Financing Strategies and Cost-Effectiveness

There are significant social and economic costs to ignoring trauma. Numerous reputable studies have documented the link between the abuse and neglect of children and a wide range of medical, emotional, psychological, and behavioral disorders in adulthood.

Facts and Discussion Points:

1--Child abuse and neglect cost the United States almost $94 billion per year, or $258 million per day ($1,462 annually for every American family). The annual cost is conservatively estimated to be $94,076,882,529 per year in a 2001 report. Direct costs associated with the immediate needs of abused or neglected children total $24,384,347,302. They include: hospitalization, $6,205,395,000; chronic health problems, $2,987,957,400; mental health care system, $425,110,400; child welfare system, $14,400,000,000; law enforcement, $24,709,800; judicial system, $341,174,702. Indirect costs associated with the long-term and/or secondary effects of child abuse and neglect total $69,692,535,227. They include: special education, $223,607,830; mental health and health care, $4,627,636,025; juvenile delinquency, $8,805,291,372; lost productivity to society, $656,000,000; adult criminality, $55,380,000,000.1

2--Clients with a history of sexual abuse (with or without physical abuse) utilize significantly more crisis, inpatient, and restrictive residential setting services than those with a history of physical abuse alone.2

3--Long-term sequelae of severe child abuse generate over $100 billion in psychiatric and medical health care costs per year in North America. The majority of these costs are unrecognized and misattributed.3

4--In psychiatry, trauma-specific psychotherapy is the most financially cost-effective intervention.3

5--Annual cost of mental health care for victims of attempted or completed rape is $863 million. Total annual mental health care costs for adult survivors of child sexual abuse is $2.l billion.4

6--In Massachusetts, PTSD that is caused primarily by physical or sexual abuse in childhood costs the mental health care system about $47 million per year.5

7--Money is often spent in vain on treatment for substance abuse due to high relapse rates from unaddressed trauma-related problems.6

8--According to the National Mental Health Association (NMHA), American businesses, governments, and families contribute $113 billion per year to the cost of untreated and mistreated mental illness. Between 50% and 75% of these untreated and mistreated people have a history of trauma that either caused or is contributing to their mental illness. Based on the above figures, the cost of untreated trauma is between $65,500,000,000 and $84,750,000,000 per year.7

9--Seventy-five percent of adults in substance abuse treatment have a history of childhood abuse and neglect.7 The cost of unaddressed childhood trauma, based on public health care costs related to substance abuse treatment provided through Medicaid, is:

* $582 million for addictive disorders;

* $84 million for diseases attributable to substance abuse;

* over $2 billion for disease for which substance abuse is a risk factor; and

* $252 million for consumers with a secondary diagnosis of substance abuse (estimated % applied to figures from MIMH Policy Brief, June 2002).7, 8

11--The total cost of substance abuse and mental illness per year is more than $300 billion. Of this amount, 75% or $225 billion may be attributable to unaddressed childhood trauma (estimated percentage applied to figures from MIMH Policy Brief, June 2002).8

12--Trauma caused by the Oklahoma City bombing resulted in long-term mental health problems for many people. The average costs of mental health services not covered by insurance were:

* $2.8 million in treatment of direct victims;

* $1.15 million out-of-pocket cost for rescuers;

* $2.2 million for others in community with depression or PTSD; and

* $3.2 million for substance abuse treatment. 9

Recommendations:

* Increase collaboration between systems (substance abuse, mental health, correctional, etc.), and include trauma assessment and treatment to reduce costs.

* Advocate routine intake assessment and screening for consumers with abuse history and trauma symptoms, as well as referral to trauma services as needed. Early treatment will help reduce the cost of care.

* Incentivize private sector entities to join the initiative by articulating actions they can take that will decrease costs.

Financing Strategies and Cost-Effectiveness References

1. Prevent Child Abuse America. (2001). Total estimated cost of child abuse and neglect in the United States: Statistical evidence. Report funded by the Edna McConnell Clark Foundation.

2. Newmann, J. P., Greenley, D., Sweeney, J. K., & Van Dien, G. (1998). Abuse histories, severe mental illness, and the cost of care. In B. L. Levin, A. K. Blanch, A. Jennings, Women’s Mental Health Services: A Public Health Perspective. pp. 279-308. Sage.

3. The Ross Institute (http://www.rossinst.com/TRAUMA.htm).

4. Miller, T. R., Cohen, M. A., & Wiersama, B. (1996). Victim costs and consequences: A new look. U. S. Department of Justice, Office of Justice Programs, National Institute of Justice.

5. van der Kolk, B. A. (January 1998). Psychology and psychobiology of childhood trauma. Prax Kinderpsychol Kinderpsychiatr, Vol. 47(1), pp. 19-35.

7. Substance abuse treatment for persons with child abuse and neglect issues: Treatment Improvement Protocol (TIP) Series 36. (2000). Substance Abuse and Mental Health Services Administration, Center for Substance Abuse Treatment.

8. University of Missouri Columbia School of Medicine. (April 2002). Missouri Institute of Mental Health policy brief.

9. Healing the future: The long-term mental health needs of Okalahoma City. Department of Psychiatry and Behavioral Sciences, College of Public Health, University of Oklahoma. (limited public release).