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14 TREATMENT COSTS, BENEFITS, AND COST OFFSETS: PUBLIC POLICY CONSIDERATIONS The purpose of this chapter is to assess the current state of research in the area of costs and cost-benefit analysis of alcoholism treatment. The chapter also deals with associated public policy issues such as insurance coverage for alcohol treatment. These issues have implications for a number of public health policy concerns including cost containment, appropriate utilization of medical care services, and efficient resource allocation. The criteria most commonly used to analyze health policy issues have been those that measured changes in the potential of the system to cure disease. In the last 20 years, however, a counterinfluence has developed that embodies an equally single-minded perspective in health policy analysis: the exclusive use of economic criteria. Neither of these approaches is sufficient to deal with the complexities of most relevant issues and especially with the policy questions that surround the costs of insurance coverage for alcohol treatment. Distinctions can be made among treatment effects, benefits, and efficiency. The committee presents here an approach originally proposed by Freeborn and Greenlick (1973), which requires the simultaneous assessment of treatment effectiveness and efficiency (Greenlick and Colombo, 1977~. TREATMENT ELEL;CIIVENESS, BENEFITS, AND EFFICIENCY Effectiveness (sometimes referred to as treatment outcome or quality of care) requires measurement against stated goals, or possibly against generally accepted goals. This measurement has two dimensions because goals may be defined from the viewpoint of the system or of the client or provider. Technical effectiveness measures the extent to which the technical goals of the system are met; determining technical effectiveness involves measunng-how well different treatment modalities achieve treatment goals. Several examples of research issues that relate to technical effectiveness are whether adequate numbers of patients are treated, given the resources available; whether inpatient treatment "works" better than outpatient treatment; and which specific ingredients of treatment improve outcome. ' How well a particular treatment meets the psychological or social needs of the patient population involves an assessment of psychosocial effectiveness. In assessing such effectiveness, it is necessary to consider not only patients and their satisfaction but questions of equity (i.e., fairness in the receipt of care) and access. Traditionallv. cost-effectiveness analyses "are used to evaluate the relative cost of alternative treatments per unit of effectiveness (Saxe et al., 1983~. They have addressed such issues as how many dollars per unit of outcome change the treatment costs, or how costly one treatment modality is in comparison with another. Cost-benefit analyses consider the number of dollars' worth of benefit created per dollar of program cost or per dollar of investment made to create the benefits. Benefits are primarily defined in terms of monetary values placed on indicators of reduced alcohol impairment, for example, job performance or earnings, or reduced numbers of catastrophic events (e.g., motor vehicle crashes and -289

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arrests). Costs are economic and are limited mainly to medical care costs, a limitation that produces underestimation of the true expense of alcohol abuse and the cost savings of reducing it (rein, 1984~. Efficiency involves the assessment of costs for the total input needed to produce the required services for a population of given charamenstics. In this way, costs can be assessed for health care systems under alternative conditions. In evaluating the relative efficiency of health care alternatives, the production function (the relationship between output and factor inputs) is examined, at least implicitly. An estimate of the production and cost function may permit the identification of a more efficient mix of services and resources. This method of examining treatment effectiveness and efficiency has at least two advantages. First, it indicates interrelationships among criteria. For example, a policy alternative, such as mandating health insurance coverage for alcoholism treatment, could be assessed as having a positive effect on one dimension and a negative effect on another. Second, this approach allows decision makers to identity possible tradeoffs; when other parties are presenting subjective analyses or are failing to identity problems in other dimensions of care. The following represent opportunities for research on treatment effectiveness: · How do questions of effectiveness, including patient satisfaction and efficiency, interact in alternative treatment modalities and treatment programs? There is a particular need for studies that provide simultaneous measurement of effectiveness, satisfaction, and efficiency. METHODOLOGICAL APPROACHES TO POLICY ANALYSIS Public policy research can take a variety of forms. For the purposes of this review, the committee distinguishes among policy analysis, meta-analysis, demonstrations, and clinical trials. Policy analysis entails a review of what is known about a particular area in order to consider systematically all policy alternatives. Fein's 1984 monograph, which uses data from a variety of sources