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WVU chief economist: Opioid crisis has cost West Virginia nearly $1 billion

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John Deskins speaks at WVU's third Academic Media Day, which focused on the state's opioid crisis.
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West Virginia University’s chief economist said the opioid epidemic in West Virginia and across the U.S. has come with a hefty price tag, causing a void in this state’s economy of nearly $1 billion.

John Deskins, director of WVU’s Bureau of Business and Economic Research, which is housed in the College of Business and Economics where he is also an associate professor of economics, said West Virginia is at the epicenter of the national opioid crisis. He said loss of life, loss of jobs and tying up resources that could be used elsewhere in a state that has embarked on a mission to economically reinvent itself has cost West Virginia dearly.

So where does the estimate of nearly $1 billion in economic loss come in? Statistical estimates include adding together more than $322 million in productivity loss due to fatalities, more than $316 million in productivity lost in people who are not working at peak levels because they are addicts, and more than $320 million in resources tied up in the opioid crisis that could be devoted to solving other problems.

“The factors that come into play are really divided into two categories,” Deskins explained. “In the first category, there are healthcare costs, substance abuse treatment costs and criminal justice costs, such as police protection, legal and correctional facilities costs. West Virginia is tying up so many of its resources in these areas. It is a steep investment of time, skills, knowledge and resources that could be spent on tackling other problems.”

The second category is one of productivity loss and reflects the people who are addicted to opioids, including addicts who are in the workforce but are not nearly as productive as they could be and people who have died due to opioid overdose.

“This second category is comprised of people who could be helping the economy be more productive,” said Deskins, “and this sadly includes people who have died as a result of their opioid abuse.”

In an effort to help better understand the statewide and national opioid crisis, West Virginia University has undertaken a number of initiatives it believes will result in solutions to help combat the effects of opioid abuse. WVU has taken a multi-disciplinary approach to studying this addition, including researching the medical, cultural, economic, psychological and sociological effects of such abuse.

Deskins outlined the overall economic impact of the opioid crisis at WVU’s Academic Media Day recently. He said the economic estimates are based on national averages in terms of productivity loss, health care costs and substance abuse treatment costs. The national averages were simply applied to West Virginia, he said, and that he intends to make inquiries to potential sponsors to underwrite a study to allow his research unit to derive more precise opioid epidemic estimates from West Virginia data. More research, he said, is essential to understand the full effect of the opioid epidemic.

An unfortunate fact is that West Virginia is the clear frontrunner in opioid deaths nationally, with 36 deaths in 2015 per 100,000 population. New Hampshire and Ohio are a distant second and third, with 31 and 25 deaths per 100,000 population, respectively. The national average is 10.4. Deskins calculated that West Virginia’s opioid death rate totaled a $194 million gap in the state’s economy, based upon the 4,860 jobs cut due to the deaths.

“West Virginia is ranked 51st in labor force participation, which means we rank last in terms of the share of our population that is either working or actively looking for work. If you add this opioid epidemic into the equation, that makes progress even tougher. Every policy maker and business leader in the state should be focused on improving education, health and drug abuse outcomes because these obstacles really represent the overall crisis that keeps holding the state back from achieving its full economic potential,” Deskins said.

He added that the West Virginia economy has seen marked improvement from the dip in the energy industry over the past two years, but that the progress would be greater had the state not been under such strain from the opioid epidemic.

“Things have definitely improved from rock bottom where we were a year and a half ago, but could certainly be a lot better,” said Deskins. “If we could improve education and health outcomes, and if we could help people break this addiction with opioids, then we could realize much, much higher levels of economic prosperity. As evidenced on Academic Media Day, WVU has taken on this problem because we want to find solutions for the betterment of our state. 

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CONTACT: Patrick Gregg
WVU College of Business and Economics
304.293.5131; patrick.gregg@mail.wvu.edu

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