Substance Abuse Treatment Reduces Costs to Society;
Eliminating Substance Abuse Treatment Increases Costs
Michael Dennis, Ph.D.* Christy K Scott, Ph.D.**
and Mark D. Godley, Ph.D.*
Chestnut Health Systems, *Normal & **Chicago, IL
February 22, 2011
Presentation to the Illinois Alcoholism and Drug Dependency Association
www.iadda.org . This presentation uses data collected from Haymarket Center in
Chicago as part of National Institute on Drug Abuse (NIDA) Grant no R37 DA011323,
Chestnut Health Systems under National Institute on Alcohol Abuse and Alcoholism
(NIAAA) grant no. AA 10368 , and data from 148 grant evaluations pooled for
secondary analysis under Substance Abuse and Mental Health Services Administration
(SAMHSA) Center for Substance Abuse Treatment (CSAT) contract no. 270-07-0191.
The opinions are those of the author and do not reflect official positions of the
government. Comments or questions about this report can be addressed to Michael
Dennis, Chestnut Health Systems, 448 Wylie Drive, Normal, IL 61761, phone 309451-7801, fax 309-451-7765, e-Mail: mdennis@Chestnut.Org
Screening & Brief Inter.(1-2 days)
Outpatient (18 weeks)
In-prison Therap. Com. (28 weeks)
Intensive Outpatient (12 weeks)
Adolescent Outpatient (12 weeks)
Treatment Drug Court (46 weeks)
Methadone Maintenance (87 weeks)
Residential (13 weeks)
Therapeutic Community (33 weeks)
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$0
SBIRT models popular due
to ease of implementation
and low cost
$10,000
The Cost of Substance Abuse Treatment is Trivial
Relative to the Costs Treatment Reduces
$407
• $750 per night in Medical Detox
$1,132
• $1,115 per night in hospital
$1,249
• $13,000 per week in intensive
$1,384
care for premature baby
$1,517
• $27,000 per robbery
• $67,000 per assault
$2,486
$4,277
$10,228
$14,818
$22,000 / year
to incarcerate
an adult
$30,000/
child-year in
foster care
$70,000/year to
keep a child in
detention
Source: French et al., 2008; Chandler et al., 2009; Capriccioso, 2004 in 2009 dollars
Investing in Treatment results in a Positive
Return on Investment (ROI)

Substance abuse treatment has an ROI of between
$1.28 to $7.26 per dollar invested.

Consequently, for every treatment dollar cut in
the proposed budget, the actual costs to tax payers
will increase between $1.28 and $7.26.

Bottom line = The proposed $55,000,000 cut will
cost Illinois taxpayers between $70,400,000 and
399,300,000 within the next 1 to 2 years.
Source: Bhati et al., (2008); Ettner et al., (2006)
Unit Costs Used in 2009 Dollars
Description
Inpatient hospital day
Emergency room visit
Outpatient clinic/doctor’s office visit
Nights spent in hospital
Times gone to emergency room
Times seen MD in office or clinic
Days bothered by any health problems
Days bothered by psychological problems
How many days in detox
Nights in residential for AOD use
Days in Intensive outpatient program for AOD use
Times did you go to regular outpatient program
Days missed school or training for any reason
How many times arrested
Days on probation
Days on parole
Days in jail/prison/detention
Days detention/jail
*Quarterly cost to society 2009 dollars
Unit
Days
Visits
Visits
Nights
Times
Times
Days
Days
Days
Nights
Days
Times
Days
Times
Days
Days
Days
Days
Cost in 2009 dollars
$
1,409.69
$
265.52
$
75.59
$
1,409.69
$
265.52
$
75.59
$
25.22
$
9.74
$
254.82
$
149.21
$
102.51
$
276.17
$
18.08
$
2,091.51
$
5.67
$
18.29
$
79.75
$
111.77
Haymarket Clients

As part of NIDA grant R37 DA011323, a cohort of 436
adults sequentially admitted to Haymarket Center in
Chicago were interviewed at intake between February to
March, 2004 and quarterly for 4 years (with over 95%
completion)

In 2009 dollars, clients averaged $3698 in costs to society
in the 90 days before accessing treatment ($15,383 in the
year before intake)

Before entering outpatient treatment, clients incurred
lower quarterly costs when compared to clients entering
long term residential ($2,191 vs. $4,749).

During the year prior to treatment, this cohort of 436
adults cost society $6,707,103. Without treatment, these
costs would have continued.
Quarterly Costs to Society
Change in Quarterly Costs To Society:
Haymarket Center Cohort
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
Treatment costs initially increase costs
Followed by a sustained period of
reduced quarterly costs
Intake
12
24
36
Months from Intake
Source: Dennis & Scott NIDA Grant no. R37 DA011323
48
Cumulative Net Cost to Society
Cumulative Actual Costs Minus Expected
Costs To Society
Over 4 years, cumulative
saving of $14,589 per person
($6,360,804 for 436 person
admission cohort)
$10,000
$5,000
$0
($5,000)
($10,000)
($15,000)
Additional Cost of
Treatment offset by Savings
in other costs within 18
months
($14,589)
($20,000)
Intake
12
24
Months from Intake
Source: Dennis & Scott NIDA Grant no. R37 DA011323
36
48
Cumulative Actual Minus Expected Costs
To Society: Haymarket by Level of Care
Cumulative Net Cost to Society
10,000
All Levels of
Care Produced
Net Savings
5,000
0
STR , -4,542.00
-5,000
-10,000
-15,000
-20,000
-25,000
OP , ($8,552)
Similarly, IOP produced
greater savings that OP
Though the most expensive initially,
long term treatment also produced
the most long term savings
Intake
12
24
36
Months from Intake
Source: Dennis & Scott NIDA Grant no. R37 DA011323
IOP , ($18,433)
LTR , -$21,698
48
Chestnut Health Systems’
Adolescent Residential Clients