to assess the usefulness of insurance coverage for alcohol treatment, is an example of policy analysis in the alcohol field. Fein concludes that enhancing insurance coverage is an appropriate public policy solution. Several large cost-of-illness studies of alcohol abuse have been conducted (Berry and Boland, 1977; Parker et al., 1987), yet good cost-henefit analyses of alcoholism treatment have been rare. Hero exceptions are the Air Force study (O'vis et al., 1981) and the JWK Corporation study of NIAAA-funded alcoholism treatment centers (ATCs) (NIAAA, 1976~. These two studies offer a comprehensive look at a range of costs and benefits of treatment. They provide guides to the assumptions and estimation methods used in evaluating treatments. More studies like these are needed to answer questions such as the following: What other costs besides total health care costs are reduced by successful alcoholism treatment? What other benefits accrue besides benefits to the third-party insurer, health -290

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maintenance organization (HMO), or provider -in the forum of reduced utilization costs? Of particular importance is the study of the costs of alcoholism to other family members, work, neighbors, and communities. Meta-analysis is a form of scientific inquiry that is useful in fields in which more classical research approaches have been unable to provide answers. A study by Tobler (1986) of the outcome of 143 adolescent drug prevention programs indicates how Meta-analysis can be used in formulating alcohol policy. Meta-analysis weights differentially the information produced by imperfect studies so that each study influences the policy debate in proportion to the scientific value of its findings. Scientific value is quantitatively defined on a prior basis according to methodological considerations. Although Meta-analysis can be useful when properly applied to a series of studies with common outcome measures, the lack of commonly accepted and standardized measures of outcome makes its use somewhat problematic in cost-effectiveness analyses of treatment for alcohol abuse. The use of professional judgments to rate individual studies and to make assessments (even by using explicit criteria) for a Meta-analysis may introduce the same bias as the use of more qualitative assessment techniques. Traditional reviews of the scientific literature require a succession of subjective decisions, each of which may be hidden from the reader and each of which affects conclusions. Meta-analysis makes this process more accessible but is also subject to bias. Clinical trials are the traditional tool for evaluating treatment in biomedical science. In the area of alcohol treatment policy, clinical trials are difficult because they require the random selection of patients and their random assignment to treatment and nontreatment groups. Ethical and legal concerns may obviate their use. However, a number of well-controlled quasi-experimental studies have been conducted to evaluate treatment outcome. These studies explicitly ask what types, durations, and combinations of treatment produce a better outcome. The types of clients that are best solved by a particular treatment are also examined (McCrady et al., 1986~. Most studies do not include data on the costs of treatment, but those that do indicate that outpatient care or partial hospitalization is less expensive than extended inpatient treatment, at least over the short term (see the research summaries by Miller and Hester, 1986; Holder, l9g7~. These reviews suggest that the cost-effectiveness of treatment can be maximized if less costly treatment is used, provided patients are appropriately matched or selected (Longabaugh et al., 1983; Longabaugh and Beattie, 1985; McCrady et al., 1986~. A burden-of-proof argument has been suggested for more costly treatment alternatives. This argument states that, given equal effectiveness, a higher cost treatment should be used only with specific justification. A major methodological issue is determining which component of treatment works best and whether observed outcome changes are indeed treatment effects, especially after several years have elapsed. Naturalistic studies offer a contrast to studies that randomly assign subjects to different types of treatment. Both types of research are meritorious if designed carefully. Typically, naturalistic studies report high success rates, but the samples in such studies are highly selective. On the other hand, random assignment does not solve the problem of selectivity because refusals and dropouts affect the randomness of the treatment effects that are seen. The attrition rates (cases lost to follow-up) are frequently high enough in these studies (averaging 30 to 50 percent) to cause problems in the interpretation of posttreatment changes (McCrady et al., 1986~. Study designs need to incorporate efforts to account for, locate, and obtain outcome data on subjects who are lost through refusal, mortality, and migration. Separating the effects of different treatment -291

