Cost Effectiveness and Cost Benefit Analysis of Substance Abuse Treatment: Literature Review and Ann

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Cost Effectiveness and Cost Benefit Analysis of
Substance Abuse TreatmentLiterature Review and
Annotated Bibliography

• Presented by Henrick Harwood, The Lewin Group
• Prepared For the Center for Substance Abuse
  Treatment
• Document available at
• http//neds.calib.com/products/pdfs/litrvw/cost_li
  t_review/index.cfm

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Major Conclusions

• Treatment is effective!
• Treatment pays for itself!
• Some treatment approaches are more cost effective
  . . .

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Major Progress in Substance Abuse Treatment

• Quality of research better
• Continuum of care
• Patient placement criteria operationalized
• Need for composition of comprehensive services
  better understood
• Some Guidelines and Manuals published
• ASAM
• also AACAP NIH CSAT CSAT grantees

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Purpose

• The goals of the literature review and
  bibliography were to
• Develop a comprehensive list of the literature
  available
• Identify trends in the literature in terms of
  topics studied and areas in need of work
• Broadly characterize and summarize findings and
  conclusions of cost effectiveness and cost
  benefit studies.

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Citations by Type of Study

• The largest number of studies have been cost
  benefit studies (49).
• There have been fewer studies with a primary
  focus on cost effectiveness (29) or cost of
  treatment (20).

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Perspectives of Economic Analysis

• Is some/any treatment better than no treatment?
• Are some types of treatment more economical than
  others?
• What makes treatment more cost effective?
• Treatment and Distinct Client Populations
• Females
• Adolescents
• Co-Occurring Mental Illness and Substance Abuse
• Prisoners/Offenders
• Opiate Substitution Therapy

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Conclusions

• Cost benefit studies
• Recent cost benefit studies consistently find
  that benefits (i.e., improvements in crime,
  health, and social functioning) are greater than
  the costs of substance abuse treatment.
• Cost benefit studies examining benefits in terms
  of reduced health care utilization and costs
  (cost offsets) find that health costs and
  utilization sharply increase prior to treatment
  initiation, then fall dramatically following the
  treatment period.
• Cost effectiveness studies
• A handful of cost effectiveness studies conclude
  that less expensive treatment modalities or
  levels of care are more cost effective or cost
  beneficial than more expensive approaches.

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Comprehensive Cost-Offset StudiesFind Major
Returns per Dollar Spent on Treatment

• French et al. (2000)
• 10 and 23, in two Washington State clinics.
• Gerstein, Harwood, and Suter (1994)
• 7 in the California public system
• Finigan (1995)
• 7 in the Oregon public system
• Koenig, Harwood, Sullivan, and Sen (2000b)
• 4 in federally-funded programs

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Health Costs of Substance Abusing Populations
are Higher than non-Abusers

• Studies of insured populations compare those
  treated for alcohol and drug abuse with
  non-abusing populations.
• Those getting treatment have total health costs
  several times higher than the non-abusing
  population before treatment initiation.
• Holder and Hallan (1986)
• Tracked abusing and non-abusing populations for
  up to 4 years and found that health costs were
  nearly identical at the end of that period.
• Goodman et al. (2000)
• Found a reduction of the gap in costs between
  comparable treated and non-abusing populations
  over time.
• Found cost offsets for treatment of alcohol
  abuse but probably not for dependence or
  those with mental comorbidities

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Health Expenditures Decline Following Substance
Abuse Treatment

• Analyze changes in health care utilization and
  costs before and after treatment cost offsets
  
• Holder and Blose (1992)
• health care costs declined by 23 to 55 from
  their highest pretreatment levels
• Holder Schachtman (1987)
• offsets made up for the cost of the treatment
  within 2 years

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Cost-Offsets for Treated versus Untreated
Substance Abusers

• Reiff, Griffiths, Forsythe, and Sherman (1981)
  HMO
• treated population had about 500 per year lower
  post-referral insured health costs treatment
  refusers
• Holder and Blose (1992) privately insured
• after treatment treated alcoholics had 24 percent
  lower health costs than similar untreated
  alcoholics. Tracked 3 years.
• Gerson et al., (2001) Ohio Medicaid
• treated substance abusers had annual insured
  health costs of about 500 less than diagnosed
  but untreated individuals.

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Some Types of Treatment Are More Cost-Effective
than Others (for Some Clients)

• Hospital inpatient treatment versus intensive
  outpatient (IOP)
• Alterman et al., 1994 Bachman et al., 1992
  Longabaugh et al., 1983 Schneider, Mittelmeier,
  Gadish, 1996)
• No significant difference in outcomes. Various
  client populations male and coed adults cocaine
  addicts, poly substance abusers and alcoholics.
  
