Legislature(2021 - 2022)DAVIS 106
02/03/2022 11:30 AM House WAYS & MEANS
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): the Cost of Substance Misuse in Alaska | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
February 3, 2022
11:33 a.m.
MEMBERS PRESENT
Representative Ivy Spohnholz, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Calvin Schrage
Representative Andi Story
MEMBERS ABSENT
Representative Mike Prax
Representative David Eastman
COMMITTEE CALENDAR
PRESENTATION(S): THE COST OF SUBSTANCE MISUSE IN ALASKA
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DONNA LOGAN, Senior Consultant
McKinley Research Group
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation, titled
"Economic Costs of Substance Misuse in Alaska."
MICHAEL BALDWIN, Senior Evaluation and Planning Officer
Alaska Mental Health Trust Authority
Anchorage, Alaska
POSITION STATEMENT: Testified during the presentation on the
cost of substance abuse in Alaska.
ACTION NARRATIVE
11:33:17 AM
CHAIR IVY SPOHNHOLZ called the House Special Committee on Ways
and Means meeting to order at 11:33 a.m. Representatives
Josephson, Schrage, and Spohnholz were present at the call to
order. Representatives Wool and Story arrived as the meeting
was in progress.
^PRESENTATION(S): The Cost of Substance Misuse in Alaska
PRESENTATION(S): The Cost of Substance Misuse in Alaska
11:33:43 AM
CHAIR SPOHNHOLZ announced that the only order of business would
be a presentation on the Cost of Substance Misuse in Alaska.
11:34:45 AM
DONNA LOGAN, Senior Consultant, McKinley Research Group,
provided a PowerPoint presentation, titled "Economic Costs of
Alcohol & Drug Misuse Reports" [hard copy included in the
committee packet]. She began on slide 2, which highlighted the
two studies one titled "Economic Costs of Alcohol Misuse in
Alaska" and the other titled "The Economic Costs of Drug Misuse
in Alaska." She noted that the research organization changed
names from "McDowell Group" to "McKinley Group." The studies
use data from 2018 and she noted the significance of the COVID-
19 pandemic subsequent increased opioid use in recent years.
Substance misuse has many adverse health and social
consequences. Some consequences are tangible like healthcare,
productivity, et cetera. Some consequences are intangible like
quality of life, pain, suffering, et cetera.
11:41:14 AM
MS. LOGAN stated that $3.45 billion is the total economic cost
of substance misuse. This calculation is based on values
available but does not reflect the full picture. The highest
economic costs substance misuse is associated with are health
care, followed by productivity. In response to Representative
Wool, she clarified that the $266 million that represents
traffic collisions on the pie chart shown on slide 5 accounts
for collisions specifically caused by alcohol or drug misuse.
11:43:20 AM
MS. LOGAN advanced to slide 6, which provided a breakdown of
costs associated with both alcohol and drug misuse. Alcohol
misuse represents approximately 70 percent of the total cost
associated with substance misuse at $2.39 billion. Drug misuse
was associated with a cost of $1.06 billion. She noted that
both drugs and alcohol impacted the overall economy, though
impacts differed. She highlighted high healthcare costs which
are associated with alcohol misuse versus the proportionately
higher criminal justice and protective services costs for drug
misuse.
11:50:04 AM
MS. LOGAN continued to slides 7 and 8 and addressed productivity
losses in detail. She discussed the cost and diminished
productivity associated with premature deaths. In response to
Representative Wool, she said models were used from national
organizations with specific variables applied to Alaskan
datasets. Additionally, incarceration or addiction treatment
contributes to productivity losses. Total costs associated with
productivity loss are about $1.1 billion. In 2016, 8 percent of
all collisions that occurred in state were due to substance
misuse. She said that 726 Alaskans were involved in collisions
due to alcohol misuse and 194 due to drug misuse. There are
many costs involved with vehicle collisions. Productivity lost
due to injury is significant.
11:55:37 AM
MS. LOGAN said that criminal justice and protective services
account for $659 million in costs. About 65 percent of arrests
and offenses that occur in the state are directly related to
substance abuse. Of the total crime victims in Alaska, 55
percent were victims of crimes associated with or fueled by
substances. She said there are direct costs like property
damage and indirect costs, such as trauma, pain, and suffering.
