Matching Treatment to Patient Needs in Opioid Substitution Therapy Treatment Improvement Protocol (TIP) Series 20
Chapter 6 -- Cost-Effectiveness of Opioid Substitution Therapy
1
Alcohol and other drug (AOD) abuse is the Nation's number one health problem, accounting
for assignificant portion of the increase in healthcare expenditures. The
total economic cost of substance abuse to the U.S. economy each year is staggering,
with estimates ranging in excess of $238 billion (Institute
for Health Policy, 1993). This total includes the direct cost of treatment
as well as the opportunity costs or societal costs associated with substance
abuse (for example, costs due to lost productivity, illness, and criminal activities).
In 1994, expenditures by Medicaid and Medicare on hospital claims due to AOD
abuse and dependence are estimated to reach $27.4 billion. Substance abuse treatment
can greatly reduce healthcare costs. It can also greatly reduce costs associated
with crime.
This chapter provides a brief discussion of recent studies showing the effectiveness
of AOD abuse treatment. An overview of studies measuring the cost-effectiveness
of treatment is presented, and the difficulty of designing and conducting
research on costs of treatment is discussed. Four methods that have been used to
estimate treatment costs are presented, and estimates of the costs of methadone
treatment are given. Cost elements that should be collected routinely in order to
do a comprehensive and accurate cost analysis are listed. The chapter also
includes a brief discussion of the various ways that benefits have been measured.
The methods used by New York and Massachusetts to determine costs of their
opioid substitution therapy services are presented, and the advantages and disadvantages
of these methods are discussed.
The phased model of treatment presented in Chapter 3
can be helpful in making decisions about resource allocations, and the
chapter includes a discussion of the types and levels of resources needed during
each phase.
For readers who are interested in cost research, Appendix C presents several
methodological approaches to consider in designing research that might enhance the AOD
treatment field's knowledge base.
One factor that must be emphasized when evaluating the cost-effectiveness of
opioid substitution therapy is that the target population is chronically and persistently
ill. Chronic illness usually is associated with increased costs per patient.
Outcomes in this population are defined differently; other treatment modalities
may define positive outcome as the successful completion of treatment and the
ability of the patient to remain clean and sober. When evaluating overall effectiveness,
a sophisticated approach must be used that addresses the actual delivery
of services per patient rather than a narrowly defined outcome.
One factor that must be emphasized when evaluating the cost-effectiveness of
opioid substitution therapy is that this population is chronically and persistently
ill. Chronic illness is usually associated with increased costs per patient.
In addition, interprogram cost comparisons are rarely true indicators of quality
or effectiveness, mainly because there is so much variability among programs
and because appropriate psychiatric and medical services are often unavailable
onsite. Comparisons are sometimes used by insurers to force providers into lower
levels of service delivery, whereas providers should be encouraged to augment
and enhance their services. The cost benefit has to be aligned with the long-term
improvement of the chronic patient and his or her needs for a range of services. In
this sense, it may be effective to compare costs to treat a patient in opioid
substitution therapy with the costs of treating the same patient in a different modality,
or to refer patients out to several systems (medical, psychiatric, and AOD
treatment systems) simultaneously. It may be appropriate for a cost-per-patient
rate in a specific region to be used to prevent providers from being discouraged
from delivering comprehensive services.
As this Treatment Improvement Protocol (TIP) was being prepared for publication,
results of an important long-term study on the effectiveness of AOD abuse treatment
were published (California Department of Alcohol and
Drug Programs, 1994). The 2-year California Drug and Alcohol Treatment
Assessment (CALDATA) study followed a rigorous probability sample of the nearly 150,000
persons who received AOD abuse treatment in California in 1992. The sample included
patients in a spectrum of treatment modalities, including patients in continuing
methadone treatment. The cost of treating the approximately 150,000 participants
in 1992 was $209 million, while the benefits received during treatment and
in the first year afterwards were worth approximately $1.5 billion.
Thus, for every dollar spent on treatment, more than $7 in future costs were
saved. These savings were largely in relation to reductions in criminal activity
and in the number of hospitalizations for health problems. For a smaller sample
followed through the second year, results have indicated that projected cumulative
lifetime benefits of treatment will be substantially higher than the shorter term
benefits.
