A Note on the 2015 Revision

The Economic and Societal Impact of Motor Vehicle Crashes was originally published in May 2014. Subsequent to its publication, a coding error was discovered in the SAS program that was used to aggregate costs to persons with multiple injuries. This error impacted estimates of medical care costs, lost work and household productivity, and insurance administrative and legal costs. After evaluating the potential impact of this error, the authors determined that it was large enough to warrant a revision to the base report. This revised report thus replaces the May 2014 report in its entirety.

DISCLAIMER

This publication is distributed by the U.S. Department of Transportation, National Highway Traffic Safety Administration, in the interest of information exchange. The opinions, findings, and conclusions expressed in this publication are those of the authors and not necessarily those of the Department of Transportation or the National Highway Traffic Safety Administration. The United States Government assumes no liability for its contents or use thereof. If trade or manufacturers’ names or products are mentioned, it is because they are considered essential to the object of the publication and should not be construed as an endorsement. The United States Government does not endorse products or manufacturers.

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In 2010 the total economic cost of motor vehicle crashes in the United States was $242 billion. This represents the present value of lifetime economic costs for 32,999 fatalities, 3.9 million non-fatal injuries, and 24 million damaged vehicles. These figures include both police-reported and unreported crashes. When quality-of-life valuations are considered, the total value of societal harm from motor vehicle crashes in 2010 was $836 billion.

such as physical pain or lost quality-of-life are also examined in estimates of comprehensive costs, which include both economic cost components and quality-of-life valuations.

Economic Impact of Crashes

costs.

totaled $76.1 billion and accounted for 31 percent of all economic costs.

10 percent of the total costs. Medical costs accounted for 21 percent of costs from non-fatal injuries.

$28 billion, or 12 percent of total economic crash costs.

motorists delayed in traffic, charities, and health care providers pay about 16 percent. Overall, those

not directly involved in crashes pay for over three-quarters of all crash costs, primarily through insurance premiums, taxes and congestion related costs such as travel delay, excess fuel consumption, and increased environmental impacts. In 2010 these costs, borne by society rather than by crash victims, totaled over $187 billion.

Incidence of Crashes

Alcohol Involvement in Crashes

Impact of Speed-Related Crashes

3.0 million vehicles in property-damage-only crashes. This represents 32 percent of all fatalities; 20 percent of all nonfatal injuries, and 16 percent of all property-damage-only crashes.

medical care, lost productivity, and other injury-related costs.

280,000 fatalities and 7.2 million serious injuries. This saved society $1.2 trillion in medical care, lost productivity, and other injury-related economic costs. During the same time period, nearly 367,000 additional fatalities and 5.8 million additional serious injuries could have been prevented by seat belts if all occupants had used them. This represents an economic loss of roughly $1.1 trillion in unnecessary expenses and lost productivity. 4

Distracted Driving Crashes

735,000 nonfatal injuries and damaged 3.3 million vehicles in property-damage-only crashes in

2010. This represents about 10 percent of all motor vehicle fatalities and 18 percent of all nonfatal crashes. These crashes cost $39.7 billion in 2010, roughly 16 percent of all economic costs from motor vehicle crashes.

Societal Impacts of Crashes (Comprehensive Costs)

28 percent of all societal harm from motor vehicle crashes. Eighty-five percent of these costs occurred in crashes where one driver had a BAC of .08 g/dL or greater.

The economic toll of motor vehicle crashes is borne by society through a variety of payment mechanisms. The most common of these are private insurance plans such as Blue Cross-Blue Shield, HMOs, commercial insurance policies, or worker’s compensation. Medicare is the primary payer for people over the age of 65. When these sources are not available, government programs such as Medicaid may provide coverage for those who meet eligibility requirements. A host of other Federal, State, and local programs such as CHAMPVA, Tricare, Title 5, and Indian Health Services also provide health care coverage for specific groups. Expenses not covered by private or governmental sources must be paid out-of-pocket by individuals, or absorbed as losses by health care providers.

Blincoe (1996) provided estimates of sources of payment for motor vehicle crashes that combined analysis of CODES data with previous estimates developed by the Urban Institute (Miller et al., 1991). This data was also used in the previous version of this current study (Blincoe et al., 2002). For this current report, data from Blincoe (1996) were carried forward for insurance administration, workplace

costs, legal costs, and congestion while new estimates of source of payment were developed for medical care, lost productivity, and property damage. Blincoe also estimated values for emergency services. However, in that study ambulance costs were included under emergency services, while for this current study, ambulance costs are included under medical care. Ambulance costs had been distributed across

all payer categories in the same proportion as medical care. To adjust for this, the impact of ambulance

costs was removed from the EMS distribution. This results in 100 percent of emergency service costs being born by States and localities (primarily localities). However, we note that over the past few years, primarily in response to budget tightening that has resulted from the economic downturn, many local fire departments and other EMS operators have begun charging insurance companies and in some cases individuals for their services. This practice has become controversial and has been banned in a number of States. Nonetheless, it is likely that some portion of emergency services are in fact now being paid through insurance, and possibly by individuals. It is not certain whether in the long run this practice will become more widespread or will decline due to legislative actions. As this is a relatively recent practice, to date we know of no studies that have examined these impacts on an aggregate basis.

