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Home > Publications > NIDA Notes > Vol. 19, No. 5 > Research Findings

Economists Offer Program for Costing Out Drug Abuse Treatment
Research Findings
Vol. 19, No. 5 (January 2005)



By Marion Torchia, NIDA NOTES Contributing Writer

NIDA-supported economists are offering drug treatment program administrators a comprehensive program to estimate their costs. The Drug Abuse Treatment Cost Analysis Program (DATCAP) features materials and a method to capture and put dollar values on the full range of treatment resources. Along with analyzing their own economic operations, administrators eventually will be able to use a nationwide DATCAP database to compare their costs with those of similar programs, become more efficient, and achieve better treatment outcomes. Dr. Michael T. French of the University of Miami in Coral Gables, Florida, one of the system's designers, says that ultimately, the database should provide answers to the questions asked by cost-conscious public agencies and insurers: How much do today's drug treatment programs cost? What are the most cost-effective treatment approaches? Which programs return the greatest net benefits?

Mean Patient Flow and Costs of Substance Abuse Treatment Programs

Outpatient Programs

Information gathered between 1993 and 2002 from 53 outpatient programs.
Program Type
(Number Surveyed)
Average
Length of
Stay, weeks
(SD)
Average
Daily
Census
(SD)
Total
Annual
Economic
Cost (SD)
Weekly
Economic
Cost Per
Client1 (SD)
Economic
Cost Per
Treatment
Episode2 (SD)
Methadone clinics (11) 99 (53) 388 (186) $1,684,254
($674,444)
$91 ($33) $7,358
($3,849)
Standard outpatient (14) 17 (9) 212 (188) $1,080,690
($757,227)
$121 ($85) $1,944
($1,960)
Intensive outpatient (6) 7 (8) 13 (9) $328,007
($411,364)
$462 ($243) $4,445
($6,302)
Adolescent outpatient (13) 13 (6) 8 (2) $48,170
($50,518)
$194 ($91) $2,678
($2,787)
Drug court (9) 46 (20) 205 (184) $539,660
($136,713)
$82 ($43) $3,463
($2,187)

Residential Programs

Information gathered during the same period from 32 residential programs.
Program Type
(Number Surveyed)
Average
Length of
Stay, weeks
(SD)
Average
Daily
Census
(SD)
Total
Annual
Economic
Cost (SD)
Weekly
Economic
Cost Per
Client1 (SD)
Economic
Cost Per
Treatment
Episode2 (SD)
Adult residential (18) 13 (14) 34 (21) $1,104,189
($643,053)
$700 ($343) $9,426
($11,023)
Adolescent residential (1) 8 22 $1,307,064 $1,138 $9,347
Therapeutic community (5) 33 (22) 152 (265) $3,330,137
($4,821,587)
$587 ($194) $18,802
($12,409)
In-prison therapeutic community (8) 28 (12) 265 (288) $1,083,017
($1,587,030)
$55 ($11) $1,534
($947)

Source: Roebuck, M.C.; French, M.T.; and McLellan, A.T. (2003).

Notes: All amounts, including dollar amounts, are means. All costs are reported in 2001 dollars.
1 Total annual economic cost divided by the average daily census, divided by 52.14 weeks.
2 Weekly economic cost per client multiplied by the average length of stay.

DATCAP Features

Administrators can download DATCAP survey forms and user manuals free of charge from www.DATCAP.com. DATCAP's developers note, however, that most programs will require the services of an economist trained in cost analysis and program evaluation to obtain the most useful results.

DATCAP captures both accounting costs (the costs usually entered on an institution's financial statements, such as outlays for labor and supplies) and economic costs (all the resources a treatment center uses to serve its patients). Economic costs include resources that are partially subsidized or made available at no charge, such as volunteer labor. DATCAP's inclusive cost perspective permits comparison of treatment programs that have very different financial structures.

The program is adaptable to any treatment setting. By focusing on the cost of specific treatment methods rather than on entire programs, it can capture costs in settings that also offer other services. The same questionnaire is provided for inpatient and outpatient services.

"Program DATCAP" gathers detailed information about a program's resources, revenues, and expenses, and about its clients and the services they receive. "Brief DATCAP" is a less labor-intensive alternative to the full instrument. "Client DATCAP" surveys clients directly and assigns a dollar value to costs they incur as a result of getting treatment, such as travel and child care. Although the DATCAP project is still in its early stages, administrators who use it can identify costs they were unaware of and find opportunities to strengthen their operations.