The CALDATA study found that, from before to after treatment, criminal activity
declined by two thirds and hospitalizations by one third. Declines of about two
fifths also occurred in the use of alcohol and other drugs from before to after
treatment was received. Treatment for problems caused by the use of major stimulant
drugs (crack cocaine, powdered cocaine, and methamphetamine), which were all
in widespread use, was found to be just as effective as treatment for alcohol
problems and somewhat more effective than treatment for heroin problems. No differences
in treatment effectiveness were found by gender, age, or ethnic group.
In addition to the recent data from California, a substantial body of evidence
has been accumulated on the effectiveness of alcohol and other drug treatment
programs (Anglin and Hser, 1990;Young, 1994). The National Association of State Alcohol and Drug Abuse Directors
(NASADAD) has recently compiled a report that summarizes studies performed in 15
States on the effectiveness of AOD treatment (Young,
1994). Studies examined the effects of treatment on health status, workers' productivity,
and criminal behavior. These studies found decreases in hospitalizations ranging
from 36 percent in California to 66 percent in Ohio. States averaged an increase
of more than 70 percent in the number of persons who were employed after treatment.
The proportion of persons who were arrested after treatment dropped dramatically;
Iowa showed a 50 percent decrease, and Ohio a 90 percent decrease.
Tremendous variability exists in the types, duration, and costs of treatment. For
example, the CALDATA study reported costs per day of treatment in various modalities.
The average treatment lasted 95 days (excluding continuing methadone clients).
The treatment costs per day were residential, $61.47; social model, $34.41; outpatient drug free, $7.87; methadone continuing, $6.37; and methadone
noncontinuing (primarily opiate detoxification), $6.79.
Treatment outcomes vary widely among programs, even among programs that deliver the
same types of services. However, studies such as the CALDATA study that have
examined a wide range of treatment alternatives, including methadone treatment,
have shown that opioid substitution therapy programs have outcomes similar to
those of other types of treatment programs. The exception is programs offering
detoxification alone, which typically show no long-term benefits.
However, because the positive effects of treatment often dissipate quickly after
the patient leaves the treatment setting, substance abuse treatment may be
cost effective only for those who remain in treatment for a substantial time
(Anglin and Hser, 1990). Because substance
abuse is a chronic condition associated with high recidivism or relapse rates,
the findings of cost-effectiveness studies of particular programs are difficult
for policymakers to evaluate.
In the last several years, demands for greater treatment capacity for persons
with alcohol and drug disorders have increased at the same time that State governments
and private insurers have implemented cost constraints. This situation has
led to a proliferation of studies on the cost-effectiveness of treatment programs.
In 1991, the National Institute on Drug Abuse published its first technical
review on substance abuse financing and services research (National Institute on Drug Abuse, 1991). Included in that publication was a
review of the current status of cost-effectiveness analyses (Apsler and Harding, 1991), which cited the difficulties of analyzing cost-effectiveness
data. The review pointed out the absence of consensus regarding a definition
of substance abuse and dependence, the lack of clarity concerning the goals
of treatment, and the differences in interventions used by various programs
that employ the same treatment modality. For example, different outpatient
methadone programs use different interventions; interventions also differ among outpatient
drug-free settings, therapeutic communities, and detoxification programs.
In a review of studies on cost and cost-effectiveness, French and associates (in press) found that most studies used different cost
accounting methods, making the results difficult to compare.
The most frequently mentioned studies on the cost-effectiveness of substance
abuse programs are those of Harwood and colleagues
(1984),Hubbard and associates (1989), and McGlothlin and Anglin (1981b). The findings from these studies support the premise
that substance abuse programs have been both cost beneficial to the client in
treatment and cost effective in terms of AOD treatment service delivery. In all
of these studies, the monetary value of "benefits" to individuals who receive
substance abuse treatment has been based on aggregate data, which are then used to
estimate individual costs. For example, the cost of crime for each subject is estimated
based on national figures developed from the U.S. Department of Justice and the
Bureau of Justice Statistics Reports.
Harwood and colleagues (1988) used data from
the Treatment Outcome Prospective Study (TOPS) to examine the monetary consequences
of substance abuse with respect to crime. TOPS is a longitudinal survey of
11,000 drug abusers in 10 cities, a survey which used a cost methodology developed
by Harwood and others (1984). Using national
statistics, the methodology estimated dollar costs for three kinds of drug-related
crime -- victim costs, criminal justice system costs, and crime career or productivity
costs. Using a pre-post study design, criminal activity in the year before and
the year after treatment was assessed for patients in residential, outpatient
methadone, and outpatient drug-free programs. The results showed that the average
benefit per day for all treatment modalities exceeded the average cost of treatment
per day.
