The Economics of Addiction

Calculating the True Cost of Addiction and Recovery

Untreated addiction is very dangerous. It can be viewed as a life threatening medical condition with a terrifying mortality rate. But this is not an untreatable condition. Addiction has a high mortality rate if untreated, but there are treatments available that lower the mortality rate. If you pick the right treatment, the mortality rate drops to very very low.

We encourage addicts and their families to think in term's of the "total cost of addiction and recovery" when considering their options. Addiction is a “pay now or pay later” scenario. There is no "low cost option." It is essential to take into account the total financial costs of various scenarios and also the non-financial costs (emotional, relational, spiritual costs). 

While not recommended, one option is non-treatment. This is the scenario when treatment is delayed or avoided altogether. The non-treatment scenario is high risk because the addiction could become injured, could overdose or experience a fatal accident, or become incarcerated for a drug possession offence. Non-treatment is one of the most expensive scenarios in non-financial costs as well as financial costs. We assume this isn’t a path you plan to go down since you care enough to be reading this report and are clearly seeking some kind of sustainable solution for this life-threating problem you and your family is confronting. 

Unsustainable recovery approaches (conventional treatment) only reduces the risk of death or incarceration slightly but is very very expensive. So this scenario comes a very high expense with very little return. The chance of relapse is very high and the costs of relapses, injuries or legal expenses are also very high. And if we are calculating the total cost, including non-financial costs, the "once-an-addict-always-an-addict" beliefs reinforced by many 12-step programs and the 90% chance of relapse from the revolving door of rehab approach are very costly in terms of relationships, emotional trauma and spiritual impact on you, your loved ones and family. 

A careful anlaysis of the total costs of addiction and recovery leads most thoughtful people to pursue some version of what we call long-term, sustainable recovery. If you take advantage of the medical innovations of alternative medicine detox, combined with cutting-edge treatments that get at the root cause of addiction (cocooning, psychotherapy and long-term recovery coaching), then you are looking at a medium financial cost (there is no low financial cost with addiction). But the non-financial costs of sustainable recovery are low. And the chance of relapse is very low. 

Below we will help you thoroughly consider the three scenarios available to you and your family. 

 

 

 

 

 

 

 

Scenario 1 - No Further Treatment 

In this scenario, you don’t spend any more money on treatment. Even if you stop paying for treatment, there are still a lot financial costs to consider as well as non-financial costs. The first consideration is the cost of the drug habit. Depending on the substance, this could be $100 to $400 a week or about $5,000 to $20,000 a year just for the drug cost alone. Cost of hospital trips in case of a overdose, a medical complication or accident of some kind could easily add up to  $10,000 to $50,000 a year for even just a few trips to the hospital, even with medical insurance when you count the deductibles and the inevitable hike in your insurance rates. You would need to include the cost of financial support from family and loved ones if unemployed or under-employed. That could easily be $50,000 a year or more.   

In the case of an opiate addiction, untreated is $100,000 or more over just 1-2 years. If the addiction it continues to go untreated, and if you don’t succumb to the high mortality rate, or end up in prison, then over 3-5 years, you are looking at many hundreds of thousands of dollars. 

It is nearly impossible to calculate the non-financial costs of an untreated addiction if you or your loved ones ends up injured, incarcerated or dying. The emotional and relationship toll is enormous for an untreated addiction. There is a lot of trauma and a terrible emotional price to be paid by the addict and their loved ones, including damaged or destroyed reputation and relationships. In addition to the core trauma or psychological wound that created the addiction in the first place, many more layers of trauma and wounding are added, creating an even heavier emotional and psychological burden for your loved one and your family. 

Scenario 2 - Conventional Treatment with 90% Chance of Relapse  

The “Rehab” industry is a business. Most rehab providers (with very few exceptions) have a business model that incentivizes relapses. There is no incentive, in fact a reverse incentive, for addressing the root cause of addiction. Very few conventional treatment methods, including 12-steps, even attempt to treat the root cause of addiction, and even fewer succeed in identifying and healing the root cause of addiction. We refer to most “conventional treatment” as “unsustainable recovery” precisely because the relapse rate overall is around 90%. Even higher for Rehab at 93%. 

