Review About Health Care Costs

In a strict economic framework, the majority of alcohol-related costs borne by the public health system would be considered a transfer rather than as a true economic cost; only the identity of the payer changes rather than the existence of the cost. If health care costs fell privately, it is likely that drinkers would take more care in avoiding such costs; the increase of net costs under a public health system as compared to a private system can be considered a real external cost of alcohol use, though whether it should be tallied as a consequence of alcohol consumption or as a consequence of a policy decision that the tax system should be used to defray the health costs of drinking is, at best, debatable. We assumed that policy’s intention is to offset transfer costs with excise taxes and so included all of these transfer costs as policy relevant. CL assessed health care costs through alcohol-attributable aetiological fractions applied to total medical and hospital expenditures in Australia. For some disorders, costs to the public health system are reduced because of alcohol consumption – the burden of heart disease is lessened by alcohol consumption while the system bears greater costs of cirrhosis. While we questioned some of their fractions, our report excised only that portion of health care expenditures borne privately by drinkers using private health care. BERL’s method began with CL’s aetiological tables, but set equal to zero any disorder’s fraction where CL had determined that alcohol reduced rather than increased health costs; BERL assumed that harmful drinking, by definition, cannot improve outcomes on any health dimension. This is clearly out of step with the bulk of the epidemiological literature that finds, in particular, reductions in coronary heart disease even among heavy drinkers. Overall mortality is certainly increased by heavy drinking, but the net effect is smaller than BERL estimates. We were unable to reverse-engineer BERL’s figures to impose CL’s fractions; we instead deducted only that portion of the health care bill paid privately by the drinker.

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