The benefit of reduction in criminal activity of those who are opioid addicted
is directly tied to length of stay in a treatment program. In a study of
six methadone maintenance clinics by Ball and Ross
(1991), the average length of patient stay was 4.5 years. When patients dropped
out of treatment, most relapsed to drug abuse within 1 year, often returning
to previous criminal patterns to support the addiction.
Hubbard and associates (1989) analyzed the costs
of 41 substance abuse treatment programs for 11,000 individuals who entered
selected programs between 1979 and 1981. Clients in three major treatment modalities
were assessed: 1) outpatient methadone maintenance, 2) therapeutic community,
and 3) outpatient drug-free programs. Study participants were interviewed
at admission, 3 months, 1 year, 2 years, and 3 to 5 years after leaving treatment.
The authors concluded, based on self-reports of the clients, that treatment
resulted in substantial decreases in the abuse of both opioid and nonopioid drugs.
However, very few patients achieved the goal of abstinence. Based on
participant interviews, Hubbard and colleagues also found a substantial reduction in
crime-related costs. Investigators concluded that these reductions were "at least as
large as the cost of providing treatment, with much of the expenditure recovered
during the time the drug abuser was in treatment."
In McGlothlin's and Anglin's study (1981b)
of the effects of closing a methadone maintenance program, the social costs
incurred in a community where a program was closed were compared with the costs
in a comparison community where a drug treatment program continued to operate.
Rough estimates were obtained for the costs of treatment, arrest and court
processing, jail, probation, forgery, robbery, and welfare. The overall results showed
that for males, mean annual costs per subject in the community with the closed
program were approximately 17 percent higher than those in the comparison community.
The majority of cost-effectiveness studies of substance abuse treatment have
used one of the following methods, described by French
(in press), to estimate the cost of drug treatment programs:
Method 1. Identification and summation of all funding sources as an estimate
of program costs (National Drug and Alcoholism Treatment
Unit Survey [NDATUS], 1993). Although, in a perfect world, revenues should
equal expenditures, many resources in these programs may be donated or shared,
resulting in an underestimation of real operating costs.
Method 2. Calculation of expenditures minus avoided costs or benefits. This
is a cost-benefit approach that estimates program treatment costs (including
the costs to patients, such as transportation, day care, and so forth) and
subtracts the monetary benefits associated with treatment, such as reduced welfare
payments, increased wages, and reduced incarceration. Estimates of social benefits
such as criminal activity are frequently based on self-reports from participant
interviews.
Method 3. Calculation of program operating costs with no adjustments for
economic costs, such as costs of volunteers, donations, start-up capital costs,
opportunity costs, and so forth.
Method 4. Financial accounting models using fixed costs, such as capital
and depreciation costs, and variable costs, such as those for personnel, supplies,
and operating costs. Average cost per client and incremental or marginal costs
can be estimated from these data.
In a recent study comparing the cost-effectiveness of standard versus enhanced
methadone programs (Bradley et al., 1994; French, in press), a costing methodology developed at Research Triangle Institute (1993) and based on standard accounting procedures
was implemented. Using the approach described in method 4, cost data were
collected using an instrument known as DATCAP (Research
Triangle Institute, 1993), a lengthy cost worksheet that is personally administered
by researchers at the program site. The cost methodology focuses on "program
cost," as opposed to client or reimburser's cost. Cost information is gathered
from budgets, audit reports, expense reports, and other documents, with the
costs of shared or donated resources based on market value estimates. Costs
are subsequently grouped into categories, such as buildings and equipment,
rent and maintenance, labor, contracted services, and other variable costs.
These program cost estimates, based on 1990 dollar figures, resulted in an average
annual treatment cost per client for standard methadone treatment of $12 per day
or $4,002 annually, which is double the amount Harwood
and associates (1988) estimated based on 1979 figures. Labor, as expected,
was the most costly component, ranging between 43 percent and 59 percent of
total costs. The estimates by French (in press)
are similar to figures derived from the National
Drug Services Research Survey (1990); a median cost per slot for "all" types
of drug programs was estimated to be $4,600 per year (Horgan, 1991). Opioid substitution therapy is generally thought to be the
least expensive treatment modality, although people generally remain in opioid
substitution therapy programs longer than in outpatient drug-free treatment. However,
it should be kept in mind that costs differ for different treatment modalities
and cost comparisons across modalities should be viewed with caution.
