A commenter, Eric Goplreud, dropped a literature review in a comment. I routinely delete comments longer than a few inches (details here), but it seemed like this was something I might want to refer to another time. So, I deleted it from the comments but provide it here, without endorsement. I have not even read the whole comment yet!
The benefits extend substantially beyond reduced criminal justice involvement. Using data from the National Survey on Drug Use and Health, we have developed a substance abuse cost calculator that can be used to estimate the prevalence and costs associated with alcohol, drug disorders and prescription pain medication misuse to businesses and public health programs (Medicaid, indigent care). http://www.alcoholcostcalculator.org. The calculator also projects the costs to treat and the one year return on investment in health and other social costs for treatment.
The research base is substantial. We conducted a comprehensive literature review of the costs and benefits associated with substance use treatment in the public sector. Included studies met the following criteria:
The study must utilize a public sector population (e.g. Medicaid, uninsured, or receiving income benefits such as SSI). The study must have been published between January 1999 and January 2010. The study must be published in English. Studies must be methodologically sound and report sufficient information to calculate costs and benefits associated with substance abuse treatment. Studies must include information on a variety of benefits that are applicable to a public sector population. Studies that focused on benefits associated with a single outcome (e.g. crime) were excluded from analysis.
The following studies demonstrate the public sector cost savings that can be achieved through substance abuse treatment.
Estee, S. and Nordlund, D. (2003). Washington State Supplementary Security Income (SSI) Cost Offset Pilot Project. Report 11.109. Available online at:
The cost of substance abuse treatment was compared to the economic benefits associated with reduced medical, mental health, and nursing home costs, using data from Washington State. Analyses compared a sample of 7153 Supplementary Security Income (SSI) recipients who received treatment to a sample of 8881 recipients who needed, but did not receive treatment. Analyses indicated that substance abuse treatment resulted in total Medicaid (medical, mental health and nursing home) costs that were $252 less per month, per client. The total estimated cost of treatment was $162 per month, resulting in an estimated benefit-cost ratio of 1.5: 1, or $15,000 for every $10,000 invested in treatment. All costs and benefits are reported in 2001 dollars.
Norlund, DJ, Estee, S., Mancuso, D and Felver, B. (2004). Methadone Treatment For Opiate Addiction Lowers Health Care Costs And Reduces Arrests And Convictions. Report 4.49fs. Available online at:http://www.dshs.wa.gov/pdf/hrsa/dasa/ResearchFactSheets/449fsMTFOA0604.pdf16
The cost of methadone treatment for opiate addictions was compared to the economic benefit associated with reduced medical, mental health, and long-term care costs using data from Washington State. Supplementary Security Income (SSI) recipients who received methadone treatment (n = 675) were compared to recipients who needed, but did not receive treatment (n= 1065). Analyses indicated that methadone treatment resulted in a benefit of $765 per month per client. The total estimated cost of methadone treatment was $219 per month, resulting in an estimated benefit-cost ratio of 3.5:1, or $35,000 for every $10,000 invested in treatment.
Norlund, DJ, Estee, S., Mancuso, D and Felver, B. (2004). Non-Methadone Chemical Dependency Treatment For Opiate Addiction Reduces Health Care Costs, Arrests And Convictions. Report 4.50fs. Available online at:http://www.dshs.wa.gov/pdf/hrsa/dasa/ResearchFactSheets/449fsMTFOA0604.pdf16
The cost of non-methadone treatment for opiate addictions was compared to the economic benefit associated with reduced medical, mental health, and long-term care costs using data from Washington State. Supplementary Security Income (SSI) recipients who received “drug-free” non-methadone treatment (n = 1614) were compared to recipients who needed, but did not receive treatment (n= 1065). Analyses indicated that the “drug-free” non-methadone treatment resulted in a benefit of $512 per month per client. The total estimated cost of non-methadone treatment was $200 per month, resulting in an estimated benefit-cost ratio of 2.5:1, or $25,000 for every $10,000 invested in treatment.
French, MT, Salome, HJ, and Carney, M. (2002). Using the DATCAP and ASI to Estimate the Costs and Benefits of Residential Addiction Treatment in the State of Washington. Social Science and Medicine. 55(1): 2267-2282.