We have also added an additional payer category, "unspecified government," to this study. This category represents programs that are funded primarily by government revenues, but that are lumped together in HCUP data and that therefore cannot be individually identified as belonging to either State or Federal categories. In addition, some of these programs are partially funded by participants through subsidized premium charges. Programs in these categories include Veterans’ Administration, Tricare, Title 5, Indian Health Services, and State and local health care programs. These are programs that cover medical care for service personal and their families, veterans’, Native Americans, and State and local employees. In previous studies, these costs were lumped under the "Other" category. We have categorized them with government programs because they are either entirely supported by, or heavily 236

subsidized by, tax dollars, but some unknown portion of these costs are paid by individual insurance premiums.

Following are discussions of the derivation of revised source of payment estimates for medical care, lost productivity, and property damage.

Miller et al. (2011) provide factors for computing the percentage of crash costs paid by State/local and Federal governments. Table 1, drawn from that paper, is built from the million-record 2007 Healthcare Cost and Utilization Project (HCUP) Nationwide Inpatient Sample (NIS). Medical costs were estimated using hospital charges, as recorded in the NIS, with hospital-specific cost-to-charge ratios supplied by HCUP. The NIS also records the expected payer for each hospital stay, which allowed estimation of the amount paid by payer. Medicaid paid an estimated 15.8 percent of hospital costs for motor vehicle crashes and Medicare paid 7.3 percent.

Zaloshnja and Miller (2012) analyzed Medicaid claims and HCUP data from 14 States. They estimated

that 22 percent of adults ages 19 to 64 with hospital-admitted crash injuries covered by Medicaid (2.85% of all those admitted) became Medicaid-eligible because earnings losses and medical bills resulting from crash injury left them indigent or disabled. The crash resulted in Medicaid paying all their medical bills, not just their injury bill. Zaloshnja and Miller (2012) further estimate that 35 percent of those who convert to Medicaid to pay hospital bills stay on Medicaid indefinitely. The present value of their lifetime Medicaid health care costs averages $316,000 (computed following the article’s methods but

substituting fiscal year 2009 Medicaid spending of $15,840 per disabled recipient from:

www.statehealthfacts.org/comparetable.jsp?ind=183&cat=4.)

Beyond crash medical costs, that adds an estimated $3,152 ($316,000×0.0285×0.35) in Medicaid costs for other care to government’s crash bill per hospital-admitted non-elderly crash survivor. With roughly

5.4 percent of medically treated crash survivors admitted, added government cost due to Medicaid conversion is $170 per injured crash survivor.

The division of Medicaid costs between the Federal and State levels varies by State. On average, States paid 35.2 percent in Fiscal Year 2011 ( Office of the Assistant Secretary for Planning and Evaluation,

2012).

Among the elderly, HCUP data show private insurance paid 50.0 percent of the medical cost of crash injuries but only 7.4 percent of the cost of other injuries. The 42.6 percent differential presumably is due to medical costs borne by or recovered from auto insurers. Assuming this percentage applies to injuries not requiring hospital admission is aggressive. Health insurers are less likely to pursue recovery through subrogation for smaller medical bills. Nevertheless, if we make that assumption, an estimated $14.85 billion in medical costs would be compensated by auto insurance. Since available auto insurance data do not decompose compensation for medical costs versus work losses (or even quality-of-life), we used the

42.6 percent compensation for medical care to compute the compensation level for wage and household work loss. 237

To some extent it is illusory to disaggregate costs across payment categories because ultimately, it is individuals who pay for these costs through insurance premiums, taxes, direct out-of-pocket cost, or higher charges for medical care. A real distinction can be made, however, between costs borne by those directly involved in the crashes and costs that are absorbed by the rest of society. Costs paid out of Federal or State revenues are funded by taxes from the general public. Similarly, costs borne by private insurance companies are funded by insurance premiums paid by policyholders, most of whom are not involved in crashes. Even unpaid charges, which are absorbed by health care providers are ultimately translated into higher costs that are borne by a smaller segment of the general public – users of health care facilities. From this perspective, perhaps the most significant point from Table 14-4 is that society at large picks up over three-quarters of all crash costs that are incurred by individual motor vehicle crash victims.