She noted that indirect costs are not included in the cost
analysis because of how difficult it is to put a price tag on
quality of life. It is estimated that 31 percent of the
spending associated with the Office of Children's Services
(OCS), $50 million dollars is attributed to alcohol and drug
misuse. She noted that in Alaska, the state is responsible for
more criminal justice costs in comparison with states with
federal penitentiaries.
11:59:35 AM
MS. LOGAN detailed that $183 million is spent on hospital-
related costs for drug and alcohol misuse. The figure would be
much higher, at $1.3 billion, if secondary diagnoses were
included. She stated that additional health costs associated
with alcohol and drug misuse includes $16 million for
prescription drugs for alcohol treatment, $41 million for
hepatitis C treatment from drug misuse, and $2 million for
HIV/AIDS treatment from drug misuse.
12:04:46 PM
MS. LOGAN emphasized that the data associated with public
assistance and social services is limited and outdated. The
numbers referenced may represent significant underreporting.
There are current estimates of $57 million in costs for social
welfare programs such as adult public assistance, senior
benefit, Supplemental Nutrition Assistance Program (SNAP),
Tribal assistance, work services, and Head Start.
12:12:10 PM
MS. LOGAN shared her understanding that OCS captures situational
data during investigations and when children are removed from a
home. Case files are also considered. She acknowledged the
complications associated with the data. She reiterated the
limitations with the data due to its complexity. She noted that
in the alcohol report, there was a chapter set aside for fetal
alcohol spectrum disorder (FASD) costs, utilization of medical
health services, and lifetime costs of FASD individuals. The
level of access to Medicaid data has increased, which is a
credit to the state for investing in the availability of
important data.
12:19:21 PM
MS. LOGAN showed the alcohol beverage tax retained in the
general fund (GF) per capita graph on slide 15. She stated that
50 percent of the receipts of alcohol tax revenue goes into the
alcohol and other drug use treatment and prevention fund. The
other 50 percent goes into the General Fund. The GF portion is
approximately $20.5 million or $30 per capita in Alaska and has
remained relatively flat over time. She noted that in fiscal
year 2021 (FY 21), $30 million was collected in marijuana taxes.
Of marijuana taxes $8 million is excise tax, $7 million goes
into the marijuana education and treatment fund, and $15 million
goes into the recidivism reduction fund.
12:23:47 PM
MS. LOGAN detailed the GF portion of spending related to
alcohol, opioid and other drug misuse on slide 17. Medicaid
spends $37 million on alcohol misuse, $18 million for opioid
misuse, and $21 million for other drug misuse. The Division of
Behavioral Health's prevention grants are supported by the GF,
including $10 million allocated for alcohol misuse and $4
million for drug misuse. Social welfare programs funded by the
GF include $7 million for alcohol misuse and $3 million for drug
misuse. Criminal Justice and Corrections depend on the GF and
attribute $31 million for addressing alcohol misuse and $37
million for drug misuse.
12:26:40 PM
MS. LOGAN concluded that the total economic cost of alcohol
misuse is $2.39 billion. The total economic cost of drug misuse
is $1.06 billion.
12:27:46 PM
MICHAEL BALDWIN, Senior Evaluation and Planning Officer, Alaska
Mental Health Trust Authority, emphasized that current data
limitations create conservative estimates for figures mentioned
by Ms. Logan. Investing in prevention and treatment and efforts
to support the implementation of the 1115 demonstration waiver
to improve the behavioral health system care is important. He
noted the Title 4 alcohol review that is currently underway.
Access to care is an ongoing battle, and the more access to
treatment for Alaskans, the better. The psychiatric crisis care
continuum is an important program to provide care to Alaskans in
need. He noted the "Crisis Now" model.
12:36:42 PM
MS. LOGAN concluded that prevention is an important factor that
is difficult to measure in terms of dollars. She highlighted
that prevention is an important part of addressing crises and
saving lives.
CHAIR SPOHNHOLZ thanked both presenters for their thoughtful and
methodical presentation. She commented on the economic drag
caused by loss of productivity and intergenerational trauma that
builds over time. She expressed that early intervention is
important and shared a personal anecdote about alcohol misuse in
her family. She emphasized the importance of helping people
find recovery the moment they are ready. A wide availability
and variety of options for people in need are important
investments to increase prevention and limit severe chronic
substance misuse in Alaska.
12:41:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Ways and Means committee meeting was adjourned at 12:41 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AMHTA Drug and Alcohol Costs Presentation, 2.3.2022.pdf |
HW&M 2/3/2022 11:30:00 AM |