among us suffering from the disease of addiction and alcoholism. We can help California employers provide their workers with the best medical coverage available. We can establish fiscally responsible policy and help Californians to be responsible for their own medical care. Big insurance has already visited your legislator to let him know how he can best look out for their financial interests. Now, it is your turn call or write your State Assembly Member today to let him or her know how you feel. Support passage of the Addiction Parity Bill S.B. 599.
Donald J. Kurth, M.D. is the Chairperson of the Public Policy Committee of the California Society of Addiction Medicine and a Fellow of the American Society