The Opioid Epidemic: A Call to Action with Settlement Funds

This post comes from Danielle Chiacco, SSOE and PCGDA Project Manager, and Anna Sommers, Medicare Policy and Data Lead. Representing RELI Group’s Health Information Technology sector, Danielle and Anna recently spoke in a webinar on “Leveraging Practical Tools to Manage Opioid Settlement Funds and Heal Communities.” You can view that webinar here, or read on to learn more about their unique perspectives on battling the opioid epidemic with settlement funds.

The opioid epidemic remains a profound crisis. Despite efforts in legislation, public health campaigns and harm reduction, opioid overdose deaths continue to devastate, with more than 136 Americans dying daily from opioid-related causes, according to the National Center for Drug Abuse Statistics. The human toll is staggering, and the ripple effects of addiction and loss permeate all aspects of society.

In 2021-22, nationwide settlements were reached to resolve opioid litigation brought by states and communities against several large pharmaceutical distributors and manufacturers. State and localities are expected to receive $26 billion in awards, and additional settlements bring the total to more than $50 billion in funds, providing a unique opportunity to address the crisis comprehensively. These funds are intended to support various abatement efforts, including prevention, treatment and recovery services. However, the effective utilization of these funds poses significant challenges and opportunities that must be navigated thoughtfully.

The Complexity of the Opioid Crisis

The complexity of the opioid crisis demands a nuanced, inclusive and equity-based approach to abatement efforts. The crisis is not just about addiction, but also fuels global issues such as human trafficking and the recruitment of child soldiers. The most marginalized populations are disproportionately affected, often left without a voice or adequate resources. To address this multifaceted problem effectively, we must understand the unique historical, socioeconomic and cultural contexts that different communities face, and tailor our interventions accordingly.

Utilizing settlement funds effectively is not merely a logistical challenge; it is also an ethical imperative. The flexibility these funds offer can help fill gaps left by other programs, enabling more comprehensive and targeted interventions. However, this flexibility requires a thorough understanding of existing funding streams and their limitations. Analyzing how these funds can complement other resources and strategically targeting the areas of greatest need are crucial steps in maximizing their impact.

Utilizing Settlement Funds Effectively

Settlement funds offer a unique opportunity to address the opioid crisis with a level of flexibility that other funding streams do not provide. This flexibility allows for filling gaps that other programs may leave unaddressed, enabling more comprehensive and targeted interventions. However, effective use of these funds requires a thorough understanding of existing funding streams and their limitations. One of the biggest challenges with utilizing these funds is determining how to maximize their impact, so states and communities receiving this funding must assess how these settlement funds can complement other resources and strategically target the areas of greatest need.

For instance, states like Minnesota have successfully integrated settlement funds into their existing infrastructure, enhancing their capacity to blend resources and optimize outcomes. States such as Nevada and Wisconsin have conducted statewide needs assessments and stakeholder listening sessions to ensure that their spending is informed by local data and experiences. These approaches illustrate the importance of data-driven decision-making and community engagement in crafting effective abatement strategies. By leveraging local insights and evidence-based practices, states can maximize the impact of settlement funds and drive meaningful change.

An essential first step is to understand where existing federal revenue is already supporting services and assess if those funding streams are being fully leveraged. An important source of revenue is the Medicaid program and its federal matching dollars. Historically, the Centers for Medicare & Medicaid Services (CMS) has not authorized the use of federal Medicaid dollars for services that impact people’s health, yet are not healthcare services. This has changed. CMS has recently begun to authorize the use of federal matching dollars for rent, food and other services or supplies that can address health-related social needs for certain populations, including individuals recovering from addition. Some of the supports authorized under Section 1115 demonstrations include one-time housing transition and moving costs like security deposits; up to six months of short-term post-transition housing; sobering centers; home-delivered meals; and pantry stocking. Though some of these services are limited to individuals at high risk and some of these dollars are capped, they still present opportunities for states to fully leverage federal resources as a first step before utilizing settlement funds.

Opportunities and Challenges

The ambiguity of how to best utilize these funds presents both challenges and opportunities. On one hand, the flexibility of settlement funds allows for innovative and tailored approaches to opioid abatement. For instance, settlement funds could provide predictable, multi-year funding for providers who serve affected communities and operate on shoe-string budgets using state and federal block grants. Multi-year funding could support these providers in long-term planning and retention of experienced staff. Additionally, these funds can be used for brick-and-mortar projects that aren’t typically eligible for federal funding, such as new housing units to support people while in recovery or transition. Creating tuition reimbursement or subsidy programs to encourage more individuals to enter the addiction treatment workforce presents another opportunity for creative use of settlement funds.

On the other hand, the lack of a clear framework can lead to inefficiencies and misallocation. To navigate this complexity, a standardized framework monitoring system can provide a scalable and sustainable approach, ensuring that funds are used effectively and equitably. RELI Group applies simulation modeling as a component of monitoring systems developed for clients which predict data performance and patterns. This feeds into the framework monitoring system as a great data analytic tool for the measurement and evaluation components. RELI’s data analysts use predictive modeling to predict adverse outcomes; this kind of knowledge can be used to identify regional areas where support is needed most, while considering historic and demographic issues. Additionally, machine learning techniques can be used to integrate datasets composed of publicly available information. Predictive modeling can support a funds distribution formula focused on data points such as number of overdose deaths within state/county, opioid disbursement rates per state/county, and prevalence of secondary health issues related to opioid addiction. An effective monitoring system should include six nodes: issue identification, metric development, monitoring, evaluation, recommendations and feedback.

