1. 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

2. Two starting points
A story
A mystery
Nick Heather
US situation

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

4. 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

5. 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

6. Participating patients and medical centers
Over 3 million patients diagnosed with SUD from
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
Not a cohort study

7. Data analysis
Gargamel and Azrael

8. 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

9. Key results

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

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

12. Exception: OAT

13. Subsidiary analyses
Sensitivity analyses
Lagged analyses

14. 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

15. 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