If you have issues viewing or accessing this file contact us at NCJRS.gov. CENTER OF ALCOHOL STUDIES RUTGERSUNIVERSITY PISCATAWAY,NJ EXECUTIVE SUMMARY •~:.:.~:~:.:.>:.:.:.:.:~:.~.:.:.:::.:.~.~:.:::::.:::q:.~::::~:>::>.::~.::::::::~.::::::~::::.::::>.:::::::::::.~.::~:::>>.::::::::::::::~::::::~:.~::::.::::2::::::~::~::.~::::~.::~::::~>.~:::::::::~:~:::~:~:~:::~:>.~:~: >.>~!:i:i:i:i:i:i:i:~i:.::i:i:i:i:?.i:~:!:!:!:i:!:~:?.~:~:!:!:!:~i:i:!:~:i:!:~:~:.::!:i:i:i:~!:i:i:~i:i:i:i:i:i:i:~i:i i l ~ii!i ~Z~II~-~ :! :~.~!:~i:~:i:~::~'~i i:i:~i~i:i:i:i ~i ~i .>.~';.'~..~.~!i ~! ~! ~!~i ~i:~.~.~i:~i ~i i i i ~.~.~:i~i~ ~~:~!:~.~ ! ~i : i ":.'~:i:i:';.'~~~ ~:~';:~i ~ i ~ ~i ~!i!~: ~: :::::::::::::::::::::: ::~: ~:: :~:: ~: ~.~>.'::~: ~:::: ~::: ~:: ~:: !:: ~: ~ ~. ~ ~ ~i ~ ~.~ i~..~ preparedfor the PRESIDENT'S COMMISSION oN Mox)rL STATEDRUG LAWS Socioeconomic Evaluations of Addictions Treatment Prepared for The President's Commission on Model State Drug Laws EXECUTIVE SUMMARY Chapter 1 ................ INTRODUCTION TO THE TECHNICAL PROPOSAL Chapter 2 .................. METHODS OF SOCIOECONOMIC EVALUATION Chapter 3 .................. COST-OF-ILLNESS STUDIES OF ADDICTIONS Chapter 4 .................. ADDICTIONS TREATMENT IN GENERAL CLINICAL POPULATIONS Chapter 5 .................. ADDICTIONS TREATMENT IN WORKFORCE POPULATIONS Chapter 6 ................. ADDICTIONS TREATMENT IN CRIMINAL JUSTICE POPUL~,TIONS AND NARCOTICS USERS Chapter 7 .................. ADDICTIONS TREATMENT WITH PREGNANT WOMEN Chapter 8 .................. CONCLUSIONS AND RECOMMENDATIONS Researchers at the Center of Alcohol Studies, Rutgers University were asked in May, 1992 by the PRESI- ADDICTIONS TREATMENT IN DENT'S COMMISSION ON MODEL STATE DRUG GENERAL CLINICAL POPULATIONS LAWS to review the existing scientific literature on so- cioeconomic evaluations (methods which enumerate General Clinical Populations, as used here, include the cost and consequences) of untreated addictions and Medicaid/Medicare, Blue Cross/Blue Shield, Veterans addictions treatment. The term "socioeconomic evalu- Benefits, and private indemnity insurance eligibles. ation" is a phrase inclusive of terms that are more spe- The socioeconomic literature on this population is still cific, including cost-of-illness, cost-benefit, cost- emerging. Ongoing work promises even more sophis- effectiveness, and cost-offset analysis. ticated analysis of large data bases during the 1990s. However, already a few firm conclusions can be drawn. COST-OF-ILLNESS First, in contrast to non-alcoholics, alcoholics usually STUDIES OF ADDICTIONS (COI) incur health care costs that are at least 100% higher, and in the last twelve months before treatment of ad- A classic cost-of-illness study is a form of evaluation diction, the costs are close to 300% higher. Most of which computes the current economic impact of a dis- this difference is attributable to the alcoholics' higher ease, including the cost and consequences of the un- inpatient utilization for alcohol related illnesses and in- treated illness and the cost of treating the disease when juries but not for treatment of the alcoholism. There is such treatment is available. The most thorough and strong evidence that the treatment of alcoholism, and best respected COl analysis of addictive diseases esti- most likely, other drug dependencies, is cost-beneficial mated the cost of addiction to society in 1985, at $114 - with a return of between $2-$10, depending on the billion. This estimate may be very low since certain types of costs and benefits used, for every $1 spent. cost components - the emerging crack-cocaine prob- When reductions in criminal offenses (and resultant le- lem, the spread of HIV infection due to intravenous gal and court costs), alcohol and other drug affected in- drug use, and the arrival each year of hundreds of thou- fants and HIV incidence, etc. are factored in, CBA sands of alcohol, nicotine, and other drug-exposed in- ratios become even more attractive. fants - are not well reflected yet in any COl study. Add to this estimate collateral health care costs, or the Second, the potential of addictions treatment to signifi- tendency of close family members of addicted persons cantly reduce medical care utilization is one of the to develop physical and/or emotional illnesses, and an strongest conclusions in the scientific literature. After estimate for 1993 that lies between an annual $150 and treatment, health care utilization of treated alcoholics is $200 billion appears justified by all findings. observed to dramatically converge to levels of use in the non-addicted population. Only in cases where the A disproportionate share of the costs of alcoholism are medical complications are advanced, or when the pa- due to morbidity, which can