Is it in medical centers’ self-interest to provide substance use disorder treatment?: A cost-consequence analysis in a national health care system Presented at the Society for the Scientific Study of Addiction York, UK 14 November 2008 Funded by the SAPRP program and the VA Keith Humphreys Todd H. Wagner Mistry Gage Veterans Affairs and Stanford University Medical Centers Palo Alto, California USA

Two starting points A story A mystery Nick Heather US situation

The cost-offset literature What it shows What it does NOT show

Basic design Study an integrated national health care system (U.S. VHA) Examine natural experiments in treatment provision Extract data from all SUD-dxed patients in each year of study

Key questions about changes in supply of SUD treatment Change in number of SUD patients Change in where care is received Change in cost of care Perspective is explicitly that of the service provider for both cost and outcomes

Participating patients and medical centers Over 3 million patients diagnosed with SUD from 1998-2006 96% male, average age early 50s Number of patients diagnosed rose from 347k in 1998 to 427k in 2006 125 medical centers throughout U.S. Average medical center decreased spending on SUD specialty care by 30% from 1998-2006 Not a cohort study

Data analysis Gargamel and Azrael

Models Analysis using both fixed effects and random effects models Control for patient age, gender, marital status Control for rural vs. urban medical center, CMS wage index Key independent variable: Change in SUD supply (indexed by spending + OAT) Two models generated the same results, so we use the more conservative fixed-effects models

Key results

For each 1% increase in SUD supply… Outpatient SUD utilization + .025% Inpatient SUD utilization + .034% Outpatient psychiatry utilization - .002% Inpatient psychiatry utilization - .006% Outpatient med/surg utilization +.005% Inpatient med/surg utilization +.0004% Number of SUD patients +.015% Cost per SUD patient +.018% These are all yes/no All refer to SUD-dxed patients

Net cost finding For each 100k spent, a further 29k in added health costs incurred

Exception: OAT

Subsidiary analyses Sensitivity analyses Lagged analyses

Conclusions OAT is a break even proposition for medical centers Other SUD spending costs more than the initial investment Psychiatry and SUD spending are competitors SUD and medical spending are complements

Conclusions, continued The lack of willingness of medical centers to provide SUD is economically rational SUD treatment does not “pay for itself” from the health care system perspective Cost studies would be more policy useful if they were conducted explicitly from the decision makers’ perspective Advocacy may be more effective if it matches the level of the cost-offset Why should treatment have to pay for itself Of course everyone should cooperate