By incorporating predictive modeling and machine learning techniques, states can identify areas where support is most needed and develop data-driven distribution formulas. This approach allows for the integration of diverse datasets, enabling a comprehensive analysis of the factors contributing to the opioid crisis. Predictive modeling can support a funds distribution formula focused on data points such as the number of overdose deaths, opioid disbursement rates, and the prevalence of secondary health issues related to opioid addiction. Such a framework can enhance transparency, accountability, and the overall effectiveness of abatement efforts.

Learning from Past Mistakes

Drawing lessons from the tobacco settlement highlights the necessity for a robust monitoring framework to avoid the misallocation of funds. The $200 billion settlement from the tobacco industry saw less than 10 percent used for tobacco control, with the majority diverted to state debts, road reconstruction and tax reductions. This misallocation underscores the importance of having a clear and accountable framework to guide the use of settlement funds. Fortunately, the opioid settlement funds do come with some “guardrails” that help ensure funds are only spent on opioid abatement efforts, as a result of lessons learned from the tobacco settlement. Despite such guardrails, there’s still quite a bit of flexibility in how the funds can be used. States and counties must prioritize equity-based solutions and comprehensive initiatives that target the most vulnerable populations, ensuring that funds are used to save lives and reduce structural inequalities.

Even within these guardrails, there’s still a risk of misuse of funds – for example, settlement funds could be channeled toward large projects with strong political backing, but with little or no benefit to those harmed by the opioid epidemic. This could happen because the guardrails are vague and there is no enforcement mechanism. To support the funding of evidence-based interventions, the Bloomberg Opioid Overdose Prevention Initiative established Five Guiding Principles to support abatement decisions. Another risk is that funds could be used to underwrite existing state programs so that funds can be returned to state coffers for general use, ultimately leading to no added benefit to communities. Of course, there is always the potential for bad actors to defraud the government or the people who need addiction services. During the COVID-19 pandemic, there were numerous bad actors who defrauded Medicare beneficiaries through scams for free COVID-19 test kits.

Investing in a framework monitoring system can help deter the risks of repeating past mistakes. Such a system would enable more comprehensive initiatives and standards, track changing needs, and ensure that the most marginalized populations receive the assistance they need. By surveying state and county needs, engaging diverse stakeholders, and supporting community engagement campaigns, we can build a monitoring system that is risk-averse and impactful. This approach would optimize targeting strategies, promote fiscal stewardship, and drive equity-based solutions that have the potential to transform lives. Fortunately, many states are already collecting opioid treatment data that can inform their decisions. They just need to leverage it.

Creating Accountability

Accountability in the use of settlement funds revolves around effective reporting practices, standardization of reporting mechanisms, and the integration of equity-based standards. Reporting practices should promote an informed demand for effective policies and interventions, ensuring that the funds are used in ways that genuinely address the opioid crisis. Historically, national policies to curb drug misuse and addiction have often failed, impacting low-income communities, communities of color and rural areas disproportionately. Information must be factual and accessible to social workers, healthcare workers, educators and public officials to drive meaningful change.

Standardizing reporting mechanisms can focus on evidence-based prevention services and early intervention strategies, potentially altering the trajectory of the crisis. The creation and maintenance of state prevention offices can support organic empowerment initiatives tailored to state-specific needs. Additionally, states should consider monetary incentives for effective reporting protocols to strengthen preventive social services and community organizations. By ensuring periodic reviews of reporting tools, resource capacity and user experience, states can continually improve their approaches and ensure that funds are used effectively.

Enhanced training, comprehensive treatment options and robust reporting technology are crucial for evolving needs and ensuring long-term success. An accountable framework should be robust enough to evolve with the needs and advances of states and counties. Recognizing that many states operate within fundamentally inadequate and under-resourced systems should drive the push for multifaceted, integrative approaches. By fostering a culture of transparency, collaboration and data-driven policies, we can optimize the use of settlement funds, focusing on good fiscal stewardship and saving lives. Engaging diverse stakeholders and supporting community engagement campaigns will further ensure that abatement efforts are impactful and equitable.

The opioid crisis is a deeply entrenched issue that demands a multifaceted and compassionate approach. Utilizing settlement funds effectively is not just a financial challenge but a moral imperative. We must prioritize the most vulnerable populations, leveraging data-driven strategies and community insights to drive our efforts. By establishing a robust framework for monitoring and accountability, we can ensure that these funds are used to their fullest potential, addressing the root causes of the crisis and providing much-needed support to those affected. This is an opportunity to learn from past mistakes and create a future where the devastating impact of opioids is significantly reduced. Together, through collaborative efforts and a commitment to equity and transparency, we can make meaningful strides in combating this epidemic and fostering healthier, more resilient communities. The journey ahead is complex, but with strategic planning, dedicated resources and a collective will, we can turn the tide on the opioid crisis and save countless lives.

Resources on Opioid Abatement Strategies

Fortunately, organizations with demonstrated expertise in the areas of opioid addiction and evidence-based treatment have stepped forward to offer their expertise and guidance. RELI Group encourages the leadership of state and county governments, communities and community members affected by the opioid epidemic to access these resources in support of data-driven decision-making.