Benefit-Cost Analysis of Residential and Outpatient Addiction Treatment in the State of Washington

Abstract

A benefit-cost analysis of full continuum (FC) and partial continuum (PC) care was conducted on a sample of substance abusers from the State of Washington. Economic benefits were derived from client self-reported information at treatment entry and at 9 months postadmission using an augmented version of the Addiction Severity Index (ASI). Average (i.e., per client) economic benefits of treatment from baseline to follow-up for both FC and PC were statistically significant for most variables and in the aggregate. The overall difference in average economic benefit between FC and PC was positive ($8,053) and statistically significant, favoring FC over PC. The average cost of treatment amounted to $2,530 for FC and $1,138 for PC (p < .01). Average net benefits were estimated to be $17,833 (9.70) for FC and $11,173 (23.33) for PC, with values showing statistical significance (p < .05). Results strongly indicate that both treatment options generated positive and significant net benefits to society.

Out of touch or on the money: Do the clinical objectives of addiction treatment coincide with economic evaluation results?

“…Though most costs associated with criminal acts declined substantially, average costs associated with arson, rape, and vehicle theft actually increased slightly. Similar studies have also found that the biggest economic improvement from treatment was obtained from reductions in criminal activity (French, Salomé, & Carney, 2002;French et al, 2000;French, Salomé, Sindelar, & McLellan, 2002;Salomé, French, Scott, et al, 2003). The second largest economic improvement in outcomes occurred for increased income from employment (from $1,046 at baseline to $2,576 averaged across the followup periods), representing an increase of 146% from baseline.…”

“…(The majority of the monetary conversion factors were specific to the State of Illinois. For a detailed description of how the monetary conversion factors were obtained, please refer to Table 3 in Salomé, French, Scott, Foss, and Dennis (2003) and to the methods outlined in French, Salomé, and Carney (2002); French et al (2000); and French, Salomé, Sindelar, and McLellan (2002).) Income received from employment was already expressed in dollars and therefore did not require conversion.…”

“…The appropriate techniques for analyzing these and other health interventions are cost-effectiveness analysis (CEA), which compares the incremental economic cost of an intervention to its incremental effectiveness in terms of clinical outcomes of 0740-5472/04/$ -see front matter D 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.jsat.2004.08.005 often intangible value (e.g., Barnett, Zaric, & Brandeau, 2001;Drummond, O'Brien, Stoddart, & Torrance, 1997;Gold, Siegel, Russell, & Weinstein, 1996;McCollister, French, Inciardi, et al, 2003;McCollister, French, Prendergast, et al, 2003;Zarkin, Lindrooth, Demiralp, & Wechsberg, 2001), and benefit-cost analysis (BCA), which accounts for multiple health, criminal justice, and other outcomes of tangible value (French, McCollister, Cacciola, Durell, & Stephens, 2002;French, McCollister, Sacks, McKendrick, & De Leon, 2002;French, Salomé, & Carney, 2002;French et al, 2000;French, Salomé, Sindelar, & McLellan, 2002;Gerstein et al, 1994;Harwood, Hubbard, Collins, & Rachal, 1995;Plotnick, 1994;Rajkumar & French, 1997;Salomé, French, Scott, et al, 2003;Tabbush, 1986). Though often preferred by clinical audiences because of its direct relation to clinical outcomes, CEA can be problematic when used in conjunction with multiple outcomes.…”

Step arounds for common pitfalls when valuing resources used versus resources produced

“…Moreover, in light of the diminishing availability of many resources for most needs, funders also weigh not only whether more resources were produced than were consumed by individual programs, but how the net benefit of some programs compares to the net benefit of other, alternative programs. For many programs, including substance-abuse treatment and psychological services, benefits such as increased licit income and reduced use of health, mental health, and criminal justice services are 9.7 to 14.9 times larger than the costs of those programs-see, for example, French et al (2000). So, is this what value-ation of a program has come to: comparison of the resources used (costs) versus the outcomes produced (benefits)?…”

What does cost-benefit analysis add to decision making? Evidence from the criminal justice literature

“…Another challenge to measuring the effect of an intervention is the short-term nature of effect studies compared with the longer-term nature of the effects of interventions (Cartwright 2000;French et al 2000French et al , 2002aHarrell and Roman 2001;Roman and Butts 2005). Cartwright (2000) points out that shortrunning evaluation frameworks are inadequate for dealing with a long-running problem such as substance addiction.…”