The Opioid Crisis: Can Insurance Help?


Let’s start by putting the opioid crisis in context. Here is some recent data from the U.S. Centers for Disease Control and Prevention:

  •  In 2016, 214 million prescriptions were written for opioid pain medication – a rate of 66.5 prescriptions per 100 people—and nearly two-thirds of the 64,000 drug overdose deaths in America (66%) involved a prescription or illicit opioid.
  • In 2017, 47,000 people died of opioid overdoses, and over 70,000 in 2018.
  • Every day, more than 1,000 people are treated in emergency rooms for misusing prescription opioids.
  • About 80% of people who use heroin first misused prescription opioids.
  • As many as 1 in 5 people (20%) receive prescription opioids long-term for noncancerous pain in primary care settings.

Those are some very scary numbers. But let’s step back and look at this through an insurer’s lens. Let’s say a physician did not have liability insurance that covered opioid use/abuse. How much incentive would that physician have to prescribe opioids to a patient? Put another way, how important is the presence or absence of liability coverage when it comes to delivering opioids to patients?

A different national crisis, sexual harassment, brings up a similar conundrum, in considering employment practices liability insurance (EPLI). When this product first came to market, the insurance industry was asked whether it was moral for an insurance company to provide insurance to cover the costs of litigation, when the insured company was found negligent in a claim for sexual harassment. The logic goes that by paying the fines and the costs of litigation, wasn’t the insurance company providing a product that would encourage rather than discourage wrongful behavior? The same could be said about the opioid crisis.

On another front, what is the responsibility of pharmaceutical companies in the opioid issue? Do they bear liability for how they market opioids? And by extension, does the liability insurer that provides financial coverage to the pharmaceutical manufacturer bear any responsibility?

And the possibilities don’t stop there. These are fair philosophical questions to ask, but this isn’t a hypothetical exercise—it’s literally a matter of life and death. I think this is a key moment for the insurance industry to step up and take a leadership role in helping to resolve it. One possible approach would be for all insurance industry players to share data on a larger scale—helping to identify behaviors and patterns that would otherwise be invisible when looked at in smaller data sets.
The industry needs to unite as a whole to address this crisis—insurers, providers and pharma. Only by working together can they identify where and how to rapidly apply intervention before both individual and collective problems become worse—and with hard work, to turn things around.

Data Makes Insurance a Lightning Rod for Change

Because insurance is a data-driven industry that has been protecting businesses and people for several hundred years, it holds information that can help to explain every crisis that comes down the pike. As such, it has become a sort of lightning rod for almost every major change that’s happened in society. For one historical example, the role of the Insurance Institute for Highway Safety (IIHS) has been to reduce traffic deaths. The data-driven influence of the IIHS has led to universal seatbelt use, reduced drunk driving deaths, and improved crash worthiness ratings. These were all societal crises that had actual solutions—and insurance was instrumental in providing them.

Right now, we have a new crisis in need of an immediate insurance industry response. The opioid crisis is possibly the granddaddy of social issues and societal change. You saw the numbers: 11 million people abusing opioid drugs; 130 dying each and every day from opioid overdose; health care providers writing opioid prescriptions numbering near two-thirds of every man, woman and child in this country.

What role can insurance companies play in ameliorating this situation?

Health insurance companies and property & casualty insurers are significant actors in this crisis. Consider that insurance is being used to pay the pharmacy for the prescription, whether that prescription was written as part of a formulary of a health insurance company or for a workers’ compensation claim. Switching to the liability side, insurance companies are also paying for the malpractice claim that is filed against a physician or hospital for wrongful death when opioids are involved. This isn’t to say that insurers are at fault, I’m just saying they can step up and be a major part of the solution.

For far too long, pharmaceutical companies have been managing and controlling the “spin” on opioids—that is, the release of information via the media, medical researchers, and government. But with close to 50,000 people dying from opioid overdoses each year, the numbers are too staggering to ignore, or sweep under the rug. The insurance industry needs to intervene.


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