Author
Kosali Simon thought she had her life’s work figured out. “The first career I can remember wanting to explore as a very young child was being a doctor,” Simon said. In a child’s limited universe of job options, this was how she would build a professional life focused on helping people.
“Then I became queasy at the sight of blood—this was really not the career for me!” After Simon moved from a childhood in Sri Lanka and Zambia to the United States for college, the old interest found a new calling. “I learned in graduate school that people can be part of studying health care in order to improve health in ways that don’t involve actual clinical care,” said Simon. So began the career of a leading U.S. health economist.
Simon’s research explores the many ways modern health care is so much bigger than doctor and patient—from health insurance policy to public health messaging to the pharmaceutical industry. “Everyone knows what doctors do, but you don’t realize how complicated the health care system is,” said Simon, a distinguished professor at Indiana University. “That means there is great need for studying the intricacies of the health care system and how people and organizations respond to incentives.” And from there, “how can we use that background to know what solutions help people?”
Simon’s instinct to help keeps her focused on the opioid crisis, which has morphed over time but remains a major threat to American labor supply and life expectancy. We talked recently with Simon, a member of the Institute’s advisory board, about this ongoing public health crisis that may have faded from the front pages, but not from her research agenda.
This interview occurred over three occasions in late November 2024. It has been edited for length, continuity, and clarity.
How would you characterize the economic cost of the opioid epidemic so far?
The Joint Economic Committee of Congress is a good citation for this—they put the economic cost in 2020 at $1.5 trillion a year. Economists use basic economic tools to think about the counterfactual [if the opioid epidemic had not happened] and how we value all the things that are intangibles, like quality of life. And then you come up with numbers.
One of the things that really impacts the way opioid crisis costs are calculated is the average age of the people who are affected. With Alzheimer’s disease, for example, even though numbers-wise it’s very large, when you think about the years of economic activity that are affected, those are not large because the average age of dementia onset is in the 80s. Of course, there are large economic activity losses for dementia caregivers who exit the labor force early to care for loved ones.
With calculations for the opioid crisis, on the other hand, it’s really affecting lots of people in their prime ages of working and generating taxes for provision of society’s public goods. There’s a lot of impact on family formation, on young kids—all of these ways amplify the economic costs of opioid addiction.
The epidemic has been with us many years now. There’s been a certain exhaustion that set in with the news cycle, but you have kept your focus on it. What would you say is the state of the crisis today?
Overdose rates are still very high. In 2023, for the first time, there was a slight drop in overdose deaths—a 3 percent reduction, although in some states rates continued to climb. Now is a good time to examine which policies could have led to that small but important decline.
It is possible that the reduction was due to supply-side issues in the illicit fentanyl market. But the reduction could also have been due to policies that expanded treatment with methadone and buprenorphine, or increased access to naloxone, which is a medication that reverses overdoses.
People describe four “waves” of the opioid crisis, and we are now in the fourth wave [see sidebar]. But there has been exhaustion, as you said. And how much have we been paying attention to it? In March 2020 we stopped hearing about opioids, as the 24-hour news cycle shifted entirely to the COVID pandemic. I kept thinking at that time, How come the opioid crisis stories disappeared from the news? Was this no longer a problem?
Waves of the opioid epidemic in America
Scholars identify distinct but overlapping phases of opioid-related deaths. One such breakdown:
1999–2017: Abuse of prescription opioids
2010–2019: Heroin-related overdoses
2014–present: Rise of synthetic opioids, including fentanyl
2021–present: High mortality from use of stimulants (methamphetamine and cocaine) in combination with synthetic opioids
Source: Daniel Ciccarone, “The rise of illicit fentanyls, stimulants and the fourth wave of the opioid overdose crisis,” July 2021.
Estimates show that in 2020, some parts of the U.S. lost far more years of potential life to opioid deaths than to COVID-19 deaths. We took our eyes off the opioid crisis in 2020 at the point where it was rapidly becoming worse.
Do we have a good sense by now of what policies work to combat opioid deaths?
States enacted policies making it harder to prescribe opioids for chronic pain. At the same time, doctors became less willing to prescribe these medications once they learned of the addiction risks. So, the number of people initiated onto opioid medications dropped.
That is a good thing. But tragically, many of the people who were already undergoing opioid pain treatment were dropped from treatment, too, without management of addiction. A substantial fraction of those people may have switched to heroin and eventually illicit fentanyl.
