This report, published by the West Virginia Partnership to Promote Community Well-Being and funded by the U.S. Office of Juvenile Justice and Delinquency Prevention Block Grant, details the financial burden of substance abuse on the health care system. According to the report, $116 million of the health care budget was spent on substance abuse treatment in 2007 and that figure is projected to increase to $201 million by 2010.

From the report:

This report uses a mix of methodologies from two previous studies that have attempted to estimate the cost of drug and alcohol use. The first, “Shoveling Up: The Impact of Substance Abuse on State Budgets,” was released by the National Center on Addiction and Substance Abuse (CASA) at Columbia University in 2001, and was recently updated in 2009. The second study, titled “Integrated Funding Analysis of Mental Health and Substance Use in West Virginia,” was released by the Public Consulting Group (PCG) in 2007. However, the present study makes some unique contributions to the two reports. First, it provides more recent estimates of the cost of drug and alcohol use to the state. Second, it provides cost trends over the past 8 years and, based on those trends, makes projections for costs in year 2017. Unless otherwise noted, linear trend was assumed for these projections. Third, this report includes certain sectors that are impacted by drugs and alcohol use but were excluded from one or both of the previous two reports. Finally, this report was initiated with the intent of producing annual updates; consequently, only data that are available annually were used.

The West Virginia Partnership to Promote Well-being. (2009). The financial burden of substance abuse in West Virginia: the healthcare system. Shobo, Yetty, Coombs, Wayne & Whisman, Andy

Full report:

http://www.prevnet.org/funding%20study/pdf/2009-10-FS-HealthcareReport.pdf

The Blue Cross Blue Shield Association (BCBS) released a report on October 14 outlining possible effects of health care reform legislation, including estimating that the legislation would increase the price of average annual medical claims for individual policies by 50% in five years.   

From the report:

Insurance reforms alone will substantially increase claims costs in the individual market. The individual market “risk pool” will be less healthy than today and will drive higher insurance premiums. We estimate the average medical claims for the uninsured are 20 percent higher than claims in the current individual market. In addition, certain segments with high medical utilization who are now insured through other arrangements will enter the individual market as a result of guaranteed issue and modified community rating requirements. This includes people enrolled in state high risk pools, people on COBRA through their former employers’ coverage, and other group conversion policies.

Blue Cross Blue Shield. (2009). Insurance reforms must include a strong individual mandate and other key provisions to ensure affordability. Wyman, Oliver.

Full report: http://www.bcbs.com/issues/uninsured/background/Oliver-Wyman-Report-Showing-Impact-of-Healthcare-Reform-on-Premiums-pdf.pdf

SAMHSA’s Weekly Financing News Pulse: State and Local Edition

Table of Contents

• Alabama
• California
• Delaware
• Florida
• Georgia
• Hawaii
• Iowa
• Louisiana
• Massachusetts
• Mississippi
• Missouri
• New Mexico
• New York
• North Carolina
• Oklahoma
• Oregon
• Pennsylvania
• Tennessee
• Washington
• West Virginia
• Wyoming

PLEASE NOTE: SAMHSA’s Weekly Financing News Pulse will not be produced over Thanksgiving; the next State and Local edition will be distributed on Wednesday, December 2nd.

Download SAMHSA's Weekly Financing News Pulse: State and Local Edition here: Weekly Financing News Pulse State and Local Edition final 20091118.pdf (324.13 kb)

A report released by the Nelson A. Rockefeller Institute on Government on October 15 found that state tax collections for the second quarter showed a record drop of 16.6 percent.  The report notes that every state but Vermont saw total tax revenue fall and that 36 states reported revenue declines of 10 percent or more.  The revenue shortages come as many states have already tapped their “rainy day” funds and relied heavily on ARRA funding in their most recent budgets, indicating that states will likely move to cut spending unless revenue increases.

From the report:

Total state tax collections as well as collections from two major sources — sales tax and personal income — all declined for the third consecutive quarter. Overall state tax collections in the April-June quarter of 2009, as reported by the Census Bureau, declined by 16.6 percent from the same quarter of the previous year. We have compiled historical data from the Census Bureau Web site going back to 1962. Both nominal and inflation adjusted figures indicate that the second quarter of 2009 marked the largest decline in state tax collections at least since 1963. The same is true for combined state and local tax collections, which declined by 12.2 percent in nominal terms.

The Nelson A. Rockefeller Institute of Government. (2009). State tax revenues show record drop for second consecutive quarter. Lucy Dadayan and Donald J. Boyd.

Full report: http://www.rockinst.org/pdf/government_finance/state_revenue_report/2009-10-15-SRR_77.pdf

A report by the Center for Economic Policy and Research (CEPR) advocates allowing Medicare and Medicaid beneficiaries to move to other countries and buy into their health insurance systems using U.S. vouchers.  The CEPR says the system would reduce U.S. health care costs while improving quality.  Under the proposed system, the government and the beneficiaries would split the savings obtained from using the non-U.S. systems, which spend, on average, nearly half of the $6,714 that the U.S. health care system spends per-person on health care and achieve longer life expectancies.  In addition, the program would give the provider country a premium above their costs to ensure their participation in the program.  The report estimates the cost savings of such a program based on several projected levels of participation.

From the introduction:

There are large differences between the per-person cost of providing health care in the United States and the per-person cost in other countries with comparable health care outcomes. In 2006, the per-person cost of health care in the United States was $6,714, while the average cost in the 26 countries with longer life expectancies was $2,964. This gap suggests the potential for substantial gains from trade.

This paper outlines a mechanism for taking advantage of these potential gains from trade: a globalization of the Medicare and Medicaid programs. Since most of the beneficiaries of Medicare are retirees, as are a substantial portion of the beneficiaries of Medicaid, they need not live near a workplace. Many beneficiaries have family or other ties to other countries. The globalization mechanism proposed in this paper would allow beneficiaries of these programs to have a voucher that would allow them to move to other countries and buy into their health care systems, with the government and the beneficiaries splitting the gains. To provide an inducement for other countries to participate, they would receive a premium (e.g. 10 percent) above their costs to ensure that they benefit from this process as well.

Center for Economic Policy and Research. (2009). Free trade in health care: the gains from globalized Medicare and Medicaid. Dean Baker and Hye Jin Rho.

Full report: http://www.cepr.net/documents/publications/free-trade-hc-2009-09.pdf

A TriNet Group Inc. survey found 71 percent of small business owners worry that health care reform legislation will increase their health care costs and 56 percent believe it will cause “unnecessary complexity”.  Of those respondents who believe that the legislation will increase cost, 44 percent indicated that they would reduce benefits to recoup their costs while 21 percent said they would first look to cut wages and 20 percent said they would reduce staff.

From the introduction:

Full report: http://www.trinet.com/documents/white_papers/TriNet_WP_2009_HRTrends_Q3.pdf