• Day treatment costs about half (or less) as much
  as inpatient care of same duration
• Day treatment and intensive outpatient compared
  to less intensive regimens
• Weisner et al., 2000 step-down day treatment
  to IOP versus IOP alone for a poly substance
  population no differences in outcomes costs
  almost twice as much (about 1650 versus 900)
• Avants et al. (1999) for a medically indigent
  methadone population day treatment was no more
  effective than enhanced standard care the more
  intensive treatment cost about twice the less
  intensive care

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Longer Treatment Yields Better Outcomes

• Harwood, Hubbard, Collins, and Rachal (1988)
• An additional day of treatment retention reduced
  crime-related costs during and in the year
  following treatment by 2 to 4 times the cost of
  the day of care.
• French, Zarkin, Hubbard, and Rachal (1991), and
  French and Zarkin (1992)
• Increased stay in treatment associated with
  significant increases in earnings decreases in
  illegal earnings, But much less than the cost of
  the care.
• Koenig et al. (2000b)
• Post-treatment benefits only partially offset
  costs of an additional day of treatment.
• Barnett Swindle (1997)
• VA inpatient 28 day programs had modestly higher
  outcomes than 21 day programs (78 percent success
  versus 75 percent)
• Improvement judged too small to warrant
  operating 28 day programs since the costs are
  materially higher.

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Strong Benefits from Treating Women

• Harwood, Fountain, Carothers, Gerstein, and
  Johnson (1998)
• Benefits about four times greater than the cost
  of treatment
• Svikis et al. (1997)
• Successfully treated versus untreated pregnant
  women
• Treatment cost 6,600 (day treatment)
• Average NICU costs/ birth 900 for treated women
  vs 12,200 for untreated
• Daley et al. (2000, 2001)
• Pregnant women economic returns from birth
  outcomes and criminal activity
• Residential and combined residential-outpatient
  treatment most cost effective, better than
  standard outpatient, methadone and detoxification
• Berkowitz, Brindis, Clayson, and Peterson (1996)
• Mandating pregnant and parenting offenders into
  treatment saved about 3,000 vs. the nearly
  17,000 in expense to incarcerate (and treat them
  in prison) for six months

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Adolescents Benefit From Intensive Services

• Schoenwald, Ward, Hennggeler, Pickrel, and Patel
  (1996)
• Compared multisystemic therapy (MST, an
  intensive mix of substance abuse, mental health
  and social services) with usual services for
  adolescents
• MST reduced arrests by 26 and time
  incarcerated by 46
• Costs for therapeutic services increased 50
  over usual services
• The reduction in incarceration from MST offset
  the increase in costs

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Marital Therapy is Cost Effective, Some
Approaches More So than Others

• Fals-Stewart, OFarrell, and Birchler (1997)
• combining behavioral couples therapy with
  individual counseling more effective than
  individual based treatment alone
• no more costly
• OFarrell, Choquette, Cutter, Floyd et al.
  (1996)
• behavioral marital therapy superior to
  interactional couples therapy
• BMT was also less expensive

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Treatment for Offenders Pays for Itself

• Hughey and Klemke (1996)
• Offenders completing in-jail program (85) had
  lower rates of re-arrest compared to similar
  untreated inmates.
• Savings after treatment costs were
  3,500/offender.
• Further (but unestimated) benefits from reduced
  victim, police and court costs.
• Maddox (1996)
• Based on lit review of drug courts judged
  cost-effective
• 5,000 in incarceration costs compared to
  treatments costs of 900 to 1,600 per defendant.
  
• Recidivism rates and drug use post-treatment are
  also reduced.

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Co-Occurring Substance Abuse and Mental Illness

• Jerrell and Hu (1996)
• supportive, low intensity mental health plus
  substance abuse treatment 12 step and case
  management models
• cost savings of over 40 during the
  post-treatment period
• French, Sacks, DeLeon, McKendrick, Staines,
  (1999)
• Mentally ill homeless substance abusers in
  modified TC group experienced significantly lower
  levels of alcohol intoxication, criminality, and
  depression than those in the treatment-as-usual
  group, and
• Incurred a lower cost of health treatment, offset
  costs for TC services

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Opiate Substitution Therapy

• Kraft, Rothbard, Hadley, McLellan, and Asch
  (1997)
• Low, medium and high levels of counseling and
  support services
• Medium level was most cost effective, but high
  had modestly better results
• Barnett (1999)
• One additional life year is saved for each 5,900
  spent on methadone treatment Compares very
  favorably with results for other health
  interventions
• Zaric et al. (2000)
• Using methadone to reduce HIV transmission yields
  an additional 1 year of quality adjusted life at
  a cost of 8,200
• Most of the benefits are with the non-injection
  drug using population.
• Barnett, Zaric, and Brandeau (2001)
• Buprenorphine for opiate addiction is cost
  effective at a price of up to 30 per dose if
  applied to clients that would not use methadone
• However, methadone is the treatment of choice
  for clients that will accept it

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