Cost effectiveness of substance-abuse treatment in casino hotels

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Date: Feb. 1992
Publisher: Sage Publications, Inc.
Document Type: Article
Length: 6,626 words

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An employer's investment in substance-abuse treatment programs for employees can be paid for in part by the savings gained by retaining successfully treated workers and increasing their productivity

ONE OF TODAY'S business realities is the prevalence of employee substance abuse - a particularly acute problem for the hospitality industry. Merely getting rid of substance-abusing employees is, at best, a cosmetic solution. Faced with labor shortages, growing "wrongful termination" litigation, and legislative mandates that promote a drug-free workplace and prohibit employee discrimination of recovering substance abusers, employers are investing in employee-assistance programs (EAPs) that provide substance-abuse treatment and permit the employer to retain an otherwise productive employee. Like any investment, a cost-benefit analysis such as that described in this article can provide a framework for evaluating the relative advantages of various types of EAPs.(1)

Among the more tangible benefits of treating substance-abusing employees is reduced turnover and absenteeism: expensive problems that otherwise might go unchecked. As a way of presenting our cost-benefit analysis, we compare the EAPs at two casino hotels which have quite different substance-abuse programs: the Mirage, in Las Vegas, and Merv Griffin's Resorts International Hotel-Casino, in Atlantic City. In this article, we focus only on the programs' effects on absenteeism and turnover, recognizing full well that there are many other benefits, both tangible and intangible, that accrue when employee substance-abuse problems are addressed by managers.

Substance Abuse in

the Workplace

A 1990 Gallop survey conducted for the Institute for a Drug Free Workplace revealed that 22 percent of employees nationwide believed that illegal drug use was at least "somewhat widespread" in their workplace, while 49 percent said that illegal drug use "occurs" in the workplace. Moreover, 32 percent of the respondents indicated that the selling of drugs also took place at work.(2) Drugs in the workplace pose significant problems for the employer. A survey conducted by the National Council on Alcoholism revealed that between 15 and 20 percent of restaurant employees use illicit drugs and alcohol while on the job (Exhibit 1).

Substance abuse and restaurant employees

In a restaurant environment, substance abuse costs the operation $7,500 per abusing employee through internal theft, lost productivity, absenteeism, and on-the-job injury. Furthermore, a study of food-service workers found that restaurant employees who also are on-the-job substance abusers:

* Are 3 times more likely to be late for work than non-using employees; * Have an absenteeism rate 16 times higher than the national norm and

have 3.5 absences of eight days or longer; * Are 2.2 times more likely to request time off; * Are 6 times more likely to use medical benefits or unemployment

insurance; * Are 3.6 times more likely to be injured on the job; and * Work approximately 25 percent less efficiently than non-using


Furthermore, according to data gathered by the drug-use forecasting program of the National Institute of Justice, as many as 67 percent of males and 86 percent of females who were arrested and who had full- or part-time jobs tested positive for at least...

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Gale Document Number: GALE|A12073629