Study: Opioid crisis costs Indiana $11 million daily

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For the Daily Reporter

The economic impact to Indiana from opioid misuse is more than $4 billion annually, or about $11 million a day, according to a study published by a Columbus professor and an Indiana University student.

In Hancock County, the total cost over the 15-year study period — from 2003 to 2017 — was $500 million, the study said. Last year, the local cost was $53.9 million alone, they said.

Ryan Brewer, associate professor of finance at Indiana University-Purdue University Columbus, and Kayla Freeman, a doctoral candidate in finance at the IU Kelley School of Business in Bloomington, studied the impact of the opioid crisis on state and local economies, the labor market and health care. Their study also includes recommendations for actions by state officials.

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Their findings were released Monday in a special issue of the Indiana Business Review, published by the Indiana Business Research Center.

Huge damage to state

Opioid addiction affects a user’s ability to find employment and be part of the labor force, the result of which is a reduced gross state product, the researches said. They found that lost gross state product has increased from $0 in 2003 to $1.72 billion in 2016 — the latter figure almost double the $926 million lost in 2015. Brewer and Freeman also said that potential wages lost due to opioid misuse totaled $752 million in 2016.

“While it is true the entire nation has been mired in the crisis, only a handful of states — including Indiana — have been struggling with the epidemic while also facing an increasingly tight labor market, which challenges our hopes of realizing strong post-recessionary growth in an economy where labor is increasingly difficult to find,” Brewer said in an IU news release.

Among the researchers’ findings regarding Indiana:

More than 12,300 Indiana residents are estimated to have died from 2003 to 2017 due to opioid overdoses

More than $40 million is spent annually statewide for rehabilitation costs

The cost of drug arrests and court costs exceeds $13 million annually, and costs of incarceration have reached more than $70 million each year

Total marginal costs for neonatal abstinence syndrome — when infants experience withdrawal symptoms after losing access to their mother’s drugs after birth — totaled more than $36 million in 2016

An estimated 5,243 Hoosier children were in foster care due to parental opioid misuse, as of 2016

“Indications from national and local sources suggest communities across the country and within Indiana continue to experience worsening conditions and increasing numbers of misuse cases,” Brewer and Freeman wrote in the study.

County economic impact

Counties have incurred hundreds of millions of dollars — and in some cases more than $1 billion — in damages because of the impact of opioid addiction.

Brewer and Freeman looked at direct costs (first response, hospitalization, treatment, foster care, court costs), indirect costs (lost gross state product in tight labor markets) and the present value of all lost future productivity of past opioid-related casualties for each year from 2003 through 2017.

Here’s what they found for some area counties, by most recent year and over the 15-year study period.

Bartholomew: $33,946,983 impact in 2017, and $239.8 million total

Brown: $6,205,108 impact in 2017, and $54.8 million total

Hancock: $53,903,592 impact in 2017, and $500 million total

Jackson: $28,125,627 impact in 2017, and $242.7 million total

Jennings: $22,572,522 impact in 2017, and $232.7 million total

Johnson: $72,706,320 impact in 2017, and $607.9 million total

Amy Ikerd, a prevention specialist with the county’s probation department, who created the local Heroin Protocol — an intense-monitoring probation program that aims get users treatment while they serve time after committing crimes — was intrigued by the statistics Brewer and Freeman found; but wondered if the impact is actually much larger.

Not all collateral costs can be measured, she explained.

“We’re dealing with addiction like we never have before,” she said.

Hancock County has worked hard to stay on top of the issues opioid addiction has created locally, while making the least economic impact on taxpayers, Ikerd said. For example, those in the Heroin Protocol are required to pay their own way through treatment, rather than relying on money from the county coffers.

Hopefully over time, as local treatment programs grow and help more people, the current cost to taxpayers will be lessened, Ikerd said. Once an addict gets help, they’re less likely to commit additional crimes; they’ll keep their jobs rather than returning to jail, and their children won’t be displaced. And the impact Brewer and Freeman calculated will decrease.

But the main goal of the county’s treatment program has always been and will remain to save lives, Ikerd said, and they’ve been successful in that regard.

The Heroin Protocol started after a local judge became concerned about an increased number of overdose deaths locally. Twenty-two people died from drug overdoses in 2015, before the Heroin Protocol was developed and put in place in 2016. Thanks to the protocol, other treatment programs and education efforts, overdose deaths locally dropped to 10 in 2017, local statistics show.

Recommendations

The researchers, who previously worked together on an impact study about Bartholomew County sports tourism in 2015, included six recommendations after studying the damage caused by the crisis. They recommend:

Community leaders, elected officials, business professionals, organizational leaders, law enforcement and others should be unbiased in their appreciation of human life and not stigmatize those afflicted by the opioid addiction epidemic

American medical and dental schools and organizations need to revisit the teaching strategy for developing new physicians and oral surgeons, particularly with regard to the risks of prescribing pharmeceuticals

Indiana, as a leading state in the bio-sciences industry, should lead a concerted effort to develop and commercialize effective, non-addictive, powerful pain relievers

Educational leaders from pre-K through college should consider expanding their curricula about understanding the risks associated with the misuse of pharmaceuticals, and learning methods to identify at-risk students so intervention can occur early

Mayors, sheriffs, congressional representatives, doctors, hospital leaders and others should consider forming a task force of local-level resources to develop comprehensive solutions in regions of the state more severely affected

Keeping an open mind about any solution that may prove beneficial

IU effort

IU said Brewer’s and Freeman’s research contributes to the university’s efforts to address the addictions crisis, particularly the IU Grand Challenges initiative Responding to the Addictions Crisis.

The initiative is a collaboration of faculty and business, nonprofit and government partners to create a comprehensive plan to reduce deaths from addiction, ease the burden of addiction on Hoosier communities and improve health and economic outcomes.

Brewer presented the study Monday at an Indiana University Grand Challenges opioid research conference in New Harmony, Indiana.

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To read the full study — introduction and three main stories — go online at ibrc.kelley.iu.edu/analysis/articles-topic/economy.html

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Ryan Brewer, associate professor of finance at Indiana University-Purdue University Columbus, and Kayla Freeman, a doctoral candidate in finance at the IU Kelley School of Business, studied the impact of the opioid crisis on state and local economies, the labor market and health care.

Here are some of their findings:

  • Economic impact to Indiana $43.3 billion from 2003 to 2017
  • $4.3 billion impact last year, about $11 million daily
  • Impact expected to exceed $4 billion this year
  • $1.72 billion in lost gross state product in 2016
  • More than 12,300 state residents estimated to have died 2003 to 2017 due to opioid overdoses
  • More than $40 million spent annually for rehabilitation
  • Cost of drug arrests and court costs exceeds $13 million annually
  • Costs of incarceration more than $70 million annually

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