One of the major obstacles in drawing valid conclusions about the cost effectiveness
or cost benefit of substance abuse treatment programs is the failure of investigators
to use standard protocols such as DATCAP for identifying cost elements, collecting
data, and constructing program cost estimates. Even when cost elements are standardized,
the methods for estimating items such as capital and depreciation costs differ
considerably across programs, resulting in great variability in estimates. Additionally,
programs within a large organization that share resources or use donated or volunteer
services often fail to accurately account for these expenditures. Even after items
are standardized, collected, and categorized, controls or adjustments must
be made for differences across locales in wages, variable demand, program
case mix, and so forth.
The following is a list of cost elements that should be collected routinely
in order to do a comprehensive and accurate cost analysis:
Program Revenue:
Revenues should be categorized by source, for example, Medicaid, Medicare, Department
of Veterans Affairs, self-pay, Federal block grant, State revenues, commercial
insurers.
Program Expenditures:
Full-time equivalent (FTE) staff average salary and fringe benefits, including volunteer
hours
Consultant and or contracted service costs
Building costs (square footage), percentage of building used by program, estimated
rent if donated or shared
Program supply costs
Equipment costs (such as furniture, machinery, and computers)
Pharmacy and laboratory costs
Other costs.
Program Outputs:
Average client caseload, including some measure of case mix
Percentage of staff hours in direct treatment
Program capacity
Types of problems treated (substance abuse, psychiatric, medical, and so forth).
Although a major focus of cost-effectiveness studies is monetary issues, attention
must also be paid to identifying and defining the effectiveness or benefit measures
that result from substance abuse treatment. The least expensive method of treatment
is not always the most cost effective. Since clinical outcomes research has
been a primary focus of the substance abuse research community for decades,
this area is better defined and measured than research in the area of program
costs. Instruments for assessment and patient evaluation have been used extensively
for many years and are found to be reliable.
As long as the outcome indices are measured in the same way and interrater
reliability is ensured, a number of effectiveness indices are appropriate for cost-effectiveness
analyses. The indices most often used in prior studies are level of reduction in
substance use, increase in employment and number of days worked, reduction in criminal
activity and incarceration, and more appropriate use of the healthcare system.
Although no single measure can encompass the total impact of a program intervention,
multiple indices can be examined and used to identify cost-effective programs.
More will be said about the multidimensional nature of the outcomes measures
in the next section.
Despite all of the difficulties associated with cost-effectiveness analyses, there
is no reason why comparable cost and outcomes information on a program level
cannot be collected and used to develop comparable cost-effectiveness ratios.
However, since substantial variability is known to exist among substance
abuse treatment programs with respect to organizational structure, financial
funding streams, manpower mix, cost of care, and efficacy of treatment (Wheeler et al., 1992), the characteristics of cost-effective programs will
have to be examined to determine whether findings can be generalized.
More work must be done on the characteristics of programs and the features or
best practices that foster cost-efficient and cost-effective treatment outcomes.
Studies that investigate the characteristics of programs that provide
clients with adequate care in the least costly manner while controlling for differences
in services and populations treated are at the core of the next research frontier
area. Another TIP in this series, Developing State Outcomes Monitoring Systems
for Alcohol and Other Drug Abuse Treatment, examines issues involved in
determining what characteristics of programs contribute to better treatment outcomes.
Appendix C presents a discussion of several methodological approaches for
readers who are interested in designing and conducting research on costs of treatment.
Chapter 3 of this TIP describes a phased model of
treatment in opioid substitution therapy. When treatment is conceptualized as occurring
in phases, resources can be identified and allocated according to the type
and intensity of services needed during each phase. Knowledge of the distribution
of the patient population in the various treatment phases within an opioid
substitution therapy program is also helpful in making resource allocation decisions.
However, knowledge of the complexity of the patients' associated psychiatric,
medical, social, and family problems is crucial to this decisionmaking. For example,
one opioid substitution therapy program may treat fewer patients than another
program but may need more resources because patients in the program have multiple
associated problems, such as human immunodeficiency virus (HIV) disease or severe
psychiatric problems. Many of the decisions that are made about program resources
depend upon the type and severity of problems presented by the patient population
in treatment.