The Nationwide Database

Dr. French hopes that as program administrators around the country begin to use DATCAP to track their own costs, they will see the advantage of reporting their findings to a central repository. "Only when everyone's costs are pooled will it be possible for a program to compare itself with other programs," he says.

To encourage wider participation in the ongoing research on DATCAP, its creators have published some early survey results. Among these, they found that among 85 programs surveyed between 1993 and 2002, methadone maintenance programs had lower labor costs (55 percent of total costs compared with 68 percent for standard outpatient programs) and relatively higher costs for supplies and materials. Not surprisingly, standard outpatient programs were much less expensive than intensive programs: The 14 standard programs reported a mean weekly economic cost per client of $121; for the intensive programs, the weekly cost was nearly four times that amount—or $462 per client. However, the intensive programs generally offered a shorter course of treatment, so their mean total cost for a client's treatment episode was only slightly more than twice the cost of the standard outpatient programs ($4,445 versus $1,944).

The new database has limitations, the authors caution. The programs were not selected randomly and are not geographically representative. Also, the costs of a small number of atypical programs sometimes skewed the results. Nevertheless, says Dr. French, the results of the 85 surveys constitute a rich new source of information. "The database will get better as new programs are added, and eventually the cost estimates will be updated continually on the DATCAP Web site," he says.

Next Step: Link Cost to Outcome

Although program managers find it useful to compare their costs with those of their peers, policymakers are much more interested in the relationship between costs and the intended program outcomes. Cost-effectiveness analysis and cost-benefit analysis of drug abuse treatment have demonstrated encouraging results. One California study found that $1 invested in substance abuse treatment saves taxpayers $7 in future costs, including those related to crime and care for medical problems resulting from drug use. ["Evaluating Recovery Services: The California Drug and Alcohol Treatment Assessment (CALDATA)," California Department of Alcohol and Drug Programs, April 1994.]

In a recent study using DATCAP, Dr. Jody Sindelar and her colleagues at Yale University in New Haven, Connecticut, found that Philadelphia treatment programs that offered "enhanced care" produced better outcomes with regard to drug abuse compared with those that offered only standard care. However, standard care programs had better results with respect to other treatment outcomes.

Techniques of Economic Analysis of Drug Treatment

  • Cost-Effectiveness Analysis: A technique for evaluation of clinical outcomes. It asks whether one treatment produces a better outcome at the same cost as another, comparable outcomes at less cost, or if an enhanced outcome is "worth" the additional cost.
  • Cost-Benefit Analysis: Decisionmakers use cost-benefit analyses in determining how to allocate their budgets. The "cost" part of the analysis estimates the dollars necessary to achieve each alternative policy goal—for example, reducing drug abuse by 10% or raising school test scores by 10%. The "benefit" part estimates the dollar value of all the positive effects of success—for example, reduced medical costs because of fewer health problems associated with drug abuse, or a better educated, more skillful workforce attracting new industry to the area. All other concerns being equal, the goal that produces the most benefits for the lowest cost gets budget priority.

Says Dr. Sindelar, "Looking at treatment programs with too narrow a focus may produce misleading results. Reduced drug use is certainly the most direct outcome of treatment, but it is not necessarily the only one, or even the most important one to society. We need to find ways to give appropriate weight to all the outcomes we believe are important. But we believe that combining DATCAP and ASI [Addiction Severity Index] is a good first step."

Dr. William S. Cartwright, an economist with NIDA's Division of Epidemiology, Services and Prevention Research, believes DATCAP is the beginning of something important. "We know more about where the hidden costs are, and we are able to link costs to outcomes. I hope this information will enable us to make better use of scarce resources, toward our shared goal of reducing drug abuse and the problems it causes."

Sources

French, M.T.; Salomé, H.J.; Sindelar, J.L.; and McLellan, A.T. Benefit-cost analysis of addiction treatment: Methodological guidelines and application using the DATCAP and ASI. Health Services Research 37(2):433-455, 2002.
[Abstract]

Roebuck, M.C.; French, M.T.; and McLellan, A.T. DATStats: Results from 85 studies using the Drug Abuse Treatment Cost Analysis Program (DATCAP). Journal of Drug Abuse Treatment 25(1):51-57, 2003.
[Abstract]

Sindelar, J.L.; Jofre-Benet, M.; French, M.T.; and McLellan, A.T. Cost-effectiveness analysis of addiction treatment: Paradoxes of multiple outcomes. Drug and Alcohol Dependence 73(1):41-50, 2004.
[Abstract]

 

Volume 19, Number 5 (January 2005)


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