Benefit–Cost in the California Treatment Outcome Project: Does Substance Abuse Treatment “Pay for Itself”?


  • Susan L. Ettner,

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    • Address correspondence to Susan L. Ettner, Ph.D. Division of General Internal Medicine and Health Services Research, David Geffen School of Medicine at UCLA, 911 Broxton Plaza, Room 106, Box 951736, Los Angeles, CA 90095-1736. David Huang, Dr.Ph., Elizabeth Evans, M.A., Mary Hardy, C.Phil., and Yih-Ing Hser, Ph.D. are with the UCLA Integrated Substance Abuse Programs, Los Angeles, CA. Danielle Rose Ash, doctoral student, is with the Division of General Internal Medicine and Health Services Research, David Geffen School of Medicine at UCLA, Los Angeles, CA. Mickel Jourabchi is at 5118 Newcastle Avenue, Encino, CA 91316.

  • David Huang,

  • Elizabeth Evans,

  • Danielle Rose Ash,

  • Mary Hardy,

  • Mickel Jourabchi,

  • Yih-Ing Hser


This article is corrected by:

  1. Errata: Erratum Volume 41, Issue 2, 613, Article first published online: 9 March 2006


Objective. To examine costs and monetary benefits associated with substance abuse treatment.

Data Sources. Primary and administrative data on client outcomes and agency costs from 43 substance abuse treatment providers in 13 counties in California during 2000–2001.

Study Design. Using a social planner perspective, the estimated direct cost of treatment was compared with the associated monetary benefits, including the client's costs of medical care, mental health services, criminal activity, earnings, and (from the government's perspective) transfer program payments. The cost of the client's substance abuse treatment episode was estimated by multiplying the number of days that the client spent in each treatment modality by the estimated average per diem cost of that modality. Monetary benefits associated with treatment were estimated using a pre–posttreatment admission study design, i.e., each client served as his or her own control.

Data Collection. Treatment cost data were collected from providers using the Drug Abuse Treatment Cost Analysis Program instrument. For the main sample of 2,567 clients, information on medical hospitalizations, emergency room visits, earnings, and transfer payments was obtained from baseline and 9-month follow-up interviews, and linked to information on inpatient and outpatient mental health services use and criminal activity from administrative databases. Sensitivity analyses examined administrative data outcomes for a larger cohort (N=6,545) and longer time period (1 year).

Principal Findings. On average, substance abuse treatment costs $1,583 and is associated with a monetary benefit to society of $11,487, representing a greater than 7:1 ratio of benefits to costs. These benefits were primarily because of reduced costs of crime and increased employment earnings.

Conclusions. Even without considering the direct value to clients of improved health and quality of life, allocating taxpayer dollars to substance abuse treatment may be a wise investment.