It has been estimated that the economic effects of alcoholism in the United States cost society over $42 Billion each year, approximately $12.7 billion of which goes toward health and medical costs for the treatment of alcoholism and alcohol-related conditions, while almost $20 billion is attributable to lost production.(*1) Alcoholism is the second leading disease in the United States with an estimated 10,000,000 victims.(*2)

The National Council on Alcoholism estimates that 5.3 % of the nation's employed population have a drinking problem.(*3) Using this figure there are estimated to be over 4,000 Virginia State employees who have an alcohol problem. Furthermore, studies show that alcoholism is only one among many problems (drug dependence, medical, mental, familial, etc.) troubling employees, resulting in lost production and increased, health care costs. Based on research among problem employees in an industrial setting, there is estimated to be an additional 4,000 state employees suffering from one of these other problems. In terms of dollar losses, existing alcoholism and alcohol problems among state employees alone are estimated to cost the Commonwealth about $11 million annually as a result of absenteeism, accidents, and alcohol related illnesses.

Based on claims to Blue Cross and Blue Shield of Virginia for 1976, and a survey of locally based substance abuse treatment resources, it is estimated that at least 200 state employees working in the Richmond area and 1,000 state employees statewide suffer from alcohol or drug abuse problems that require treatment. There are of course many other employees whose addiction is not discovered and goes untreated.

With the establishment of a pilot employee assistance program for state employees working in the Richmond area, the Commonwealth has taken a necessary step in providing complete health care services to its employees. Employees needing treatment, however, must currently be referred to a hospital for inpatient treatment in order for the treatment to be covered under existing health insurance coverage. The same treatment, however, could be provided at much less cost at free-standing residential facilities or through outpatient counseling if included under health insurance coverage provided state employees.

During its 1977 session, the General Assembly enacted SJR 121 which requested the State Department of Personnel and Training to develop, in cooperation with the Division of Substance Abuse, an employee assistance program and to study the feasibility of including comprehensive substance abuse treatment benefits under health insurance coverage provided state employees. This report represents the Department's efforts and provides recommendations.

Alcoholism and drug addiction are medical illnesses, which should be treated like any other medical illness. State law (§ 38.1-348.7) defines "mental, emotional, or nervous disorders" as including the physiological and psychological dependence upon alcohol and drugs.

While the number of treatment facilities is not now extensive, adequate facilities appear to be available (this includes available out-of-state programs) and licensing and program standards have been, or will soon be, developed to assure minimum levels of quality. Research based on similar pilot programs in California and Michigan demonstrate that a full range of substance abuse benefits can be purchased at relatively low cost. Additionally, Blue Cross and Blue Shield of Virginia estimates that the coverage outlined in § 38.1-348.8 of the Code of Virginia will cost an additional 14¢ per individual and 36¢ per family each month. The annual cost of providing this coverage to all state employees would be about $201,120.

The long-term benefits to the Commonwealth of treating alcoholic and drug dependent employees appear substantial, as shown by studies conducted in industrial and other private settings, and it is anticipated that savings will cover, or nearly cover, the state's cost of the additional insurance coverage needed to pay for treatment.

Because alcoholism and drug addiction are medical illnesses requiring treatment, and because utilization and cost of such treatment by state employees is expected to be relatively low, the inclusion of substance abuse benefits including inpatient treatment in either a general or psychiatric hospital, or a free-standing residential facility, and outpatient counseling, on a trial basis, appears to be feasible. To evaluate the cost-effectiveness of providing this type of coverage, a two-year utilization and cost study should be initiated as a joint venture by the Commonwealth of Virginia and Blue Cross and Blue Shield of Virginia using data available from the State Employee Assistance Service.

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(*l) NIAA, The Alcoholism Report, (August 26, 1977), p. 2.
(*2) National Council on Alcoholism, NCA Reports; Vol. 7, No. 6, (Oct., 1977).
(*3) Becky Jon Hayward, et. al. Occupational Programming: A Review of Literature, (May, 1975) p. 1.