This is Archived Content

This content is available for historical purposes only. It may not reflect the current state of science or language from the National Institute on Drug Abuse (NIDA). To view the latest NIDA Notes visit

Cite this article

NIDA. (1995, April 1). California Study Finds $1 Spent on Treatment Saves Taxpayers $7. Retrieved from

press ctrl+c to copy
April 01, 1995
Neil Swan

Every dollar spent on drug and alcohol abuse treatment saves the public $7, largely through reduced crime, according to a study of the cost-effectiveness of California's substance abuse treatment programs. The University of Chicago's National Opinion Research Center, which conducted the study from 1991 to 1992, called it the largest and most scientifically rigorous cost-benefit analysis of drug abuse treatment ever undertaken.

The study, which was funded by the State of California, found that the $209 million the State spent on treatment between October 1991 and September 1992 resulted in an estimated $1.5 billion in savings for taxpayers. Much of this was due to reductions in crime and in the need for medical care. Specifically, criminal activity by patients in California treatment programs fell by two-thirds after they had completed treatment. Use of medical care declined too. For example, hospital emergency room admissions among those in treatment dropped by a third.

Much of the estimated $1.5 billion in savings for taxpayers was due for reduction in crime and in the need for medical care.

The study's results, which were announced in August 1994, have helped counter skepticism by some observers about the benefits of substance abuse treatment.

"Most people don't believe treatment works, and they're wrong," said NIDA Director Dr. Alan I. Leshner in comments to the news media about the study. "That's why a study like this is so important and why there should be more research demonstrating the effectiveness of drug abuse treatment." Researchers surveyed 1,850 program participants selected through random sampling of the 146,515 people treated for drug abuse in California during the 1-year study period. Patients were re-interviewed 15 to 24 months after the conclusion of their treatment. Patient relapses to drug use during that posttreatment period were recorded, and the researchers, aware that relapse is a persistent lifetime problem, will continue to track the patients.

The study based its cost-saving conclusions on program participants' recollections of their behavior before and after they entered treatment. The authors said their methodology took steps designed to avoid results showing exaggerated cost savings.

The researchers found that the use of crack cocaine, cocaine powder, and amphetamines declined by almost one-half after treatment. Heroin use dropped by one-fifth, and alcohol use fell by nearly one-third.

The dramatic decline in crack cocaine use was a surprise to researchers. "No one has really determined that previously," said Dr. Dean R. Gerstein of the National Opinion Research Center, which conducted the study with Lewin-VHI Inc., a research analysis firm in Fairfax, Virginia. Such studies that demonstrate treatment effectiveness are critical, he said, because the public "is very skeptical about social services."

The researchers focused on 83 treatment programs throughout the State of California, ranging from group homes and outpatient services such as Alcoholics Anonymous to methadone treatment for heroin users. Analysis of patients' reports of their success or failure in remaining drug free after treatment as well as their subsequent criminal and health-care records shows that cost benefits vary according to the type and intensity of treatment provided. With more expensive residential programs, treatment costs resulted in cost benefits at a ratio of 1 to 4; relatively inexpensive outpatient programs, including methadone therapy, showed cost-benefit ratios of 1 to 12.

Although it would take years to evaluate long-range taxpayer savings attributable to treatment, all forms of drug abuse treatment showed some immediate returns, according to an analysis of the patient data. "From the view of taxpaying citizens, treatment managed to pay for itself on the day in which it was delivered," the report concluded.

Only one key study finding was not promising: Patients typically lost income while they were undergoing drug abuse treatment, and their financial condition did not improve immediately after treatment. That's because clients typically worked in the year before treatment, lost or quit their jobs to undergo therapy, and then started working again at a lower pay after treatment, the study found.

Copies of the study, Evaluating Recovery Services: The California Drug and Alcohol Treatment Assessment, are available for $10 from the Lewin-VHI Library, 9302 Lee Highway, Suite 500, Fairfax, VA 22031, (703) 218-5500.