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Measuring and Improving Costs, Cost-Effectiveness,
and Cost-Benefit for Substance Abuse Treatment Programs


Measuring and Improving Cost, Cost-Effectiveness, and Cost-Benefit for Substance Abuse Treatment Programs: A Manual takes the mystery out of cost accounting. Treatment programs, regardless of their funding sources, are faced with constant pressures to keep costs to a minimum and to justify every expenditure. Yet accounting for costs takes time that might better be spent on treatment itself. Also, program staff trained in helping people may not be proficient in tracking money.

The National Institute on Drug Abuse, as part of its mission to assist programs that treat substance abusers, has sponsored research related to cost issues. The results of these studies are available to treatment programs at no cost as part of NIDA's policy of transferring technology as soon as possible. One example of this is Measuring and Improving Cost, Cost-Effectiveness, and Cost-Benefit for Substance Abuse Treatment Programs: A Manual.

The manual describes several ways to determine cost effectiveness and benefits, ranging from simple educated estimates to sophisticated, computerized methods. It even shows you how to find people at little or no cost to help you collect and analyze the data.

No background in accounting or research is needed to use the methods described in the manual. The hands-on format and step-by-step instructions, exercises, and worksheets are designed to guide professionals from a variety of disciplines and educational backgrounds through the collection and analysis of data on costs, procedures, effectiveness, and benefits. Most of these data are already being collected for other purposes, such as billing or evaluating patient progress.

What Does the Manual Contain

The methodology used in this manual is based on a cost-procedure-process-outcome analysis (CPPOA) model that has been well researched and tested with substance abuse treatment programs.

The manual itself consists of 12 chapters, starting with definitions of various cost analyses and explaining their importance. A suggested timetable breaks the measurement process into specific tasks, identifies who needs to be involved, and presents concrete assignments for each person on the data collection and analysis team.

Then the manual explains the model on which it is based and helps you define your own program in terms of your resources, procedures, processes, and outcomes. This exercise alone can reveal many things about your program, both its strengths and its weaknesses.

  • Detailed, step-by-step instructions and suggestions are given for -

  • Collecting and analyzing cost data.

  • Collecting patient data.

  • Finding the cost-effectiveness of your procedures and processes.

  • Exploring cost benefits.

  • Using your findings to improve your program.

Collecting and Analyzing Cost Data

The manual defines various categories of costs and spells out strategies for collecting data. Most costs are already known to someone in the program; your task is to get all the information in one place. Provider time may need to be taken from individual patient records. Personnel will know salaries and wages. Your administrator will probably have records on the cost of space and utilities. Whoever pays the bills will know the cost of medications, transportation, and so forth.

The manual provides sample forms and formats for putting these data together for easy analysis. When your data collection plan is in place, the actual time required to implement it will be minimal.

Analyzing the data is simply finding the cost of each procedure for each patient for the month or quarter. With all the numbers in one place, this can be done by hand or using a calculator, although a computer spreadsheet program might be more efficient.

Collecting Patient Data

The manual describes the types of data you will want to collect for each patient. Again, most of this is already available from intake forms and progress reports. Several ways of coding patient progress are suggested.

Finding the Cost- Effectiveness of Your Procedures and Processes

The measures of patient progress show the effectiveness of your procedures. The manual provides several ways to turn measures of effectiveness into measures of monetary benefits.

Methods for analyzing data with graphs and spreadsheets are explained using examples from substance abuse programs. Sample tables, charts, and report outlines describe ways to present the findings to others.

Exploring Cost Benefits

The manual also discusses ways to show the cost benefits of your program. These include the many savings for the community related to the costs of crime, unemployment, and health services for untreated substance abusers. It also shows how treatment increases community income.

Using Your Findings To Improve Your Program

Determining the cost and effectiveness of your procedures gives you the necessary information for improving your program. The manual explains several ways to compare your program to other programs and to compare procedures within your program. It also points out the pitfalls of certain comparisons.

The manual suggests a variety of changes you might try that could save money without jeopardizing your program. It even suggests ways to save time and money on measuring costs.

Is This Method Realistic for a Clinical Program?

The last chapter of the manual gives a detailed illustration of how the CPPOA model was used by the staff and administrators of an actual substance abuse treatment program. It takes you step by step through their experience, showing how they made decisions, how their view of their program changed during the process, what they learned, and how they applied their findings to improving their program.

You will find that the greatest expenditure of time is in the early planning stages when you are defining your program and what you want to know about it - or what your funders want. Once these decisions are made, data collection requires very little time. It can be part of the daily routine for everyone or a periodic job for one person.

Once a month or quarter, analyzing the data and preparing usable reports may take one person several hours or a couple of days, depending on your method. You will probably spend just as much time reviewing your program and looking for ways to improve it as before, but armed with your cost-effectiveness reports, you can make better informed decisions and be assured of more predictable results.

The ability to show concrete evidence of your contribution to the community through cost-benefit analysis will also help you raise additional funds. Can you afford not to thoroughly examine the relationship of your costs to your program's results?

[Manual Index] [Next Section - Introduction]

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