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

Improving Program Cost-Effectiveness and Cost-Benefit

The many actions and discussions involved in collecting information on costs, procedures, processes, and outcomes of a treatment program usually suggest several ways to improve the cost-effectiveness and cost-benefit of the program. Common strategies are provided below.

Cost-Procedure Relationships

  • Use less expensive resources that enable the same procedures to be used in treatment, with the same effects on processes and thus the same outcomes (such as providing the same individual therapy using master's-level counselors rather than doctoral-level psychologists).

  • Use different treatment procedures -procedures that are less expensive than current treatment procedures but that produce about the same outcomes (such as nonresidential rather than residential treatment).

Procedure-Outcome Relationships

  • Use treatment procedures that yield better or quicker outcomes, or both, but cost about the same as current treatment procedures.

  • Reduce the "dose" of treatment procedures to (but not beyond) the point that the same outcomes are achieved with substantially less intensive treatment procedures.

Cost-Procedure-Outcome Relationships

  • Use treatment procedures that, although more expensive than current procedures, are so much more beneficial that they justify the additional costs.

Consider Different Perspectives

Additional perspectives may need to be considered in your cost-effectiveness and cost-benefit analyses. For example, if you are considering reducing a 12-month residential program to one of 6 months of residence followed by 6 months of gradually less structured life in the community, have you considered the cost of this change for other social services in your community? They may have to provide additional services for patients who no longer are under your roof continually. Can they afford to do so and maintain their current level of effectiveness or benefit?

Often neglected, too, is the patient's perspective on costs and outcomes. Programs often don't consider the money and time nonresidential patients spend getting to and from the treatment program. Childcare issues and time taken off from work to attend sessions and to follow up on referrals also may not be considered. It might be helpful to ask patients what problems might arise as a result of changes in program procedures.

Experiment With Change

Cost-effectiveness and cost-benefit analyses usually generate a variety of suggestions for program changes that might, or might not, work. Rather than trying to change program operations overnight, it is usually wiser to try out the changes on a small-scale pilot basis. Changes in resources and procedures that appear to work can be implemented broadly. Changes that do not produce the expected better outcomes or lower costs (or both) can be revised.

You might create a schedule for implementation of each type of change on a trial basis. The schedule should also indicate a final date for a decision about whether the change should be continued, expanded, or stopped.

Developing a quantitative feedback loop is key to CPPOA. That is, after data-based changes are made to improve cost-effectiveness and cost-benefit, more data should be collected to monitor the results of those changes. A good system for collecting, managing, and feeding back information on costs, procedures, processes, and outcomes integrates measurement and analysis of cost, effectiveness, and cost-effectiveness into routine program administration.

Develop Regular Reports

Experimenting with different ways of improving outcomes or reducing costs (or both) requires that information on the possible results of changes be available quickly. Regular (perhaps monthly) reports are needed on the costs and implementation of different program procedures and on the results of those procedures in changing patient processes and producing outcomes.

Minimize the Cost

You don't need special or expensive software to make these reports. The spreadsheet software used to collect and analyze cost and other data can be used to automate reports. After all, the reports are compilations of the data you have already collected. Most spreadsheet programs allow one spreadsheet to summarize data from other spread-sheets, which allows you to construct spreadsheets -

  • For counselors, summarizing cost, procedure, process, and outcome data for their patients.

  • For supervisors of counselors, summarizing cost, procedure, process, and outcome data for (the patients of) the counselors they supervise.

  • For program managers, summarizing data for (patients of counselors of) different supervisors.

After you have developed these summary spreadsheets, you can use them again and again to generate the same type of reports. For a new month, just change the cost, procedure, process, and outcome data in the base spreadsheets. These changes will ripple through the spreadsheets that consolidate data for counselors, supervisors, and managers.

To make it easier to show findings, you can add graphs to the spreadsheets for each level of reporting. Simple bar graphs can show which patients, counselors, or supervisors are experiencing better or worse outcomes, procedure implementation, process modification, and costs. Line graphs of the same data for successive months show change trends over time. Once you create these graphs and save them along with the spreadsheets, adding a new month of data for individual patients will automatically update all the graphs.

Tailor Reports to Their Audience

Regular reports on costs, procedures, processes, and outcomes can be useful to counselors, counseling supervisors, program administrators, and patient representatives and advocates. A successful reporting format presents information tailored to the reader. This involves integrating information at three or more levels of specificity and presenting different reports to the persons who operate at each level.

Program managers, for example, need summary information on the costs and outcomes of the program as a whole. Supervisors of direct service staff need outcome and cost information for patients of those staff who report directly to them. Counselor supervisors also need information on what procedures each counselor administered to each patient and what results these procedures had on patient processes. Counselors need information on costs, procedures, processes, and outcomes specific to their patients.

If counselors want to compare their outcomes, costs, procedures, or processes to those of other counselors, they can ask their supervisor for that information. The reporting system can provide supervisors with average counselor statistics to make the comparison easier. (It might be even more useful to provide supervisors with average counselor statistics specific to each counselor. These comparison data would first remove the costs, procedures, processes, and outcomes for the counselor who is being compared.)

Similarly, if supervisors want to compare their performance, they can ask the program manager for comparison statistics. All program personnel who wish to compare their work to that of others can consult persons operating at the next higher level of administration. Persons at higher levels of administration can consult the staff who report to them to get more specific cost, procedure, process, and outcome information.

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