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modalities is a major challenge, as is the inclusion of the cost of treatment as a central variable in alcoholism treatment evaluations. The following are opportunities for research in the methodology of policy analysis: · Systematic policy analyses are needed in the area of costs and cost-effectiveness of alcohol treatment. Study designs that include cost of treatment as a central variable should be encouraged. · More evaluation of the meta-analysis approach is needed. · Study designs that include sustained efforts to locate lost subjects should be encouraged. THE COST OFFSET EPE FOCI' Cost offset is defined as The reduction in total health care costs adjusting for the costs of alcoholism treatment attributed to the treatments (Holder and Shachtman, 1987~. The costs here are confined to treatment costs, and the effects are limited to reduced medical care utilization, which is sometimes measured in terms of cost savings (Holder, 1987~. Cost offset ideally involves a process whereby the total posttreatment health care costs (including alcoholism treatment) incurred by treated alcoholics are subtracted from the total health care costs the same group would have incurred if no alcoholism treatment had been received. However, estimates of costs in the absence of treatment are difficult to obtain. A question of critical interest is the extent to which coverage for alcoholism treatment stimulates the use of such treatment services, thereby improving the patient's condition and reducing the patient's overall use of other medical services. This question outlines both an effectiveness and an efficiency issue in the health insurance field because the cost per unit input is reduced if there are offsetting savings in other treatment areas. If sufficient cost offset can be documented, the opposition to including coverage for alcoholism treatment among insurance benefits will be less justified. The Results of cost offset studies suggest, with some exceptions, that (1) overall medical care costs of alcoholic patients are significantly higher than those of matched nonalcoholic controls or comparison populations; (2) medical care utilization and costs incurred by alcoholic patients do decline between the pre- and posttreatment periods; (3) most of the cost savings or reductions in service utilization are the result of decreases in general medical hospitalization (frequency, length of stay, or both); and (4) groups with the highest pretreatment costs experience the largest declines in costs in the posttreatment period (Jones and Vischi, 1979; Holder, 1987~. Cost offset studies of alcoholism treatment can be divided into studies that use units of services as probes for costs, studies that use cost data alone, and studies that include both service utilization and cost data. Most of the early work on offset effects was done in HMOs (Wersigner et al., 1978; Sherman, Reiff, and Forsythe, 1979; Boyajy and Adams, 1980; Plotnick et al., 1982; Putnam, 1982~. This emphasis occurred because of the ability of HMOs to furnish longitudinal data from medical records on utilization of their services. Most of these studies contain no cost data, although they are unique in permitting detailed examination of the effects of treatment on the illness and utilization experience of alcoholics, their family members, and comparison groups. -292

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Assessing costs for outpatient care (in contrast to inpatient care) is difficult, as indicated by the few HMO studies that attempt to compare costs for care before and after alcoholism treatment (Forsythe, Griffiths, and Keiff, 1982; Holder and Hallan, 1986~. In these studies, medical costs are based on fee schedules, and alcoholics are found to be higher cost users than nonalcoholics. The results for family members are similar; however, data for adult and child familiar members are rarely d~saggregated. Differences between studies can result from differences in sample composition or utilization levels. Cost considerations cover a variety of issues, including the charge to patients for service, the payments (if any) on behalf of a patient by an insurance program, and out-of-pocket expenses for the patient. The use of fee or charge data rather than cost data is nearly universal in the few existing studies of cost offset or cost'ffectiveness. One study of cost offset effects illustrates the use of claims data for federal employees with Aetna coverage in a fee-for-service context (Holder and Those, 1986; Holder and Shachtman, 1987~. Charges are seen as surrogate but fairly comprehensive indicators of utilization. However, a measurement problem that may be encountered when using health insurance claims data is unreported medical costs (i.e., claims that are not submitted for insurance payments). Most of the studies reviewed by Holder (1987) used pretreatment/posttreatment or longitudinal designs in which the criteria for including subjects were carefully specified and efforts were made to control for confounding variables. Only one study had fewer than 50 subjects, and most had study groups numbering in the hundreds. None of the studies, however, was a clinical trial with comparison groups randomly selected from the same population as the treated population. The studies used relatively long pretrial periods (generally more than 12 months) but usually short posttreatment periods (12 months). In none of the reviewed studies was there a nontreatment control group. In the studies in which there was randomization to different forms of treatment, no significant difference in medical care cost reduction could be discerned. Holder concluded that different alcohol