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Analysis of Cost Benefits

—Albert Woodward, Ph.D., M.B.A. National Institute on Drug Abuse

Methadone maintenance has been the most thoroughly studied of the drug treatment modalities, and studies have demonstrated the clinical effectiveness of this treatment. The costs saved by methadone maintenance treatment have also been the most thoroughly studied of all drug treatment modalities.

Most studies on methadone treatment have involved the analysis of cost benefits. Cost-benefit analysis (CBA) refers to "the ratio of the number of dollars worth of benefit created per dollar of program cost." This type of cost analysis has been generally done for methadone maintenance programs because it is easier to impute dollar benefits and calculate total program costs (CBA) than to estimate marginal improvements in treatment outcomes per added dollar of program costs. This latter type of analysis—called cost-effectiveness analysis (CEA)—refers to "having an additional benefit worth the additional dollar spent on treatment." CEA has rarely been done for methadone maintenance.

One study done in the mid-1970s found a benefit/cost ratio of 4.4 to 1, a ratio that is widely accepted for methadone maintenance. Another study in the early 1980s compared patients who left methadone maintenance when a community clinic was closed in Bakersfield, California, with patients in Bakersfield's other clinic, which remained open. The ratio of benefits from reduced crime to costs of treatment was 1.7 to 1 for men over a 2-year period.

The most comprehensive cost-benefit analysis of methadone maintenance comes from analysis of data obtained in the Treatment Outcome Prospective Study (TOPS) in the late 1970s and the early 1980s. Data collected from a national sample of 10,000 patients in public treatment in the TOPS showed that the benefits justified the costs of methadone maintenance treatment. These benefits included reductions in heroin use and in criminal activity plus improved employment status. The investment in public treatment is recovered substantially during the period when heroin users are in treatment.

Need for new cost studies

The cost studies of methadone maintenance are now a decade old. Although they are valid for methadone maintenance, new problem drugs, such as crack cocaine, and new forms of treatment, such as pharmacological interventions for crack, have come to the forefront of concern in the treatment field. If the investment in treatment modalities other than methadone maintenance is to produce a maximum return, new cost-effectiveness studies must be done. Health services research techniques developed in cost studies for other illnesses must now be applied to the drug treatment field.

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