The cost of residential substance abuse treatment was compared to the economic benefits associated with changes in medical status, psychiatric status, employment and legal status using data from the Washington State Outcomes Project. Treatment and outcome data was collected from 75 publically funded patients receiving treatment from one of nine residential treatment facilities in Washington State. After six months, the average (per client) total economic benefit of substance abuse treatments was estimated to be $21,329, composed of $20,089 in legal and employment savings, and $1240 in medical and psychiatric savings. The estimated cost of the treatment was $4912 per client. The benefit-cost ratio of the treatment was estimated to be 4.3:1, or $43,000 for every $10,000 invested in residential substance abuse treatment. All costs and benefits reported are in 1999 dollars.
French, MT, McCollister, KE, Sacks, S, McKendrick, K and De Leon, G. (2002).
Benefit-Cost Analysis of a Modified Therapeutic Community for Mentally Ill Chemical Abusers Evaluation and Program Planning. 25: 137-148.The costs and benefits associated with a modified therapeutic community treatment for substance abuse were compared to the costs and benefits of treatment as usual (TAU) for this population. Two hundred and eighty-six homeless, mentally ill clients with substance abuse problems were assigned to either modified therapeutic community treatment (146) or, based on availability, to TAU (40). After 12 months, the average incremental total economic benefit of modified therapeutic community treatment (relative to TAU) was estimated to be $105,618 in medical, legal and employment savings per client. The estimated cost of the treatment was $20,361 per client. The benefit-cost ratio of the treatment was 5.2:1, or $52,000 for every $10,000 invested in substance abuse treatment. All costs and benefits reported are in 1999 dollars.
French, MT, Salome, HJ, Krupski, A, Mckay, JR, Donovan, DM, Mclellan, T and Durell, J. (2000). Benefit-Cost Analysis of Residential and Outpatient Addiction Treatment in the State of Washington. Evaluation Review. 24:609-634.
The cost of residential and outpatient substance abuse treatment services was compared to the economic benefits associated with changes in medical status, psychiatric status, employment, and legal status using data from the Washington State Treatment Outcome Pilot Prospective Study (TOPPS). Two types of treatment were examined: full continuum services, in which the client is provided with inpatient care, and subsequent “step down” care that included intensive outpatient services and partial continuum care, in which only outpatient care is provided. The sample included 263 addiction treatment clients who were eligible for publically financed addiction services. After 9 months, the average benefit of full continuum care over partial continuum care was $20,363 per client which included a benefit of $964 in reduced medical and psychiatric costs and $19,399 in employment income, money spent on alcohol/drugs, and legal status. The cost associated with the full benefit services was $2530. The estimated benefit cost ratio for the full-continuum services was 9.7:1, or $97,000 for every $10,000 invested in substance abuse treatment. The benefit-cost analysis for the partial continuum service was not significantly different than zero. All costs and benefits are reported in 1997 dollars.
French, MT, Salome, H., Sindelar, JL, and McLellan, T. (2002). Benefit-Cost Analysis of Addiction Treatment: Methodological Guidelines and Empirical Application Using the DATCAP and ASI. Health Services Research. 37(2): 433-455.
The costs of outpatient, drug-free substance abuse treatment were compared to the economic benefits associated with changes in medical and psychiatric status, employment status, drug/alcohol use, and legal status. The sample included clients at three outpatient drug-free substance abuse facilities participating in the Philadelphia Target Cities Project. Using conservative (lower bound) estimates, the average economic benefit associated with substance abuse treatment was $2197 per client after 7 months. The average cost of treatment was $258. The estimated benefit-cost ratio was 9:1, or $91,000 for every $10,000 invested in substance abuse treatment.
French, MT, McCollister, KE, Cacciola, J, Durell, J and Stepjhens, RL. (2002). Benefit-Cost Analysis of Addiction Treatment in Arkansas: Specialty and Standard Residential Programs for Pregnant and Parenting Women. Substance Abuse. 23(1): 31-51.
