Cash Assistance and Monthly Cycles in Substance Abuse

Carlos Dobkin (UC Santa Cruz)

and

Steve Puller (Texas A&M)

Figure 1: Drug Related Hospital Admissions (California 1994-2000)

0

5,000

10,000

15,000

20,000

25,000

30,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Day of Month

Adm

issi

ons

with

a m

entio

n of

Alc

ohol

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Adm

issi

ons

with

a m

entio

n of

Coc

aine

, Her

oin

or

Am

phet

amin

e

Alcohol

Cocaine, Heroin or Amphetamine

Politicians Have Championed Various Changes in Cash Aid

• 1994 legislation on SSI & SSDI– 3 year limit on benefits for addictive disorders– “representative payee” system

• Welfare Reform in 1996 – Ended SSI benefits for people categorized as disabled

due to substance abuse– Gramm Amendment 1996 – lifetime ban on food

stamps and TANF aid to drug offenders• Proposition N (San Francisco) 2002 – “Care Not

Cash”– Converts General Relief in San Francisco from cash to

in kind aid

Literature on Cycles in Drug Consumption

• Monthly pattern in deaths (Phillips 1999)– 14% more substance abuse deaths in first vs. last week

of month

• Monthly pattern in psychiatric admissions (Halpern & Mechem 2001)– Psychiatric admissions for substance abuse 14% higher

first week (vs. 6% for non-substance abuse)

• Cocaine use among disabled vets (Shaner 1995)– 105 male vets on disability with history of

schizophrenia & cocaine use

– Highest cocaine concentration in body during first 3 days of month

Contributions of This Paper

1) Document the monthly cycle in hospital admissions by substance

2) Determine which government programs are driving the monthly cycle in admissions

3) Assess whether alternate disbursal regimes can smooth the monthly cycle

4) Test if cash aid affects the level of admissions or just the timing of admissions

Data

• California Hospital Discharge Data 1994-2000– Census of hospitalizations

– Includes patient demographics, cause of hospitalization (ICD-9 codes) and treatment provided

• Medi-Cal Eligibility Data 1994-2000– Linked to hospital data

– Includes eligibility for welfare and Supplemental Security Income (SSI) for Aged, Blind, or Disabled

– Does not include General Relief

– Proxy for Social Security Disability Insurance (DI)

Figure 2: Monthly Cycle in Drug Related Hospital Admissions by Drug Type (California 1994-2000)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Day of Admission

Her

oin

an

d C

oca

ine

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Am

pht

am

ine

Cocaine

Heroin

Amphetamine

Cycle by Type of Drug

Figure 3: Percent of Patients Leaving Hospital Where the Original Admission Had a Drug Mention

8.00%

8.50%

9.00%

9.50%

10.00%

10.50%

11.00%

11.50%

12.00%

12.50%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Discharge

Pe

rce

nt L

ea

vin

g o

n D

ay

Opioid

Amphetamine

Cocaine

Hospital Exit Rates for Drug Admits

Possible Causes of the Cycle• Monthly Paychecks• Supplemental Security Income (SSI/SSP)

– For low income aged, blind or disabled – 5 month waiting period for disabled– Approximately 1 Million recipients state-wide, two-thirds disabled– Benefits average about $600/month for individuals ($1100/month couples)– Checks arrive on the 1st (or last previous business day if on weekend)

• Social Security Disability Insurance (DI)– Replacement rate varies with income– Eligible for Medicare after 2 years– Aid arrives 3rd of month

• Welfare – Largest of the programs with 2 million recipients statewide– Benefits about $550/month in 1997– Checks typically arrive on the first but there is a little variation by county

• General Relief– County program for indigent adults (varies by county typically ~ $250 per month)

• Unemployment Insurance – Paid bi-weekly

• Workers’ Compensation– Some benefits paid bi-weekly

• Supply side factors?

Employees PercentWeekly 905,562 0.21Biweekly 2,409,063 0.56Semimonthly (Typically 1st and 15th) 720,142 0.17Monthly 252,101 0.06Other 7,704 0.00Total 4,294,572

Note: Based on an American Payroll Association Survey of 872 companies

Table 4: Timing of Pay Checks

Monthly Paychecks?

