Investigating variation in the costs and benefits of addiction treatment: econometric analysis of the Chicago Target Cities Project

Abstract

Several studies have proposed methods for estimating the economic costs and benefits of addiction treatment. However, little information is available on the client and treatment characteristics that contribute to treatment costs and benefits. This study analyzed a sample of treatment clients from the Chicago Target Cities Project to develop estimation techniques and to determine predictors of treatment cost, benefit, and net benefit. The Chicago Project was a quasi-experimental evaluation study of individuals ( N=2,862) in various addiction treatment facilities. The economic analysis component was conducted in two stages. First, previously published methods were employed to estimate cost and benefit during the 6-month follow-up. Subsequently, these measures were used to compute average cost, benefit, net benefit, and the benefit-cost ratio. Second, the distributions of cost, benefit, and net benefit were statistically examined, and empirical models were selected for handling non-normal data. These models were subsequently estimated to identify the predictors of cost, benefit, and net benefit. Results indicate that the average (per client) cost of all treatment services from baseline to follow-up was $1943. The average treatment benefit was $8268, leading to an average net benefit of $6325 and a benefit-cost ratio of 4.26. Furthermore, findings from a robust regression suggest that: (1) age, race, age at first drug use, treatment modality, and some treatment characteristics were significantly related to treatment cost, and (2) education, age at first drug use, some ASI scores, some types of treatment, and resistance to continuing care were related to treatment benefit and net benefit. In conclusion, for the average individual, the net benefit (benefit-cost ratio) of treatment was significantly greater than zero (one). Furthermore, cost and benefit were significantly related to certain client and program characteristics. Future studies may find these empirical models useful when investigating the predictors of the costs and benefits of addiction treatment.