treatment settings may be equally associated with reductions in total health care costs. Cost offset studies suffer from the absence of an explanatory model and from methodological problems similar to those in other health care research. The first relevant question is whether reduced demand for care following treatment is real or artificial, that is, whether the decline can be attributed to the treatment rather than to regression to the mean as has been observed for high utilizers of medical services. The tendency for crisis-oriented medical care visits to peak around intake falsely inflates pretreatment rates and makes posttreatment declines easier to achieve. Adequate statistical control should be employed for regression to the mean. The ~washout" of offset effects over time is also a possibility. Studies of psychiatric offset that have found no overall effect of treatment on utilization have used quarterly intervals and relatively long follow-up periods (Kogan et al., 1975), suggesting that the longer the posttreatment interval, the more the offset effect washes out (Goldberg, Krantz, and Locke, 1970~. This issue is not yet resolved in the alcoholism treatment literature; indeed, some studies suggest greater offset with time (Holder and Hallan, 1986; Longabaugh, 1988~. The issue of substitution is rarely explored in the alcoholism literature, but it has been covered in the psychiatric treatment offset effect literature (Follette and Cummings, 1967; Goldberg, Krantz, and Locke, 1970; Hankin and Oktay, 1979; Kessler, Steinwachs, and Hankin, 1982; Schlesinger et al., 1983; see also Parron and Solomon, 1980~. This substitution is an important area for further research and raises a number of interesting -293

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questions. To what can the decline in medical care utilization or in the costs of medical care after alcoholism treatment be attributed? Are alcoholics substituting mental health or counseling services for medical care services that were used inappropriately before treatment? Are they substituting outpatient for inpatient services? Are demand and need for care simply shifting into different categories and not declining overall? Is the reduced utilization of ambulatory medical care services after treatment simply a result of reductions in certain diagnostic categories (e.g., emotional and psychosomatic disorders, injuries, and other acute conditions)? Similarly, it is necessary to ask whether reduced demand for care among adult and child family members is accompanied by reduced need, that is, greater health. Are family members deferring needs for care to accommodate the alcoholic's crisis and need for attention? Reduced utilization and costs thus may not be an altogether laudable goal if such reductions involve postponed or foregone care in the face of need for care. Appropriate utilization may be the preferred goal. Clearly, an essential question concerns the relative mix of inpatient and ambulatory services (both scheduled and emergency) that constitutes the overall posttreatment decline in utilization for alcoholics and family members. To the extent that posttreatment declines occur in ambulatory utilization, which is largely discretionary for patients, they reflect changes in actual need or in patients' perceptions of the need for care and may, indeed, be indicative of treatment effects. Insofar as such declines are confined to inpatient services, which are largely under the control of physicians or other providers who act as "gatekeepers" to the system, changes may reflect differences over time in HMO or provider policies rather than changes in the need for care from the patient's perspective. Declines in inpatient rates could reflect secular trends rather than treatment effects if calendar dates are used (Putnam, 1982~; however, many cost offset studies use point-of-treatment utilization (Holder and Those, 1986~. The perspective of medical sociologists who have developed models to predict how, why, and when people use medical and psychiatric services would be valuable in attempting to explain complex changes in utilization across time and subgroups (Andersen, 1968; McKinlay, 1972; Wan and Soifer, 1974; Tessler and Mechanic, 1978; Wolinsly, 1978; Andersen and Anderson, 1979; Mechanic, 1979~. Cost-offset studies, like treatment effect studies, are vulnerable to dropouts from the study population, a problem that increases for longer study periods. Well-controlled cost offset studies utilize only those cases for whom there are continuous data over the study period and examine differences between continuous and noncontinuous (dropout) subjects. Putnam (1982), who compared treatment dropouts with patients who have remained in treatment in terms of utilization effects, found that the acceptance of alcoholism treatment was associated with reduced medical care utilization, whereas a lack of acceptance was associated with increased medical care utilization, especially for injuries and other "acute" conditions. Benefit-to-cost ratios for dropouts and those who have remained in treatment were studied by the Orvis research team (1981~; the utilization cost and demooranhioc of both groups were studied by Holder and Those (1986~. , __, ~-~r Actual recovery status in the posttreatment period is a critical variable in cost offset studies. Unfortunately, only one offset study (Hayami and Freeborn, 1981) includes measures of treatment outcome (abstinence measures). A remaining question is whether changes in drinking behavior and alcohol impairment can be linked directly to changes in utilization or costs of services. A related question is whether a small proportion of alcoholics with very high utilization rates account for all of the observed decline in -294