[From this it] is clear that we cannot rely on regulating opioid supply alone, because the supply balloon shifts to other sources as we squeeze on one side. Addressing the demand side requires effective treatment-aimed policy. For example, federal policies recently made it easier for clinicians to prescribe buprenorphine. That medication cuts the risk of overdose death by 50 percent among people with opioid addiction. Insurance coverage has expanded, including Medicaid coverage of buprenorphine and Medicare coverage of methadone. Both of those activate opioid receptors in the brain, preventing cravings and withdrawal symptoms, without causing euphoria.
Harm reduction programs have also become more common, like syringe service programs that connect people to treatment and distribute naloxone. Diversion programs, like drug courts, are being expanded, since incarcerating people for addiction-related crimes has not proven effective at preventing relapse and recidivism.
You have been researching how to effectively get people into treatment. From an economic angle, what are we doing well and what can we do better?
Getting providers to be comfortable with prescribing buprenorphine is part of a longstanding challenge in public health. We expect that if there is a potential solution to help people when their lives are in crisis, the health care system would create many ways to connect patients with the solution. But it is surprising how low the access to buprenorphine and other treatments seems to be. Among the prescribers who appear comfortable prescribing buprenorphine, you see very few who have been going up to the limit of the number of patients they are allowed to see.
Stigma has been suggested as a potential cause of under-prescribing of buprenorphine and low referrals to methadone treatment. People with addiction are often unfairly perceived as difficult or dangerous patients. In fact, many clinicians who start treating addiction realize that it is among the most fulfilling activities, because the entire lives of their patients transform. Patients renew relationships with family members, reenter the work force, and leave the justice system.
Medical training may be a solution. There are very few physicians who are addiction-trained specialists. Many clinicians may simply not know how to treat addiction. Until recently it was rarely taught in medical school. Physicians may often feel that this is very specialized care.
Policies enabling addiction treatment by nurse practitioners and physician assistants have helped expand access, particularly in rural areas with few physicians. Telehealth has also changed things, making it easier for people to start and be retained in buprenorphine treatment. The Drug Enforcement Administration recently extended telehealth flexibilities from the COVID-19 era and might make them permanent soon.
When it comes to the economic factors that are driving supply, are you seeing improvement?
Even though it took this much time, there is finally recognition about many of the issues that should have happened 10 or 20 years ago: Access to treatment, harm reduction, the importance of prescribing.
But when the solutions came, it was too little, too late. We began slowing the prescribing of opioids so late into the game—after the demand had already created this illicit market. And the supply from the illicit market took hold in countries and places that it’s just hard to go and address. But that came from the marketing that happened and the prescribing that happened in the legal market. And some people also say we have swung the pendulum too far. We’ve made opioids very difficult to obtain legally, for those with a genuine medical need, and pushed them to the illicit market.
Our challenge now is, how do we even track where the illicit market is? What are the policies that are useful for stopping fentanyl trade? There are just not many papers yet on that. And we continue to write papers on prescription drug monitoring policies.
What does the economic research tell us about treatment versus criminal enforcement?
I think economics is very useful as a framework for this. People point out how difficult the fentanyl trade is to police, that it is coming in in ways that are so hard to detect, and the high amount of investment it would take to really clamp down on supply. For example, a tiny amount of fentanyl—resembling a few grains of salt—is sufficient to cause an overdose death. How can border agents possibly entirely stop a product from entering that is so tiny and easy to hide?
Once fentanyl enters the U.S., many low-level drug dealers are simply selling their drugs to support their own addiction. So, treating the underlying addiction makes a lot of sense. Again, addiction is compulsive engagement in an activity despite negative consequences. Economic tools like taxes, incarceration, and fines that work in standard markets, governed by more rationality assumptions, don’t necessarily work for addiction.
You are a highly prolific author—your Google Scholar page for 2024 is a mile long. You have six children and your husband is also an academic, presumably very busy. Do you have any advice for us mere mortals on how that all is feasible?
Oh no, don’t look to me—I see people doing way more than me!
I think of how mothers’ lives must have been a hundred years ago, or even today for some who are less fortunate. I think about how many people bear a greater burden than we do. And I try to prioritize my energy towards things I can change, and not get frustrated by things I can’t change.
As long as the research, service, and teaching priorities we focus on in academia won’t wear us down, as long as we get strength from whatever we take on, I figure it will be OK. And there is plenty around us to draw inspiration from while we work on improving things we want to change.
So, I don’t have any particular wisdom except to draw strength from people who have figured out, in tougher situations, how to make good.
This article is featured in the Spring 2025 issue of For All, the magazine of the Opportunity & Inclusive Growth Institute
Jeff Horwich is the senior economics writer for the Minneapolis Fed. He has been an economic journalist with public radio, commissioned examiner for the Consumer Financial Protection Bureau, and director of policy and communications for the Minneapolis Public Housing Authority. He received his master’s degree in applied economics from the University of Minnesota.