be loosely defined as loss tient is no longer physically resilient, does convergence of functional capacity, and mortality. In contrast to the not occur. Even in these cases, there may be attractive costs of alcoholism, in other drug dependencies, much cost-offsets. As with other diseases that are no longer of the research on total costs here are in police and oth- curable, costs at least can be stabilized and contained. er criminal justice system activity, legal defense fees, incarceration, drug interdiction, property destruction Third, collateral health care offsets are the positive and costs to crime victims. The most significant cost, health benefits and changes in service utilization in however, is in losses to the legitimate economy due to other family members when addiction treatment is ~ro- drag addicts' crime careers. vided. The few studies of collateral cost-offsets indi- cate a very significant benefit of addictions treatment. Only a modest portion of the total cost-of-illness esti- The potential savings are enormous, even larger than mates for addictions are for payments for prevention those accruing from cost-offsets of treated alcoholics and treatment of the illness. In fact, payment for treat- and addicts themselves. ment accounts for only 10% of the overall cost-of- illness spending for alcoholism and for 5% of the cost- Fourth, currently existing assessment and placement of-illness expenditures for drug dependency. instruments are available and evolving to assist in matching patients to appropriate levels of care. The Recent studies of overall health care spending indicate current tendency to favor low cost solutions runs that addiction treatment comprises only 1 - 4% of against a limit: an ineffective treatment, no matter how medical costs. In addition, even with expansion of in- cheap, is no bargain and should not be an element of a surance coverage, utilization of alcohol and drug treat- clinical continuum. ment benefits remains less than I% of the covered population. Fitth, it appears that the costs of addicted individuals assessment followed by placement appears to be sup- impact at the federal, state and local levels and that ported by the research. Many patients can be treated each has much to gain from appropriate treatment. effectively in an outpatient setting, especially those who are non-psychiatric, young, stable, and uncompli- Sixth, there is some evidence that cost offsets in health cated by multiple-drug addiction. On the other hand, care can also be expected when dependencies to drugs thsoe patients who are more severely addicted, may other than alcohol are included. That the largest cost- benefit more from inpatient or residential treatment offsets seen in younger patients - the most likely straightaway. Overall, the only strategy that seems multiple-drug addicted - supports this expectation. completely unsupported by the data is the dogmatic ap- proach to referral, either to inpatient or outpatient. Seventh, the cost-offset research reported out so far is less impressive for the treatment of older patients. But Third, health care cost-offset research from a primary even here, financial savings may be observed in a sta- worksite perspective is almost absent. However, most bilization of high health care costs, rather than in a re- general clinical population studies were conducted uti- duction from pre-treatment levels. lizing the health care records of persons who had their insurance policies as a result of employment. There- Eighth, treatment of addictions is equally positive in fore, the limited specific offset results ofworkforce male and female patients, showing good cost-offset populations, combined with evidence from insured properties that are both pronounced and durable. general clinical population members, demonstrates ex- cellent cost-offset evidence. ADDICTIONS TREATMENT IN WORKFORCE POPULATIONS ADDICTIONS TREATMENT IN CRIMINAL JUSTICE POPULATIONS Seventy percent of those who report current illicit drug use are employed. About 8.2% of wage earners admit AND NARCOTICS USERS to current illicit drug use (24 % when the group at highest risk - young males - is considered alone) and There is almost no socioeconomic research specifically an additional 6.3% of the workforce report heavy on criminal justice populations. There are instead a drinking without other drug use. Thus, nearly 15% of number of extremely large and sophisticated outcome workers report illicit drug use, heavy drinking, or both. studies of drug abuse treatment which indirectly refer Many studies demonstrate the high cost of alcohol and to this population. These studies are generally part of a drug problems in the workforce population. For exam- strong and vital federal research effort. All studies in- ple,