Alcohol Cocaine Herion AmphetamineCounts of Admissions

Welfare 18,476 11,783 9,112 15,233 SSI Aged 10,824 186 837 53 SSI Blind 1,792 409 449 176

SSI Disabled 147,415 44,084 49,284 22,969 Other 592,267 100,185 120,899 78,437

Admissions Per Month per 10K Enrollees Welfare 0.98 0.63 0.48 0.81 SSI Aged 3.81 0.07 0.29 0.02 SSI Blind 8.49 1.94 2.13 0.83

SSI Disabled 24.79 7.41 8.29 3.86

Table 3: Hospital Admissions 1994-2000 by Drug and Program

Drug Admissions By Aid Program

Figure 4: Hospital Admissions With a Mention of Cocaine, Heroin or Amphetamine by Program

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Day of Admission

SS

I and

Wel

fare

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Non

Wel

fare

non

SS

I

Welfare

SSI

Not on SSI or Welfare

Monthly Drug Cycle for Welfare, SSI

Figure 5: Hospital Admissions by Insurance Type for Cocaine, Heroin and Amphetamine for People Receiving Neither Welfare nor SSI

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Day of Admission

Pri

vate

Insu

ran

ce

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Se

lf P

ay,

Co

un

ty In

dig

en

t, M

ed

i-C

al a

nd

Me

dic

are

Private

Self Pay

County Indigent

Medi-Cal

Medicare

Monthly Drug Cycle for Non-Welfare, Non-SSI

Exit Rates for Welfare, SSI Drug AdmitsFigure 8: Proportion of Patients With Cocaine, Heroin or Amphetamine Admission Leaving the Hospital

For Home

0

0.05

0.1

0.15

0.2

0.25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Discharge

Pro

port

ion

of W

elfa

re P

atie

nts

Exi

ting

Hos

pita

l

0

0.02

0.04

0.06

0.08

0.1

0.12

Pro

port

ion

of S

SI

and

Non

Wel

fare

Non

SS

I A

dmis

sion

E

xitin

g H

ospi

tal

Welfare

SSI

Not on SSI or Welfare

Figure 10: Proportion of Patients With Cocaine, Heroin or Amphetamine Admission Leaving the Hospital Against Medical Advice

0

0.005

0.01

0.015

0.02

0.025

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Discharge

Pro

port

ion

of P

atie

nts

Exi

ting

Hos

pita

l Aga

inst

Med

ical

Adv

ice

SSI

Welfare

Not on SSI or Welfare

“Against Medical Advice” Exit Rates for Welfare, SSI Drug Admits

Summary of Cycles by Programs

• Welfare – only weak cycle• SSI – very strong cycle • DI – indirect evidence of a cycle The overall cycle appears to be due largely to

SSI and DI

• Exit patterns (particularly AMA) consistent with patients going home to pick up their checks

Can Alternative Disbursement Schemes Reduce the Cycle?

• Peaks in drug consumption costly– Stress fixed resources at Emergency Rooms– Hospital admissions may be indicator for other drug-

related activity (e.g. crime, policing)

• Alternative disbursement regimes1. Stagger the day on which recipients receives monthly

aid2. Disburse individual’s aide more frequently in smaller

batches– Low cost due to states switching to electronic benefit

transfer

Empirical Evidence on Alternative Disbursement Regimes

• Los Angeles County disbursement of welfare– Pre June 1997: Day 1– Post June 1997: Staggered Days 1-10 based on case

number (recipients could pick up at issuance outlet after designated day)

– Effect: • Individuals still have “fat wallets”, but everybody doesn’t

have them at the same time

• Question– Does aggregate cycle change?– Keep in mind

• Welfare recipients show relatively small cycle• Welfare reform may create other changes pre and post

Figure 12: Admissions with Drug Mention for Welfare Recipients in Los Angeles County Pre vs Post Shift from Day 1 to Days 1-10 Disbursement

1.23

1.73

2.23

2.73

3.23

3.73

4.23

4.73

5.23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Month

Mea

n A

dmis

sion

s D

ay 1

0

0.5

1

1.5

2

2.5

3

3.5

4

Mea

n A

dmis

sion

s D

ays

1-10

Day 1

Days 1-10

Poly. (Day 1)