The acute phase of treatment requires a concentration of resources to achieve
stabilization of the range of problems related to drug use, as well as psychiatric, medical,
family-social, and other problems. Resources needed in these areas during the acute phase
include
Comprehensive medical services:
Laboratory, including urine testing
Increased visits with medical staff (physicians, nurses)
Inpatient hospitalization for medical or surgical procedures
Increased use of pharmacy services.
Increased psychiatric services:
Assessment and diagnosis
Pharmacotherapy
Psychotherapy
Case management.
Increased substance abuse counseling services:
Increased individual time with therapist or counselor
More frequent walk-in or unscheduled appointments
Orientation of patients to the opioid substitution therapy treatment program.
Administrative costs:
Increased recordkeeping by program staff
Increased attention to patient's adjustment to clinic setting and clinic rules.
Other program resources:
Assessment and treatment planning by counselor
An increase in the amount of time spent referring patients to other human
service agencies
Multidisciplinary involvement of program staff, for example, by social workers and psychologists
in preparing referrals and following up on patient's contacts.
The mix and level of medical and psychiatric services needed by patients in
the acute phase varies as a function of the population served. Some patients
are sicker than others and may have a proportionally greater need for ancillary
services, such as assessment and treatment for HIV or tuberculosis (TB). These medical
and psychiatric services frequently include laboratory work and more frequent
visits with physicians and nurses. For the first few days in the acute phase,
patients may require as many as two visits daily with medical staff until the acute
phase or crisis has passed. In addition, the patient is more likely to need
surgical, inpatient hospital, and other acute medical or psychiatric care services
and ancillary medication. Increased counseling services in the acute phase
include more frequent unscheduled appointments.
More time is spent by counseling staff in getting to know patients, orienting
them to the clinic's policies and procedures, reinforcing specific rules, and
managing acute problems and referrals. Developing a sense of trust and working
with the patient to define treatment goals requires spending increased amounts
of time with patients. Increased recordkeeping is also needed in the acute
phase because of the significant amount of documentation required in terms of
methadone dosage adjustments and stabilization of medical and psychiatric conditions.
During the acute phase, a high level of consultation time is sometimes required
with other agencies that provide medical, psychiatric, social, or other services
that may not be available onsite to patients in opioid substitution therapy
programs. Some examples of offsite services are referrals to primary health clinics
that treat patients with HIV or TB, and referrals to housing agencies or mental
health services. Psychosocial assessments may require multidisciplinary involvement
by members of the treatment team, including social workers and psychologists.
Patients with legal or financial problems also may need help managing
their problems in these areas. Time spent on treatment planning and coordinating
responses to a variety of treatment needs during a patient's admission to the program
may be extensive and require input from counseling, social work, legal, and
medical staff, who are not always onsite.
In the rehabilitation phase, efforts should be directed toward continuing
the interventions started during the acute phase at appropriate levels, fine
tuning, and offering an array of adjunctive resources such as education and vocational
training. During this phase, it may periodically be necessary to return to providing
services associated with the acute phase.
More resources must be put into case management in the early part of the rehabilitation
phase to ensure that patients' needs are being addressed in each domain. Weekly
counseling sessions at the beginning of this phase may gradually decrease to twice
a month and eventually to monthly when indicated by the patient's progress
and changing needs. A reduced level of resources in the later stages of the
rehabilitation phase is appropriate, with some services referred out and others provided
onsite as appropriate. However, some patients need ongoing medical, psychiatric,
or other services in all phases of treatment.
Patients in these later phases of opioid substitution therapy treatment, by definition,
do not need intensive contact with treatment staff, although periodic checks
on progress and counseling aimed at sustaining earlier treatment gains are
important. Attention to stable but ongoing medical, psychiatric, family-social, and
other problems should be continued. Exacerbations of the addiction or of one
or more associated problems usually require a return to a more intensive (i.
e., acute or rehabilitation) treatment phase. When intensive treatment is
resumed, patients often respond quickly and are able to return to a less intensive
phase of treatment.
Treatment services typically intensify during tapering, but they vary according to
individual patients' needs. More frequent counseling and supervision such as once
or twice weekly sessions and daily check-ins with a counselor or nurse may
be indicated. In general, however, counseling services are not as intensive
as in the acute phase. Decisions concerning the frequency and intensity of
services must be made according to the treatment providers' clinical judgment.