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utilization in the posttreatment period. It is in this respect that cost offset studies require cost effectiveness studies. Holder (1987) conduded that the studies reported in the last decade were characterized by significant methodological improvement compared with earlier studies. He concluded further that the existing methodological shortcomings do not "prevent reasonable (but perhaps cautious) policy statements about alcoholism treatment and health care costs." He reported that As a group, the studies reviewed confirm the potential of alcoholism treatment to contribute to sustained reductions in total health care utilization and costs. Clearly, much research remains to be done, and several areas for such research are suggested by Holder (1987~. The feeling persists that the ideal study would include no-treatment controls. The legal, ethical, and methodological difficulties of locating a randomly selected group of alcoholics from a defined general population and randomly assigning them to treatment and no-treatment conditions are considerable. Yet despite these formidable problems, it is important to develop research that moves as close as possible to true experimental strategies in this area. Several fruitful research possibilities include the need for more information about total health care costs and utilization associated with a variety of sociodemographic factors and the interaction of these factors with alcoholism treatment. As yet no studies have had a sufficient sample size or a sufficiently long follow-up period to permit the complex analyses that are needed to guide public policy. Longer periods of follow-up and better matching designs are required. A methodological problem in longitudinal studies of health care cost offset is the absence of an adequate baseline for comparison. There is a need to match alcoholic patients with nonalcoholic patients on the basis of medical care utilization. Some research compares treatment utilization across a variety of diseases to allow some assessment of the range of pre- and postutilization changes that could be expected. However, using this research may establish a baseline bias in which posttreatment costs for alcoholics are likely to be lower (possibly as a result of regression to the mean) than costs for the comparison group. An alternative strategy would be to develop reliable baseline measures for the age/gender cohort of treated alcoholics. Some researchers argue that the random assignment of patients to treatment is adequate for this purpose (Miller and Hester, 1986~. Unfortunately, some patients' refusal to cooperate with a randomized design, group differentials in dropout rates, and the lack of approximation to an untreated group remain as selectivity biases. Finally, more cost offset studies including both cost and utilization data are needed. Such studies may provide an empirical basis for modeling differences in demands for care in prepaid versus fee-for-service carriers and with various levels of coverage. The following are opportunities for research on cost offset: · Research designs should approximate the use of nontreatment controls, moving as close as possible to experimental strategies. · Studies need to be undertaken to assess the health status of patients after treatment and to determine the relationship between health status and utilization after treatment. · Models must be developed to explain the determinants of medical care utilization so that changes in utilization across time can be better understood. -295

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· Changes in actual drinking behavior and alcohol impairment need to be linked to changes in medical care utilization. · Studies need to include better baseline measures of comparisons of alcoholic versus nonalcoholic samples on prior medical care utilization to allow a clearer assessment of posttreatment change. · Studies should include both cost and utilization data to provide an empirical basis for modeling the utilization phenomena. MANAGED CARE AND PREFERRED PROVIDER RESEARCH ISSUES A new dimension that has increasingly been added to health care benefits is managed care. These cost containment programs have been established by payers (e.g., insurance companies) in direct response to reports claiming that insured persons are subjected to medically unnecessary surgery, psychiatric treatment, and hospitalization. In general, managed care programs provide information to assist in the selection of treatment options, typically through review procedures that scrutinize and specify the conditions under which treatment is to be delivered. Managed care helps to reduce costs to payers by eliminating presumably unnecessar, care. Review procedures include a hospital preadmission review, continued-stay review, mandated second opinion programs, discharge planning, major case management, and alternate service recommendations. The procedures may be managed by a peer review organization, a health