Poly. (Days 1-10)

LA County Drug Admits for Welfare

Figure 14: Admissions with No Drug Mention for Welfare Recipients in Los Angeles County Pre vs Post Shift from Day 1 to Days 1-10 Disbursement

1.49

3.49

5.49

7.49

9.49

11.49

13.49

15.49

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Month

Me

an

Ad

mis

sio

ns

Da

y 1

0

2

4

6

8

10

12

14

Me

an

Ad

mis

sio

ns

Da

ys 1

-10

Day 1

Days 1-10

Poly. (Day 1)

Poly. (Days 1-10)

LA County Non-drug Admits for Welfare

“Regression Adjusted” Cycle

A d m its D ay o fM o n th D u m , D ay o fM o n th D u m * P reJu n e9 7 , D ay o fW eek D u m

M o n th D u m , Y earD u m H o lid ay D u mt t t t

t t t

f

t

( ,

, , )

D ay o f M o n th D u m m ies = { D ay 1 , D ay 2 - 9 , D ay 1 0 - 1 7 , D ay 1 8 - 2 5 , D ay 2 6 - 3 1 }

H o lid ay D u m m ies = { N ew Y ears , Ju ly 4 , T h x g iv in g , X m as, F u llM o o n }

PostDay

PostDay

eDay

eDay

oH92

1710Pr

92

Pr1710:

Model:

Coef Std err Coef Std err Coef Std err

Day1 2.53 (0.32)** 1.06 (0.25)** 6.96 (0.62)**Day2-9 2.86 (0.30)** 1.25 (0.24)** 7.29 (0.57)**Day10-17 3.14 (0.30)** 1.31 (0.24)** 7.57 (0.57)**Day18-25 2.70 (0.29)** 1.12 (0.24)** 7.53 (0.57)**Day26-31 2.55 (0.30)** 1.34 (0.25)** 7.39 (0.59)**Pre97*Day2-9 0.49 (0.25)* 0.25 (0.20) 0.69 (0.45)Pre97*Day10-17 -0.14 (0.24) 0.14 (0.20) 0.28 (0.45)Pre97*Day18-25 0.39 (0.23) 0.45 (0.20)* -0.12 (0.45)Pre97*Day26-31 0.23 (0.26) 0.08 (0.21) 0.04 (0.50)Estimated Coefficient of Day10-17 / Day2-9

Before 0.90 0.97 0.98After 1.10 1.05 1.04

Pvalue for Test of Equality 0.01 0.54 0.3

Observations 2191 2191 2191R-squared 0.78 0.69 0.91

Table 5: Welfare Recipients in Los Angeles County Pre and Post Change from Day 1 to Day 1-10 Disbursement

Notes: All admissions for 1994-1999 by recipients of welfare (AFDC/TANF) in Los Angeles county. Dummy variables for holidays are equal to 1 for the holiday and the following day. Model is estimated by least squares with White standard errors (* significant at 5%; ** significant at 1%). Dependent Variable: Daily count of admissions as a primary or secondary diagnosis. regression include month dummies, year dummies.

Drug Mentions Alcohol Mentions Non-drug Other Conditions

Simulated Effect on Aggregate Drug Cycle of Disbursing SSI, SSDI and Welfare with a Day1-10 Scheme

• Assume– Cycles for certain subpopulations entirely driven by timing

of aide disbursement– Consumption pattern independent across groups (no

“agglomeration economies” to consumption)– No supply side response to change in timing of demand

• Simulate Aggregate cycle– Take observed cycle (from single day disbursement) &

simulate the cycle if• 1/10th of recipients = day 1, 1/10th=day 2, …, 1/10th = day 10

– SSI: from Day 1 to Days 1-10– SSDI (proxied by Medicare): from Day 3 to Days 1-10– Welfare outside LA post 97: Day 1 to Days 1-10– Welfare in LA post 97: keep the same observed cycle– All others (employed, UI, others) keep the same

Figure 15: Simulated Monthly Drug Cycle When SSI, SSDI, and Welfare Are Disbursed Days 1-10

0

50

100

150

200

250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Month

Dru

g A

dmis

sion

s

Actual

Day 1-10 For SSI, SSDI, Welfare

Do the Programs Increase Drug Use?