The costs of substance abuse services were compared to the economic benefits associated with changes in medical and psychiatric status, employment status, drug/alcohol use, and legal status. Two types of treatment were examined: specialty and standard services. Specialty treatment services included residential addiction treatment that included a variety of “wrap-around” services including job training, child care, transportation, and parenting skills training. Standard services included post-detoxification and rehabilitative services in a residential setting. The sample included 85 pregnant, or parenting women. The average economic benefit for the specialty care condition was $25,178 per client, including a $646 benefit associated with improvements in medical and psychiatric status, and $19,191 in benefits associated with changes to legal status. The average cost associated with the specialty treatment services was $8035, suggesting a benefit-cost ratio of 3.1:1. The average economic benefit associated with the standard care program was $9557, including an $1849 benefit associated with improvements in medical and psychiatric status, and $5062 associated with changes to legal status. The average cost of the standard program was $1467, suggesting a benefit-cost ratio of 6.5:1. All costs and benefits are reported in 1998 dollars.
Koenig, LK, Siegel, JM, Harwood, H, Gilani, J, Chen, Y, Leahy, P and Stephens, R. (2005). Economic Benefit of Substance Abuse Treatment: Findings From Cuyahoga County, Ohio. Journal of Substance Abuse Treatment. 28: S41-S50.
The costs of substance abuse treatment were compared to the benefits associated with changes in crime, health, welfare and earnings. Five types of treatment were examined: methadone, short-term residential rehabilitation, long-term residential rehabilitation, intensive outpatient treatment, and outpatient treatment. The sample included 595 clients receiving services at publically funded programs in Cuyahoga, Ohio. Across all the conditions, the average economic benefit associated with treatment was $17,547 per client. The overall cost of treatment was $4264, suggesting an overall benefit-cost ratio of 4.1:1, or $41,000 for every $10,000 invested in treatment. Additional analyses estimated benefit-cost ratios for different treatment modalities. The smallest benefit-cost ratio was for methadone, at 1.7:1. The largest benefit-cost ratio was for intensive outpatient treatment, at 6.8:1. All cost and benefits are reported in 1997 dollars.
Koeing, L., Denmead, G., Nguyen, R., Harrison, M. and Harwood, H. (1999). The Costs and Benefits of Substance Abuse Treatment: Findings from the National Treatment Improvement Evaluation Study (NTIES). Substance Abuse and Mental Health Services Administration, Center for Substance Abuse Treatment, National Evaluation Data Services.
The costs of substance abuse treatment were compared to the benefits associated with improvements in health care costs, crime costs, and social welfare benefits. Five types of treatment were examined: short-term hospitalization, short-term residential, long-term residential, outpatient methadone, and ambulatory outpatient treatment. The sample included a total of 5264 clients that received services from a clinic that received public support from the Center for Substance Abuse Treatment (CSAT). Across all conditions, the economic benefit after 12 months was $9177 per client, which included $8611 in reduced crime costs, $215 in reduced health care costs, and $351 in increased earnings from employment. The average cost for treatment was $2941, suggesting a benefit-cost ratio of 3.1:1. Additional analyses estimated benefit-cost estimated benefit-cost ratios of 3.7:1 for ambulatory outpatient care, 1.4:1 for short-term hospital, and 3.6:1 for long-term residential care. All cost and benefits are reported in 1994 dollars.
Ettner, S.L., Huang, D., Evans, E., Ash, DR, Hardy, M, Jourabchi, M. and Yih-Ing, H. (2006). Benefit-Cost in the California Treatment Outcome Project: Does Substance Abuse Treatment “Pay for Itself”? Health Research and Educational Trust. 41(1): 192-213.
The costs of substance abuse treatment were compared to the benefits associated with changes in medical care, mental health care, criminal activity, and earnings. Three types of treatment were examined: methadone maintenance, outpatient treatment and residential treatment. The sample included 2567 clients receiving substance abuse services using data from the California Drug and Alcohol Treatment Assessment Project.
After nine months, the average economic benefit associated with substance abuse treatment was $11,487 per client, composed of $595 in reduced hospital and emergency room visits, $77 in reduced mental health services, $1788 in reduced incarceration costs, and $3352 in increased money received from employment. Across all conditions, the average cost of treatment was $1583, suggesting an overall benefit-cost ratio of 7:1. Additional analyses estimated the benefit-cost ratio associated with outpatient treatment was 11:1, and the benefit-cost ratio associated with residential treatment was 6:1. The study found that methadone treatment offered no statistically significant benefits. All costs and benefits are expressed in 2001 dollars.
