The avoidable costs of alcohol abuse in Australia and the potential benefits of effective policies to reduce the social costs of alcohol
2. A brief summary of methodological issues
The aggregate social costs of alcohol abuse to the Australian community in 2004/05 are calculated to have been over $15 billion (Collins & Lapsley, 2008a). Greater detail of this estimate is provided in Section 3 below. This estimate was produced by comparing the actual Australian situation (in relation to such issues as mortality, morbidity, health costs, workplace productivity, crime levels and road accidents) with a hypothetical alternative situation which would have prevailed had there been no alcohol abuse in the preceding 40 years. This alternative counterfactual situation is purely hypothetical in that it is almost universally recognised that it would be impossible to eliminate all alcohol abuse. Thus, the issue arises as to what proportion of aggregate abuse costs could potentially be avoided over time, if the appropriate public policies were implemented. In other words, the issue is to identify the proportion of the aggregate social costs of alcohol abuse which is avoidable. The minimum achievable level of alcohol abuse is known as the Feasible Minimum.
Single et al. (2003) make the following distinction between avoidable and unavoidable costs of substance abuse:
- Unavoidable costs comprise the costs which are currently borne relating to drug abuse in the past, together with the costs incurred by the proportion of the population whose level of drug consumption will continue to involve costs. Avoidable costs are those costs which are amenable to public policy initiatives and behavioural changes.
Avoidable cost estimates indicate the benefits potentially available to the community as a result of directing public resources to the prevention or reduction of substance abuse. They provide valuable economic information on the basis of which a more efficient allocation of productive resources could be achieved.
- to provide an indication of priorities for substance abuse expenditures and programs;
- to assist in the appropriate targeting of specific problems;
- to identify information gaps and research needs;
- to provide baseline measures to determine the efficiency of substance abuse policies and programs.
The Health Canada avoidable cost guidelines address the following broad possible approaches towards the estimation of avoidable costs:
- the distributional approach, an epidemiological technique which examines alternative counterfactual situations;
- the Arcadian Normal, which identifies best performance (in terms of abuse-related mortality and morbidity outcomes) in countries which have similar relevant economic and demographic characteristics to the country under study;
- exposure-based comparators, an approach similar to the Arcadian Normal approach, but based on risk exposure rather than mortality and morbidity outcomes; and
- evidence on the effectiveness of anti-abuse policy interventions in other comparable jurisdictions.