• Anecdotal evidence of a drug cycle from clinicians is taken to suggest that aid increases level of drug use

• Problem with simple comparisons: unobserved determinants of drug use correlated with cash aid eligibility

• Approach: focus on “SSI transitioners”– 5 month waiting period

– Analyze 1 month window around eligibility

– Our data has about 2500 admissions for patients transitioning from other Medi-Cal to SSI

• Large increase in cash aide

• No systematic difference in unobservables (hopefully)

Drug Cycle – SSI Transitioners1 Month Window

0.00

0.10

0.20

0.30

0.40

0.50

0.60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Month

Mea

n A

dm

issi

on

s

Just Transitioned On

Mean - Just On

About To Transition On

Mean - About To Go On

Conclusions

• Monthly cycles in admissions and exits is evidence that aid disbursement affects timing of drug consumption– “fat wallets” aggravate impulse control problems

• SSI and SSDI are primary contributors to cycle– Targeted changes in disbursement can smooth

– Staggered vs. individual smoothing

– Appears it should be low cost intervention

• (Limited) evidence that aid affects timing but not levels

All Admission Alcohol Cocaine Amphetamines HeroinER admission 42.21% 61.66% 50.84% 45.03% 53.35%Length of Stay (first admission) 4.46 6.24 6.75 6.18 6.75Age of Patient 50.69 47.83 37.31 32.50 41.25Insurance Medicare 33.27% 26.76% 16.83% 12.44% 17.42% HMO 22.30% 16.80% 11.03% 14.72% 10.99% Medi-Cal 20.24% 18.51% 29.00% 30.48% 27.37% PPO 10.31% 7.92% 5.04% 6.58% 6.98% Private 4.90% 5.51% 5.43% 6.19% 4.04%Injury due to external causes 10.98% 18.13% 14.01% 15.18% 13.13%Cash Aid Welfare 9.07% 4.08% 7.96% 13.42% 5.78% SSI Disability 9.26% 19.12% 28.13% 19.64% 27.28%Hospital Charges $17,244 $18,123 $13,790 $13,568 $15,924Died first admission 2.26% 2.92% 1.07% 0.86% 1.70%Total admissions 18,484,469 773,279 157,150 117,158 181,106

Table 1: Demographics by Type of Drug Mentioned on Admission Record

Notes: records are included in the tables above if the drug is the primary cause of admission or if it is included as one of the other ICD-9 CM codes.

Summary Statistics

Alcohol Cocaine Amphetamine HeroinCause of Admission Deliberate Injury 0.041 0.049 0.050 0.025 Accident 0.073 0.026 0.035 0.026 Drug Dependence 0.497 0.362 0.300 0.576 Drug Psychosis 0.194 0.158 0.139 0.222 Other Cause 0.196 0.405 0.475 0.151

Table 2: Causes of Admission by Drug

Causes of Admission

Figure 6: Hospital Admissions With a Mention of Alcohol by Program

0

1,000

2,000

3,000

4,000

5,000

6,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Day of Admission

SS

I and

Wel

fare

0

5,000

10,000

15,000

20,000

25,000

Non

Wel

fare

non

SS

I

Welfare

SSI

Not on SSI or Welfare

Monthly Alcohol Cycle for Welfare, SSI

Figure 7: Hospital Admissions by Insurance Type With a Mention of Alcohol for People Receiving Neither Welfare nor SSI

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Day of Admission

Sef

l Pay

, Med

icar

e, P

rivat

e

0

500

1,000

1,500

2,000

2,500

Med

i-Cal

, Cou

nty

Indi

gent

Private

Self Pay

Medicare

County Indigent

Medi-Cal

Monthly Alcohol Cycle for Non-Welfare, Non-SSI

Figure 9: Proportion of Patients Not Receiving Welfare or SSI With Cocaine, Heroin or Amphetamine Admission Leaving the Hospital For Home

