Cost-benefit analysis of drug treatment services: review of the literature*

BACKGROUND: How valuable is public investment in treatment for drug abuse and dependency in the real world of everyday practice? Does drug abuse treatment provide benefits and how are they valued? What are the costs of obtaining outcomes and benefits? Cost-benefit analysis attempts to answer these questions in a standard analytic framework. AIMS: This paper reviews cost-benefit analyses with scientific merit so that analysts will have a current picture of the state of the research. It will also give public decision-makers information with regards to the available evidence for policy purposes.
METHOD: Bibliographic searches were performed. Studies were obtained through the assistance of the Parklawn Health Library system, a component of the US Public Health Service. Selected studies were from the scientific literature with the exception of eight studies published as governmental reports.
RESULTS: Cost-benefit studies have fallen into the following categories: (i) planning models for delivery systems in states and cities; (ii) short-term follow-up studies of individuals, (iii) single individual programs and (iv) state system's monitoring of outcomes. In 18 cost-benefit studies, a persistent finding is that benefits exceed costs, even when not all benefits are accounted for in the analysis. Much variation is found in the implementation of cost-benefit methods, and this is detailed across discussions of effectiveness, benefits and costs. Studies have emphasized the cost savings to society from the reduction in external costs created by the behavioral consequences of addiction and drug use. DISCUSSION: Economic analysis of drug treatment requires sophisticated conceptualization and measurement. Cost-benefit analysis of drug treatment has been a significant analytical exercise since the early 1970s when the public drug treatment system was founded in the United States.
CONCLUSION: Drug abuse treatment services may be considered as contributing positive economic returns to society. However, considerable work needs to be done to standardize methods used in the studies. A striking area of omission is the absence of studies for adolescents and only one for women in treatment. IMPLICATIONS FOR HEALTH CARE PROVISION AND USE: Finding a positive net social benefit should assist policy-makers with decisions related to drug abuse treatment expenditures. Additional work on allocation of budget dollars across various drug treatment services will be needed. IMPLICATIONS FOR HEALTH POLICY FORMULATION: Government agencies and other stakeholders in national health care systems must realize that cost-benefit studies are an important tool for decision-making. Rational strategies can only be addressed by examining alternatives for the efficient allocation and equitable distribution of scarce resources. IMPLICATIONS FOR FURTHER RESEARCH: Future research should focus on standardizing the methods used in the cost-benefit analysis. Extensions should examine methods related to the willingness-to-pay approach. Studies are needed for drug abuse treatment targeted to adolescents and women. More studies should be published in the scientific literature.