Cost-effectiveness of substance use treatment

As I quoted in Friday’s “Reading list“, in Social costs of robbery and the cost-effectiveness of substance abuse treatment, Basu, Paltiel, and Pollack found that

Under worst-case assumptions, monetized valuations of reductions in armed robbery associated with outpatient methadone and residential SAT [substance abuse treatment] exceeded economic costs of these interventions. Conventional wisdom posits the economic benefits of SAT. We find that SAT is even more beneficial than is commonly assumed.

However, they note the potential for selection bias. Their methodology

cannot control for differing readiness to change, which may lead clients to seek treatment in the first place or influence clients’ assignment to a particular treatment modality. If individuals initiate treatment out of a desire to reduce offending, or if treatment is accompanied by other crime-reducing interventions, our analysis will overstate the benefit of treatment.

The paper also includes the following review of the literature.

SAT has been linked with reduced crime, improved health, and increased employment (McGlothlin and Anglin, 1981; Gerstein and Harwood, 1990; McLellan et al., 1997a,b; Harwood et al., 1999). SAT is also credited with reducing the spread of infectious diseases, such as HIV (Metzger et al., 1993; IOM, 2000). Several recent syntheses summarize the literature on the clinical benefits and economic value of SAT (Cartwright, 1998, 2000; Shepard et al., 1999; Sindelar and Fiellin, 2001; French et al., 2002). Most research finds that SAT is cost-effective and perhaps cost-saving (Caulkins, 1997).

Crime reduction accounts for much of the economic benefit of SAT (French et al., 2002; McCollister and French, 2003; Dismuke et al., 2004; Sindelar et al., 2004). In one prominent analysis of cocaine-dependent clients, Flynn et al. examined clients’ self-reported crime before and after treatment, finding that the economic value of SAT-related crime reductions far exceeded the associated treatment costs (Flynn et al., 1999). […]

Flynn et al. (1999) cite tangible costs of $1,304 per burglary. By contrast, Cohen et al. obtain estimates of $31,000 to avert the same crime using willingness-to-pay (WTP) valuation methodologies that capture a broader range of crime consequences and societal preferences. […]

Along with burglary and serious assault, armed robbery imposes especially large social costs. Cohen et al. report that survey respondents are willing to pay more than $200,000 to avert such a crime.

Another paper I noted on Friday, How much can treatment reduce national drug problems? by Peter Reuter, Harold Pollack, includes a review of the literature pertaining to the benefits and limitations of substance use treatment, prevention, and enforcement. The authors conclude,

Treatment can justify itself in terms of reductions in harms to individuals and communities. However, even treatment systems that offer generous access to good quality services will leave a nation with substantial drug problem. Finding effective complementary programs remains a major challenge. […]

The problem is not that the United States has failed to achieve the impossible, but that it has failed to achieve things that could readily be achieved. […]

For interventions other than treatment, policymakers must rely on impression and image; the empirical base for policymaking is lacking.


Cartwright W. 1998. Cost–benefit and cost-effectiveness analysis of drug abuse treatment services. Evaluation Review 2(5): 609–636.

Cartwright W. 2000. Cost–benefit analysis of drug treatment services: review of the literature. Journal of Mental Health Policy and Economics 3(1): 11–26.

Caulkins J. 1997. Mandatory Minimum Drug Sentences: Throwing Away the Key or the Taxpayers’ Money? RAND Drug Policy Research Center: Santa Monica.

Cohen M, Rust R et al. 2004. Willingness to pay for crime control programs. Criminology 42(1): 89–110.

Dismuke C, French M et al. 2004. Out of touch or on the money: do the clinical objectives of addiction treatment coincide with economic evaluation results? Journal of Substance Abuse Treatment 27: 253–263.

Flynn P, Kristiansen P et al. 1999. Costs and benefits of treatment for cocaine addiction in DATOS. Drug and Alcohol Dependence 57(2): 167–174.

French M, Salome J et al. 2002. Benefit–cost analysis of addiction treatment: methodological guidelines and empirical application using the DATCAP and ASI. Health Services Research 37(2): 433–455.

Gerstein DR, Harwood HJ. 1990. Treating Drug Problems. National Academy Press, Institute of Medicine: Washington, DC.

Harwood H, Fountain D et al. 1999. Cost estimates for alcohol and drug abuse. A Report and Commentaries. Addiction 94(5): 631–647.

IOM 2000. No Time to Lose: Making the most of HIV Prevention. National Academy Press: Washington, DC.

McCollister K, French M. 2003. The relative contribution of outcome domains in the total economic benefit of addiction interventions: a review of first findings. Addiction 98: 1647–1659.

McLellan A, Grissom G et al. 1997. Problem-service ‘Matching’ in addiction treatment. Archives of General Psychiatry 54(8): 730–735.

McLellan A, Woody G et al. 1997. Evaluating the effectiveness of addiction treatment: reasonable expectations, appropriate comparisons. In Treating Drug Abusers Effectively, Egertson J, Fox D, Leshner A (eds). Blackwell: Oxford, 7–40.

McGlothlin WH, Anglin MD. 1981. Shutting off methadone. Costs and benefits. Archives of General Psychiatry 38(8): 885–892.

Metzger D, Woody G et al. 1993. Human immunodeficiency virus seroconversion among intravenous drug users in- and out-of-treatment: an 18-month prospective follow-up. Journal of Acquired Immune Deficiency Syndromes and Human Retrovirology 6(9): 1049–1056.

Shepard D, Larson M et al. 1999. Cost-effectiveness of substance abuse services. The Psychiatric Clinics of North America 22(2): 385–400.

Sindelar J, Fiellin D. 2001. Innovations in treatment for drug abuse: solutions to a public health problem. Annual Review of Public Health 22: 249–272.

Sindelar J, Jofre-Bonet M et al. 2004. Cost-effectiveness analysis of addiction treatment: paradoxes of multiple outcomes. Drug and Alcohol Dependence 73: 41–50.

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