Cost-benefit analysis of drug treatment services: review of the literature

Abstract

Background: How valuable is public investment in treatment for drug abuse and dependency in the real world of everyday practice? Does drug abuse treatment provide benefits and how are they valued? What are the costs of obtaining outcomes and benefits? Cost-benefit analysis attempts to answer these questions in a standard analytic framework. Aims: This paper reviews cost-benefit analyses with scientific merit so that analysts will have a current picture of the state of the research. It will also give public decision-makers information with regards to the available evidence for policy purposes. Method: Bibliographic searches were performed. Studies were obtained through the assistance of the Parklawn Health Library system, a component of the US Public Health Service. Selected studies were from the scientific literature with the exception of eight studies published as governmental reports. Results: Cost-benefit studies have fallen into the following categories: (i) planning models for delivery systems in states and cities; (ii) short-term follow-up studies of individuals, (iii) single individual programs and (iv) state system's monitoring of outcomes. In 18 cost-benefit studies, a persistent finding is that benefits exceed costs, even when not all benefits are accounted for in the analysis. Much variation is found in the implementation of costbenefit methods, and this is detailed across discussions of effectiveness, benefits and costs. Studies have emphasized the cost savings to society from the reduction in external costs created by the behavioral consequences of addiction and drug use. Discussion: Economic analysis of drug treatment requires sophisticated conceptualization and measurement. Cost-benefit analysis of drug treatment has been a significant analytical exercise since the early 1970s when the public drug treatment system was founded in the United States. Conclusion: Drug abuse treatment services may be considered as contributing positive economic returns to society. However, considerable work needs to be done to standardize methods used in the studies. A striking area of omission is the absence of studies for adolescents and only one for women in treatment. Implications for Health Care Provision and Use: Finding a positive net social benefit should assist policy-makers with decisions related to drug abuse treatment expenditures.

Substance Abuse Treatment and Motor Vehicle Fatalities

“…Predergast, Podus, Chang, and Urada (2002) perform a meta-analysis on the 'effectiveness of treatment' literature (78 studies) and show that clients who receive treatment have statistically more positive outcomes than those who do not receive treatment. 5 Specifically, substance abuse treatment is believed to be more cost-effective than punishment. A prominent RAND study (Rydell and Everingham (1994)) finds that treatment is 7 times more cost effective than domestic law enforcement, 10 times more effective than interdiction, and 23 times more effective than the "source control" method (attacking drug supply abroad).…”

“…Substance abuse treatment also has the advantage of being a lower-cost approach to consumption reduction compared to criminal justice interventions in alcohol and drug abuse. 5 In order to assess the impact of increased SAT on reductions in traffic fatalities, we would ideally observe data on: the individuals who may receive treatment, the individuals who do receive treatment, the effect of treatment on drug and alcohol consumption, and finally the 1 Levitt and Porter (2001) estimate that drunk drivers are 15 times more likely than sober drivers to cause a fatal accident. 2 Benson, Rasmussen and Mast (1999) discuss the effectiveness of these policies.…”

The economic costs of substance abuse treatment: Updated estimates and cost bands for program assessment and reimbursement

“…Space constraints do not permit us to fully elaborate on the methods used for more advanced approaches, such as costeffectiveness analysis, cost-utility analysis, and benefit-cost analysis. These techniques have been presented thoroughly in a number of recent articles in the substance abuse literature (e.g., Cartwright, 2000;French & Drummond, 2005;Zavala et al, 2005;Cartwright, in press[a]; Cartwright, in press[b]). Interested readers can consult these articles to obtain a complete perspective on the approaches used to estimate costs, outcomes, and economic benefits of substance abuse treatment services.…”

Investigating the Drugs - Crime Channel in Economics of Crime Models: Empirical Evidence from Panel Data of the German States

“…Furthermore, insights from the literature on the economic costs-of-illness need to be included in a comparative evaluation of the costs and benefits of combating illicit drug use. According to a survey by Cartwright (2000), in one of the latest cost-of-illness estimates for drug abuse in the U.S. (Harwood et al 1998), the aggregate burden was 98 billion dollars in 1992, of which 59% was attributed to the related costs of criminal behaviours. Thus, there is only fragmentary evidence that needs to be integrated into a homogenous picture in future work.…”