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Article Abstract

Online ISSN: 1099-176X    Print ISSN: 1091-4358
The Journal of Mental Health Policy and Economics
Volume 1, Issue 1, 1998. Pages: 23-29

Published Online: 4 Dec 1998

© 1998 John Wiley & Sons, Ltd.

 Research Article
Cost benefits of substance abuse treatment: an overview of results from alcohol and drug abuse
Harold D. Holder, Ph.D. *
Prevention Research Center, Pacific Institute for Research and Evaluation, Berkeley, CA, USA

Background and Methods: The treatment of substance abuse is an important health service available in all industrialized countries throughout the world. Cost of treatment and its benefit or economic value is an important policy issue. Reduction in health care cost is one alternative way to measure benefits. This paper reviews a series of studies (all from the US) which address the cost-benefit question. Most studies have compared the monthly costs prior to initiation of substance abuse treatment with the costs following initiation.
Results from Studies of Alcoholism Treatment: Many studies have found that, over the time prior to alcoholism treatment initiation, total monthly health care costs increased and costs substantially increased during the 6-12 months prior to treatment. Following treatment initiation, monthly total medical care costs declined and the overall trend was downward, i.e., the slope was negative. In contrast to the use of general health care where women typically utilize more medical care than men, overall medical care costs were found to be similar. Alcoholics of different ages, however, showed distinct medical care costs, i.e., younger patients experienced greater declines in medical care costs following alcoholism treatment initiation.
Inpatient treatment is most affected by alcoholism treatment. In some cases, outpatient treatment is actually increased in response to aftercare health care utilization, but at a substantially lower cost than inpatient treatment. If the alcoholism condition can be treated on an outpatient basis, then the total cost of such treatment is obviously lower and the potential for a cost-offset net effect is substantially increased.
Cost Benefits of Drug Abuse Treatment: There have been few drug abuse treatment cost-benefit research studies. Early studies found that there was a decline in sickness and medical care utilization associated with initiation of treatment. A recent study found a substantial reduction in total health care costs following initiation of drug abuse treatment. Utilization of inpatient care and its associated costs are most affected by the absence and/or presence of treatment.
Summary and Conclusion: This review describes the research findings from a number of cost-offset or cost-benefit studies of alcoholism and drug abuse treatment. In broad terms the findings of this research can be summarized as follows.
(i) Untreated alcoholics or drug dependent persons use health care and incur costs at a rate about twice that of their age and gender cohorts. (ii) Once treatment begins, total health care utilization and costs begin to drop, reaching a level that is lower than pre-treatment initiation costs after a two- to four-year period. The conclusion is based on similar findings across different patient populations using a variety of research designs. (iii) There are no apparent gender differences in the utilization and associated costs before and after treatment initiation. (iv) There are age differences that support the value of early intervention. Younger treated substance abuse patients have pre-treatment total cost levels that are lower than pre-treatment levels for older patients.
Implications for Health Policy: The results of research provide consistent support for the cost benefits of substance abuse treatment. From a health policy perspective, such results are promising if the objective is to demonstrate that treatment investment can pay for all or part of its associated costs through reductions in other health care costs. One can hold a contrary position, i.e., lower future medical care costs for substance abusers could reflect denial of essential care.
Implications for Further Research: The studies that have addressed the potential cost offset of substance abuse treatment have been largely based upon overall or aggregate effects across all forms of substance abuse treatment. There have been no studies of the cost offset of specific treatment modalities, though this is what the next generation of studies should do. © 1998 John Wiley & Sons, Ltd.

Received: 24 April 1997; Accepted: 11 December 1997

*Correspondence to Harold D. Holder, Prevention Research Center, Pacific Institute for Research and Evaluation, Berkeley, CA 94704, USA

Funding Agency: National Institute on Alcohol Abuse and Alcoholism; Grant Number: AA06282