Ideally, readjustment following completion of detoxification requires an increase
or change in the type of resources to help the patient deal with the many
issues often involved in remaining successfully drug free over an extended period
of time. As stated earlier, patients may choose to enter an inpatient rehabilitation
program at the start of this phase, followed by a more prolonged period of outpatient
followup therapy.
In practice, the use of associated program resources is sometimes minimal
during the readjustment phase. Many patients discontinue clinic visits or contact
with any formal treatment program after they complete tapering. If the patient
remains in contact with the opioid substitution therapy program, the readjustment
phase mainly involves counseling visits, depending on the patient's needs. If
a patient is on continuing adjunctive medication such as naltrexone, weekly
visits (at a minimum) will most likely be needed. If the patient elects to follow
methadone detoxification with a period of intensive rehabilitation, treatment intensity
is likely to be increased for the first 2 to 12 weeks, followed by a less
intense period of treatment and relapse prevention. In such cases, the rehabilitation
treatment is similar to that for persons seeking recovery from addiction to cocaine
or alcohol and, in fact, therapy could be provided in a setting where patients
with all these problems are being treated, rather than in an opioid substitution
therapy program.
The use of a phased model of opioid substitution therapy allows treatment programs
to plan for and cost efficiently allocate resources and to tailor resources
to the needs of specific patient populations. With the full implementation
of the phased model of treatment, it becomes possible to estimate the proportion
of patients within the various phases and allocate resources accordingly.
Each patient's needs, however, rather than the phases themselves, should
dictate the specific course of treatment. The phases should simply facilitate
the natural course of the recovery process.
The full implementation of this phased model within a treatment system may
permit cost sharing of resources during the various phases so that resources are
used in the most efficient manner. For instance, a 24-hour medical facility
may serve as a resource to patients from several opioid substitution therapy
programs that have patients in the acute phase, and a vocational training and education
center may serve as a resource for patients from several programs who are in the
rehabilitation phase. As this model evolves, each component must undergo critical evaluation
from the perspective of patient outcome, cost-effectiveness, and quality improvement
so that its advantages and shortcomings can be clearly documented.
The largest cost component of opioid substitution therapy programs is personnel.
The staffing patterns of methadone maintenance programs may be regulated
either by the State or by contract. These standards are usually expressed in
the number of full-time-equivalent staff members per number of patients in
the program. For example, the number of physicians, registered nurses, pharmacists,
LPNs, and substance abuse counselors may be specified. In addition, overhead
costs of administrative and support service staff, as well as the cost of laboratory,
pharmacy services, and facility maintenance staff are figured into the cost per
patient.
Opioid substitution therapy programs have expanded their scope in order to address
the crises of ill health and poverty that often accompany opioid addiction.
Because of the high incidence of poor health and infectious disease in
injecting-drug-using populations, basic healthcare services are now often provided onsite.
The provision of onsite healthcare services in opioid substitution therapy
clinics has been shown to be a more effective public health intervention than referral
for primary care outside of the clinic (Umbricht-Schneiter
et al., 1994).
Federal Block Grant regulations require opioid substitution therapy programs to
give priority in providing services to certain populations of injecting drug
users (for example, pregnant women) or those at risk of transmitting HIV or TB.
Additional staff for HIV counseling, referral, and treatment are sometimes
hired by substitution therapy programs. Often, these ancillary staff members
are paid through special Federal or State grant funds, which are not figured
into the reimbursement rate for opioid substitution therapy. In addition, opioid
substitution therapy programs are increasingly providing onsite case management of medical
and social services for clients.
New York and Massachusetts provide examples of how costs for opioid substitution
therapy programs are calculated. Each State has a commission or State authority
in charge of rate setting; in New York, the authority is tied to a statewide
healthcare financing mechanism. In Massachusetts, the authority is the Massachusetts
Rate Setting Commission (RSC). Included in RSC's authority is the setting of
rates for substance abuse treatment services that are not acute inpatient services.
New York has enacted Medicaid managed care and employs a Certificate of Need
process that determines rates using a Diagnostic-Related Group (DRG) methodology
in which costs are tied to treatment for a particular diagnosis. New York's
Medicaid rate for opioid substitution therapy services is aggregated. This aggregation
means that the unit cost per patient per week reflects the cost for all services
available to the patient in the program, including the various costs for providing
the methadone dose and the additional costs for providing counseling and other
services.