insurance company staff, or private case management companies. Although managed care providers have now begun to organize these specialized cost containment services, no research is available to evaluate the effectiveness of these procedures in achieving the goals of providing quality care at reduced costs. Because of this gap, the committee points out several research opportunities. The following are opportunities for research on managed care: ·- Research should be undertaken to evaluate managed care alternatives in treatment for alcohol problems. One approach is to make available specific alternatives (e.g., preadmission review, case management, second opinion programs) to insured populations by using randomized clinical trial methodology with appropriate measures of costs, charges, and outcome. · Research should be encouraged to develop and evaluate scientifically based criteria for assigning clients to appropriate levels and intensities of treatment services. These criteria should be consistent with current scientific evidence and available technologies of assessment, giving appropriate emphasis to the severity of alcohol dependence, medical and psychiatric complications, psychosocial functions, demographic characteristics, and access to treatment (see Chapter 11~. OTHER INSURANCE ISSUES There remain a variety of additional insurance and cost-related research issues. Almost no research has been conducted on the effect of different insurance benefits on entry into treatment, on the selection of a specific treatment modality, on the satisfaction of consumers, and on the ultimate costs of the system. -296

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The cost savings of alternative reimbursement policies for alcoholism treatment services have been studied very little and less successfully than the cost savings reported in the psychiatric offset literature (Follette and Cummings, 1967; Goldberg, Krantz, and Locke, 197~, Goldberg, Refer, and Burns, 1980; Schlesinger, Mumford, and Glass, 1983~. The question of whether broader insurance coverage for alcoholism treatment will reduce medical care spending has led to some comparisons of fee-for-sen~ce systems with prepaid systems, but these comparisons have rarely been based on costs (Edwards et al., 1977; Hayami and Freeborn, 1981; NIA AA, 1981~. Evidence suggests that utilization is higher under a plan with full coverage and no copayment requirement (Hayami and Freeborn, 1981~. There is a great need for research that compares payment sources. Obstacles to this type of research are related to differences in the organization and delivery of care in different systems. Problems involved in estimating units of prepaid service comprise how much overhead and other indirect costs to include, differential costs of treatment by physicians versus nonphysicians, and substantial differences in economic incentives for hospitalization compared with ambulatory care. Prepaid plans are known to be oriented toward short-tenn, outpatient alcoholism treatment, compared with an orientation toward hospitalization in other systems (Miller and Hester, 1986~. One study of the effects of psychiatric care on medical care utilization finds no differences between fee-for-service and prepaid groups that can be attributed to the method of payment; rather, differences are attributed to selection criteria for fee-for-service coverage (Kogan et al., 1975~. Studies of alcoholism treatment effects using this kind of model are needed. Studies with extended pretreatment and posttreatment periods are difficult to conduct in a fee-for-service setting, except in relation to problems severe enough to require hospitalization. This difficulty is largely due to the openness of the system and problems of access to records. Data on family members' utilization are even more difficult to collect. Employer research is a promising area for studies comparing the effects of treatment on utilization by payment source. Companies, especially large ones, represent the kind of relatively closed system needed for such research. Employee assistance programs provide an opportunity to answer research questions on the costs and effectiveness of certain treatments. Cost-saving measures that can be studied, particularly in instances in which the company has a medical department, include the causes of absenteeism for sickness (or injury), average sickness or accident benefits paid, wage and salary information on job retention and earnings, and personnel record data for monitoring changes in work performance (Kurtz, Googins, and Howard, 1984~. Insurance coverage for alcoholism services can be structured in many ways. An assortment of services can be covered under insurance, including inpatient detoxification, residential treatment, partial hospitalization, extended or long-term care, and outpatient care. However, in the past, alcoholism treatment services have generally been excluded from coverage or covered under sharply limited mental health treatment services. As these services have been added more recently to health insurance coverage, different combinations of services have been included in different circumstances. Much research is needed to determine the effectiveness and particularly the cost-effectiveness of the structure of insurance coverage, especially when the benefit package is mandated. Controlled assessment of state-mandated health insurance coverage for alcoholism treatment is essential because this issue is currently a significant policy concern, with strong positions being taken by health insurance carriers and alcoholism treatment providers. -297