Addicts who go the conventional rehab route can expect a 90% chance or relapse. And the cost of relapse is very high and usually under-estimated. There are both financial and non-financial costs that should be considered. The financial costs of investing into temporary treatment solutions that don’t get to the root of addiction are very high. Even with insurance, the cost for rehab is $20k to $50k and rehab has about a 93% chance of relapse, so you should expect many trips to rehab. The cost of complications and ongoing infections. Insurance may pay for part of it, but even your deductibles are $5,000 to $10,000 and it significantly increases your overall health insurance for many years to come. Medical expenses associated with relapse (which, like non-treatment can get very expensive) add up to many tens of thousands of dollars. With a 90% failure rate of conventional treatment, you are still looking at high likelihood of many years of in and out of addiction, similar to scenario one, which is still approaching $100,000 or more, not to mention the high chance of incarceration, serious injury or even death. 

Conventional treatment is a business, and in the case of most rehab models, is designed for “repeat customers”. That’s why they do not attempt to get at the root cause of the addiction with therapy. It would reduce their “repeat customer” revenue. They are not incentivized to get at the cure. They are incentivized to get people just well enough (detox using conventional methods) that they will stay in the system and become repeat customers. Rehab averages $20k (can be much more than that). At a 93% return rate, we can conservatively estimate your loved one will return at least 3 times over the course of the many years of their addiction. That is conservatively $60k. We know many people that have spent 2x or 3x that much on the revolving door of rehab. 

It is important to consider the non-financial costs of conventional treatment. Health costs, emotional and relational cost are very high. Trauma and other terrible emotional cost are often paid by the addict and their loves ones.  Damaged or destroyed reputation and relationships. Going to traditional rehab puts you back as a long-term customer of “big pharma.” You are now paying for a long-acting opiate addiction, for example Suboxone, and all the other pharmaceuticals including as anti-depressents, anti-anxiety and all the other maintenance medications because conventional treatment does not attempt to address the root cause. They are creating long-term customers. This is a horrible price to pay in terms of mental health.  

Scenario 3 - Alternative Treatment with Very Low Chance of Relapse

At first glance, an investment into alternative methods may appear to be larger because they don’t all accept insurance and the focus is on the whole first year rather than just the first month (as in the “revolving door of rehab”). However, a closer inspection reveals that in the long term, when the total cost is calculated, it is actually a lower cost.  You can throw money at the symptoms until you are blue in the face or your bank account is empty, whichever comes first. Or you can put your loved one into sustainable recovery program that will encourage and develop that person to become a self-sufficient member of society. Once the person finds something better than using substances, they will no longer be interested in using. They will have something far more valuable and desirable. A life that is enjoyable, meaningful, and satisfying. They will learn to meet their needs in ways that are much better than using. 

Let’s have a look at the cost of sustainable recovery. The first cost is alternative medicine detox. That typically ranges from around $5,000 to $15,000. As a reminder, we do not provide detox services at Root Recovery, but there are many excellent options available that have excellent reputations. The next component is what we call the “cocoon.” This is often referred to as “aftercare” in the recovery industry. Residential Aftercare costs around $12,000 for the first month and around $4,000 for Extended Aftercare (essentially day treatment). And recovery coaching (which is essential for sustainable recovery) costs about $5,000 for one year. The total cost is around $25,000 - $50,000 for a full year of support with about a 70% success rate. When you do the analysis, the non-financial costs of alternative treatment is very low. Actually, your emotional life, and the emotional life and relationships with your loved ones improve dramatically. 

A full anlaysis of the total costs of addiction and recovery shows that the alternative approach is actually much cheaper in the long run than the conventional approaches.  

 

Scenario 1 - No Further Treatment 

In this scenario, you don’t spend any more money on treatment. Even if you stop paying for treatment, there are still a lot financial costs to consider as well as non-financial costs. The first consideration is the cost of the drug habit. Depending on the substance, this could be $100 to $400 a week or about $5,000 to $20,000 a year just for the drug cost alone. Cost of hospital trips in case of a overdose, a medical complication or accident of some kind could easily add up to  $10,000 to $50,000 a year for even just a few trips to the hospital, even with medical insurance when you count the deductibles and the inevitable hike in your insurance rates. You would need to include the cost of financial support from family and loved ones if unemployed or under-employed. That could easily be $50,000 a year or more.   

In the case of an opiate addiction, untreated is $100,000 or more over just 1-2 years. If the addiction it continues to go untreated, and if you don’t succumb to the high mortality rate, or end up in prison, then over 3-5 years, you are looking at many hundreds of thousands of dollars. 

It is nearly impossible to calculate the non-financial costs of an untreated addiction if you or your loved ones ends up injured, incarcerated or dying. The emotional and relationship toll is enormous for an untreated addiction. There is a lot of trauma and a terrible emotional price to be paid by the addict and their loved ones, including damaged or destroyed reputation and relationships. In addition to the core trauma or psychological wound that created the addiction in the first place, many more layers of trauma and wounding are added, creating an even heavier emotional and psychological burden for your loved one and your family. 