On the other hand, Massachusetts has an unaggregated rate for opioid substitution
therapy. Under this arrangement, there is one set charge for all services that
are considered to be medical, or connected to methadone dosing, and a second,
separate charge for counseling services.
Currently, the State of New York reimburses methadone treatment providers at $100
per week per Medicaid patient. This rate is based on the following cost elements
Urine drug testing
Dispensing of methadone
Medical supervision of dosing process and ordering laboratory tests
Annual physical examinations
Preparation and monitoring of treatment plans
Maintenance of patients' medical histories
Prescribing methadone dosage
Counseling as prescribed in the treatment plan
Maintenance of records
Physician services, nursing services, therapist services, and technician services
Nutrition services
Health education services
Psychosocial services
Care coordination services (case management).
The Massachusetts Rate Setting Commission currently sets the cost per day per
patient at $9.61 ($67.27 per week). The amount includes costs for all of the medical
service units listed below in calculating a cost per day for providing a dose of
methadone:
Medical assessment, including limited physical examination
Laboratory tests
HIV risk assessment
Medication (dosing)
Medication dispensing
Drug screening
Medical case management
Assessment of client status, treatment planning, and periodic reassessment of treatment
plans
Arranging for primary care, home care, hospitalization, and consultation with other
medical care providers
Interventions for health maintenance and risk reduction, including treatment compliance
counseling and nutrition maintenance, HIV risk reduction, and counseling about other
chronic illnesses.
As described above, Massachusetts has an unaggregated rate, and the cost per
patient for providing outpatient counseling services is calculated separately.
The RSC has set the following rates for various types of counseling service
units. These services are the same as those provided for all other substance
abuse counseling programs:
Individual counseling, $51.08 per hour
Group counseling, $19.88 per hour
Couples/family counseling, $61.32 per hour.
It should be noted that ongoing treatment for psychiatric and medical conditions
by appropriately trained personnel is not part of either reimbursement system.
Were these services to be charged to the programs with onsite delivery
or by close affiliations and networks, the overall costs of the programs would
increase. However, patient compliance increases when these services are readily
available, and overall healthcare costs may decrease because of reductions in emergency
room visits and unscheduled inpatient care.
There are some benefits and drawbacks to the methods used by each State in establishing
the reimbursable rate for opioid substitution therapy services. The aggregate
rate permits smooth functioning of opioid substitution therapy programs, with
no peaks and valleys in funding, while making time services (mainly AOD treatment
services) available to all patients based on need. Including costs for all elements
of treatment in one rate, however, may make it difficult for programs to know
their costs based on a phased treatment model or to cost out the elements of
treatment for patients with particular needs.
An unaggregated reimbursement rate offers much more control for the program
and the State in cost containment. Since budgeting in Massachusetts is based
on capitation, with Federal and State funds folded in, patient mix is the
key to program costs. Programs are able to design a service package for each
client based on budget and contract allocations. With an unaggregated rate, programs
have more flexibility in developing a budget based on a phased approach. Not
every patient will need $4,000 a year, for example, for opioid substitution therapy
treatment. The costs will vary by program and will be based on the patient's needs.
Some patients will need more counseling than others, and therefore one
program may budget for more billing in counseling services than another program.
If a program has more patients in the supportive care phase of treatment,
then counseling costs will probably be less.
Resources for providing effective opioid substitution therapy are limited. In the
national arena, recent debates about healthcare reform have drawn attention to improving
the delivery of all types of healthcare services, including substance abuse
treatment, and to making these services more accessible and more effective while holding
down costs. Increasingly, under managed care, service providers will compete
for resources. Programs must pay detailed attention to costs and to refinement
of the provision of services so that the most appropriate interventions are
provided for each patient. Creating cost-effective programs and matching patients
to treatment services share these goals. An important factor in estimating
costs is determining the costs to the overall healthcare system that can be saved
by delivering readily available psychiatric and medical services. This strategy
is consistent with patient-treatment matching and efficient service delivery.
1. Parts of this chapter were written for the consensus panel by Aileen B. Rothbard, Sc.D., and Arie P. Schinnar, Ph.D., of the University of Pennsylvania. The chapter focuses on cost issues in methadone programs only, since cost-effectiveness research on levo-alpha-acetyl methadol (LAAM) is still being conducted.
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