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Discharge

Pro

port

ion

of P

atie

nts

Exi

ting

Hos

pita

l

Medicare

Medi-Cal

Self Pay

Private

County Indigent

Exit Rates for non-Welfare, non-SSI Drug Admits

Figure 16: Counts of Recipients of SSI and Welfare

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1992

-10

1993

-04

1993

-10

1994

-04

1994

-10

1995

-04

1995

-10

1996

-04

1996

-10

1997

-04

1997

-10

1998

-04

1998

-10

1999

-04

1999

-10

2000

-04

2000

-10

2001

-04

2001

-10

2002

-04

2002

-10

2003

-04

2003

-10

2004

-04

2004

-10

Month

SS

I Age

d, B

lind

and

Dis

able

d

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Wel

fare

SSI Aged

SSI Blind

SSI Disability

Welfare

Figure 17: Drug Related Admissions

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan-

94

Mar

-94

May

-94

Jul-9

4

Sep-9

4

Nov-9

4

Jan-

95

Mar

-95

May

-95

Jul-9

5

Sep-9

5

Nov-9

5

Jan-

96

Mar

-96

May

-96

Jul-9

6

Sep-9

6

Nov-9

6

Jan-

97

Mar

-97

May

-97

Jul-9

7

Sep-9

7

Nov-9

7

Jan-

98

Mar

-98

May

-98

Jul-9

8

Sep-9

8

Nov-9

8

Jan-

99

Mar

-99

May

-99

Jul-9

9

Sep-9

9

Nov-9

9

Jan-

00

Mar

-00

May

-00

Jul-0

0

Sep-0

0

Nov-0

0

Month of Admission

Tot

al A

dmis

sion

s pe

r M

onth

0

100

200

300

400

500

600

700

800

Wel

fare

Adm

issi

ons

Per

Mon

th

Total Admissions

Non Welfare Recipients

Welfare Recipients

Figure 18: Alcohol Related Admissions

0

2,000

4,000

6,000

8,000

10,000

12,000

Jan-

94

Mar

-94

May

-94

Jul-9

4

Sep-9

4

Nov-9

4

Jan-

95

Mar

-95

May

-95

Jul-9

5

Sep-9

5

Nov-9

5

Jan-

96

Mar

-96

May

-96

Jul-9

6

Sep-9

6

Nov-9

6

Jan-

97

Mar

-97

May

-97

Jul-9

7

Sep-9

7

Nov-9

7

Jan-

98

Mar

-98

May

-98

Jul-9

8

Sep-9

8

Nov-9

8

Jan-

99

Mar

-99

May

-99

Jul-9

9

Sep-9

9

Nov-9

9

Jan-

00

Mar

-00

May

-00

Jul-0

0

Sep-0

0

Nov-0

0

Month of Admission

Tot

al A

dmis

sion

s pe

r M

onth

0

50

100

150

200

250

300

350

Wel

fare

Adm

issi

ons

Per

Mon

th

Total Admissions

Non Welfare Recipients

Welfare Recipients

Basic Demographics of CA in 1996

Source: Urban Institute, 1998

Figure 11: Proportion of Patients Not Receiving Welfare or SSI With Cocaine, Heroin or Amphetamine Admission Leaving the Hospital For Home Against Medical Advice

0

0.005

0.01

0.015

0.02

0.025

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Discharge

Pro

port

ion

of P

atie

nts

Exi

ting

Hos

pita

l Aga

inst

Med

ical

Adv

ice

Medicare

Medi-Cal

Self Pay

Private

County Indigent

AMA Exit Rates for non-Welfare, non-SSI Drug Admits

Figure 13: Admissions with Alcohol Mention Welfare Recipients in Los Angeles County Pre vs Post Shift from Day 1 to Days 1-10 Disbursement

0.41

0.91

1.41

1.91

2.41

2.91

3.41

3.91

4.41

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Day of Month

Mea

n A

dmis

sio

ns D

ay

1

0

0.5

1

1.5

2

2.5

3

3.5

4

Mea

n A

dmis

sio

ns D

ays

1-1

0

Day 1

Days 1-10

Poly. (Day 1)

Poly. (Days 1-10)

LA County Alcohol Admits for Welfare

Causes of Monthly Drug Cycles Are Unknown

• “Fat wallets” early in the month could have a number of causes– Monthly pay checks (but not bi-weekly)– Federal transfers (SSI, SSDI)– State transfers (AFDC/TANF, Food Stamps, UI)– Local transfers (General Relief)

• Specific early month holidays?– New Year’s or July 4th

• Supply side causes?