Effectiveness and Cost-effectiveness of Four Treatment Modalities for Substance Disorders: A Propensity Score Analysis

Alcohol and substance use are common and affect the lives of many Americans. Approximately 14 million Americans currently abuse illicit drugs and a similar number abuse alcohol (Substance Abuse Chartbook 2001; Grant et al. 1994). Estimating the overall cost of substance disorders is difficult since these disorders impact not only the lives of the individual substance abusers and their families, but also the communities in which they live. One estimate puts the figure for the overall cost to the U.S. economy at about $414 billion a year (Substance Abuse Chartbook 2001). Only a small fraction of the total cost of substance abuse—about $12 billion a year—is directly spent on treatment of these disorders (Substance Abuse Chartbook 2001). The rest includes productivity losses due to premature death and disability and the cost of criminal activities to society. Although there is good evidence that, at a societal level, treatment of substance abusers is more cost-effective than enforcement efforts to reduce substance supply (Rydell, Caulkins, and Everingham 1996), policymakers often ask for evidence of effectiveness and cost-effectiveness for specific treatments. A number of such cost-effectiveness studies have been conducted (Barnett and Swindle 1997; Barnett 1999; Flynn et al. 1999; Harwood et al. 1995; Holder et al. 1991; Pettinati et al. 1999; Schinka et al. 1998; Shepard, Larson, and Hoffman 1999) and excellent reviews of this literature have been published (French 1995; Cartwright 2000). A principal conclusion from many of these studies is that more intensive treatments are not necessarily more cost-effective than the less intensive alternatives (Annis 1986; McLellan et al. 1983; McCrady et al. 1986; Schinka et al. 1998). While effectiveness across modalities appears to be similar, outpatient care is generally less expensive than inpatient care. Many of the past studies, however, excluded clients with previous treatment failure, multiple drug use, history of homelessness, and psychiatric comorbidity. These exclusion criteria limit generalizability. Furthermore, these exclusion criteria limit our ability to examine the common assumption that the more severe and complicated cases may respond better to intensive treatments. In the present study, we assess effectiveness and cost-effectiveness of treatment of substance disorders in usual treatment settings, addressing some of the limitations of previous studies. The data for this study come from the Services Research Outcomes Study (SROS; Substance Abuse and Mental Health Services Administration 1998), which is the first large-scale national study that drew a stratified random sample out of a pool of more than ten thousand enumerated drug treatment facilities across the nation. In contrast to previous economic studies using national data (Harwood et al. 1995; Flynn et al. 1999), we focus on direct clinical outcomes of substance abuse treatment, rather than reduction in criminal activity. Furthermore, in our comparison of treatment modalities we employ propensity score analysis to control for the factors that influence selection into various modalities, such as type and severity of substance disorder and psychiatric comorbidity. Measures of effect are based on a five-year follow-up, hence addressing one of the major limitations of previous economic analyses—that is, follow-up periods that are too brief (Sindelar and Manning 1997). Finally, successful outcome was measured in two ways, as abstinence and as any reduction in use. To our knowledge, the present analysis is the first attempt at a comprehensive cost-effectiveness study of substance abuse treatment programs based on a large sample of clients from a nationally representative sample of facilities.