Scenario 2 - Conventional Treatment with 90% Chance of Relapse  

The “Rehab” industry is a business. Most rehab providers (with very few exceptions) have a business model that incentivizes relapses. There is no incentive, in fact a reverse incentive, for addressing the root cause of addiction. Very few conventional treatment methods, including 12-steps, even attempt to treat the root cause of addiction, and even fewer succeed in identifying and healing the root cause of addiction. We refer to most “conventional treatment” as “unsustainable recovery” precisely because the relapse rate overall is around 90%. Even higher for Rehab at 93%. 

Addicts who go the conventional rehab route can expect a 90% chance or relapse. And the cost of relapse is very high and usually under-estimated. There are both financial and non-financial costs that should be considered. The financial costs of investing into temporary treatment solutions that don’t get to the root of addiction are very high. Even with insurance, the cost for rehab is $20k to $50k and rehab has about a 93% chance of relapse, so you should expect many trips to rehab. The cost of complications and ongoing infections. Insurance may pay for part of it, but even your deductibles are $5,000 to $10,000 and it significantly increases your overall health insurance for many years to come. Medical expenses associated with relapse (which, like non-treatment can get very expensive) add up to many tens of thousands of dollars. With a 90% failure rate of conventional treatment, you are still looking at high likelihood of many years of in and out of addiction, similar to scenario one, which is still approaching $100,000 or more, not to mention the high chance of incarceration, serious injury or even death. 

Conventional treatment is a business, and in the case of most rehab models, is designed for “repeat customers”. That’s why they do not attempt to get at the root cause of the addiction with therapy. It would reduce their “repeat customer” revenue. They are not incentivized to get at the cure. They are incentivized to get people just well enough (detox using conventional methods) that they will stay in the system and become repeat customers. Rehab averages $20k (can be much more than that). At a 93% return rate, we can conservatively estimate your loved one will return at least 3 times over the course of the many years of their addiction. That is conservatively $60k. We know many people that have spent 2x or 3x that much on the revolving door of rehab. 

It is important to consider the non-financial costs of conventional treatment. Health costs, emotional and relational cost are very high. Trauma and other terrible emotional cost are often paid by the addict and their loves ones.  Damaged or destroyed reputation and relationships. Going to traditional rehab puts you back as a long-term customer of “big pharma.” You are now paying for a long-acting opiate addiction, for example Suboxone, and all the other pharmaceuticals including as anti-depressents, anti-anxiety and all the other maintenance medications because conventional treatment does not attempt to address the root cause. They are creating long-term customers. This is a horrible price to pay in terms of mental health.  

Scenario 3 - Alternative Treatment with Very Low Chance of Relapse

At first glance, an investment into alternative methods may appear to be larger because they don’t all accept insurance and the focus is on the whole first year rather than just the first month (as in the “revolving door of rehab”). However, a closer inspection reveals that in the long term, when the total cost is calculated, it is actually a lower cost.  You can throw money at the symptoms until you are blue in the face or your bank account is empty, whichever comes first. Or you can put your loved one into sustainable recovery program that will encourage and develop that person to become a self-sufficient member of society. Once the person finds something better than using substances, they will no longer be interested in using. They will have something far more valuable and desirable. A life that is enjoyable, meaningful, and satisfying. They will learn to meet their needs in ways that are much better than using. 

Let’s have a look at the cost of sustainable recovery. The first cost is alternative medicine detox. That typically ranges from around $5,000 to $15,000. As a reminder, we do not provide detox services at Root Recovery, but there are many excellent options available that have excellent reputations. The next component is what we call the “cocoon.” This is often referred to as “aftercare” in the recovery industry. Residential Aftercare costs around $12,000 for the first month and around $4,000 for Extended Aftercare (essentially day treatment). And recovery coaching (which is essential for sustainable recovery) costs about $5,000 for one year. The total cost is around $25,000 - $50,000 for a full year of support with about a 70% success rate. When you do the analysis, the non-financial costs of alternative treatment is very low. Actually, your emotional life, and the emotional life and relationships with your loved ones improve dramatically. 

A full anlaysis of the total costs of addiction and recovery shows that the alternative approach is actually much cheaper in the long run than the conventional approaches.  

 

We Are Happy to Chat With You About Your Situation

Just grab a slot on our calendar in the next day or two and we can help you think through your best options based on your unique situation.