As part of NIAAA grant R01 AA 10368 , a cohort
of 355 adolescents were recruited at discharge
between 2004 and 2008 from Chestnut’s residential
treatment programs in central and southern
Illinois and interviewed quarterly for 1 year (with
over 90% completion)

In 2009 dollars, they averaged $6,554 in costs to
society in the 90 days before intake ($26,217 in the
year before intake)

This 4 year cohort of 355 adolescents cost society
$9,307,163 in the year before they were admitted to
Chestnut – costs they would have continued to
incur if they were not treated
Change in Quarterly Costs To Society:
Haymarket Center Cohort
Quarterly Costs to Society
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
Outpatient Continuing Care plus other
Costs Consistently Below Baseline Costs
$0
3
6
9
Months from Intake
* Cost of residential treatm ent
Source: Godley NIAAA Grant no. R01 AA 10368
12
Usual
Continuing Care (UCC)
Usual Continuing Care (UCC)
$10,910
(CM)
UCC + Assertive Continuing Care
UCC+Assertive Continuing
(ACC) Care (ACC)
UCC + CM + ACC
$11,559
$7,876
* Defined as 12 month post discharge costs to society minus 12 month
pre* Cost
intake
coststreatm
to ent
society
of residential
Source: Godley NIAAA Grant no. R01 AA 10368
$14,000
$4,816
UCC + Contingency
Management
UCC+ Contingency
Management
(CM)
UCC + CM + ACC
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
More Intensive Continuing Care
Produced Greater Savings*
SAMHSA/CSAT’s
Clients by Level of Care

As part of SAMHSA/CSAT contract 270-07-0191,
data has been pooled from 22,045 clients from 148
local evaluations, recruited between 1997 to 2009
and followed quarterly for 6 to 12 months (over
80% completion)

In 2009 dollars, the 2,793 adults averaged $1,417 in
costs to society in the 90 days before intake ($5,669
in the year before intake)

In 2009 dollars, the 16,915 adolescents averaged
$3908 in costs to society in the 90 days before
intake ($15,633 in the year before intake)
SAMHSA/CSAT’s Adolescents Clients
by Level of Care
Adolescent Level of Care
Year
before
intake
Year
after
Intakea
One
Year
Savingsb
Outpatient
$10,993
$10,433
$560
Intensive Outpatient
$20,745
$15,064
$5,682
Outpatient Continuing Care
$34,323
$17,000
$17,323
Long Term Residential
$27,489
$26,656
$833
Short Term Residential
$25,255
$21,900
$3,355
Total
$15,633
$13,642
$1,992
\a Includes the cost of treatment
\b Year after intake (including treatment) minus year before treatment
SAMHSA/CSAT’s Adult Clients
by Level of Care
Adult Level of Care
Year
before
intake
Year
after
Intakea
One
Year
Savingsb
Outpatient
$12,806
$9,241
$3,565
Intensive Outpatient
$15,263
$15,197
$ 66
Outpatient Continuing Care
$34,057 $14,310
Residential
$19,443 $24,297 ($4,854)c
Total
$17,035 $12,442
$19,748
$4,592
\a Includes the cost of treatment
\b Year after intake (including treatment) minus year before treatment
\c Cost of residential treatment is not offset yet at one year after intake
These Analyses Provide Converging
Evidence That

Substance Abuse Treatment Programs serve individuals who are
costing society a great deal. Eliminating treatment will NOT eliminate
costs associated with substance abuse….We will pay.
The proposed $55,000,000 cut will cost Illinois taxpayers between
$70,400,000 and 399,300,000 within the next 1 to 2 years.

The cost of treatment is offset by total savings to society within 6
months to 3 years post-intake and produce cumulative benefits that
continue to grow for many years.

While providing more intensive treatment and continuing care costs
more in the short run, it also produces the greatest benefit in the long
run to tax payers.
Conversely This Suggests That..


Cutting substance abuse treatment will likely
increase total costs to Illinois taxpayers via
increased costs associated with healthcare, welfare
and incarceration
Focusing on the least expensive and/or intensive
treatment options to reduce short term costs will
significantly reduce the long term benefits.
References





Bhati et al. (2008) To Treat or Not To Treat: Evidence on the Prospects
of Expanding Treatment to Drug-Involved Offenders. Washington, DC:
Urban Institute.
Capriccioso, R. (2004). Foster care: No cure for mental illness. Connect
for Kids. Accessed on 6/3/09 from
http://www.connectforkids.org/node/571
Chandler, R.K., Fletcher, B.W., Volkow, N.D. (2009). Treating drug
abuse and addiction in the criminal justice system: Improving public
health and safety. Journal American Medical Association, 301(2), 183190
Ettner, S.L., Huang, D., Evans, E., Ash, D.R., Hardy, M., Jourabchi, M.,
& Hser, Y.I. (2006). Benefit Cost in the California Treatment Outcome
Project: Does Substance Abuse Treatment Pay for Itself?. Health
Services Research, 41(1), 192-213.
French, M.T., Popovici, I., & Tapsell, L. (2008). The economic costs of
substance abuse treatment: Updated estimates of cost bands for program
assessment and reimbursement. Journal of Substance Abuse Treatment,
35, 462-469