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An important research question is the extent to which alcoholism coverage induces people to accept needed services that would not otherwise have been utilized. Epidemiological catchment area studies (Shapiro et al., 1984) show that the prevalence of alcohol, drug, and mental disorders is considerably greater than the number of people who seek care for these problems. In general, people who use privately insured alcoholism treatment programs tend to be white. middle-a~ed males of higher than average ~nrri~1 Hilly . educational attainment, and occupational status. Critical research questions include the identification of barriers to care and the cost factors that affect the nature of the population that is served. These questions bear on efficiency, technical effectiveness, and psychosocial effectiveness, as well as on the issue of equity. The effect of differential insurance coverage has been the subject of two studies. A 1981 HMO study at Kaiser-Permanente in Portland, Oregon (Hayami and Freeborn, 19813, examined the effect of coverage on the use of alcoholism treatment services. The study used a randomized design in which employee groups with a total of 110,000 members were randomly assigned to two categories. One group was given a new benefit package that included total coverage for detoxification and outpatient treatment services. The other group retained the coverage they had, a 50 percent copayment benefit for alcoholism treatment services. The full coverage group was significantly more likely to use alcoholism treatment services than the 50 percent copay group, but there was no difference between the groups in the utilization of medical care services in the posttreatment period. The full benefit group tended to be slightly more improved than the 50 percent copay group. The study supports the feasibility of adding outpatient detoxification and outpatient treatment services to an HMO coverage package. The most recent study of how cost sharing affects the utilization of specialized treatment services was the Rand health insurance study (Manning et al., 1986~. This study, which dealt only with mental health and not with alcoholism treatment services, used a randomized design and enrolled more than 5,800 people. The study found that subjects who needed to pay a large portion of the first-dollar costs of services had less than half the ~ . _ , ~ _ · . · . - ~ . profanity or using mental health services than those whose insurgent ~v`~.r~. Girl Or the total costs of the services. . ~. ~. .... . it- r~~ However, this study cannot easily be generalized to a~no'~sm treatment. wnat Is needed is research that focuses on coverage, utilization, and costs, carefully correlating these with outcomes and the nature of the population using the services. Hornbrook (1988), among others who have reviewed the equity implications of differential coverage of services for alcohol, drug, and mental (ADM) conditions compared with coverage for other conditions, has suggested that this differential represents discrimination against persons who need care for ADM disorders. Research on the potential effects of this discrimination is in order. The following are additional opportunities for research concerning health insurance: · Studies are needed to investigate the relationship between payment source and type and the effectiveness of the treatment received. · Studies examining differences between treatment patterns in fee-for-service systems and in managed care systems need to be expanded. These studies should have relatively long follow-up periods and use sophisticated follow-up techniques. · Employee assistance programs provide an excellent opportunity to study alcohol insurance effects. With appropriate safeguards, the records of such programs should be made available for objective research. -298

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· Priority should be assigned to studies of groups that are frequently excluded in this area, in particular, the uninsured, the unemployed, youth, women, and minorities. · State-mandated health insurance coverage for alcoholism treatment should be carefully analyzed. · More systematic studies are needed of the effect of insurance coverage and cost factors on the utilization of alcoholism treatment services. OTHER COST-RELATED RESEARCH AREAS One important policy question concerns the role that should be played by public and private financing for alcoholism treatment. Increased private expenditures for treatment (either through insurance or through direct pay mechanisms) may result not in private but rather in public cost offsets. These offsets could be seen as increased productivity, which affects taxes, and decreased public expenditures for criminal justice and motor vehicle accidents. This type of research differs from previous research efforts in that it is closer to cost-benefit studies than to cost offset studies. Two types of research are appropriate. First, systematic policy analysis can help illuminate many public policy questions. Second, it is necessary to initiate long-term, population-based studies. Extending research support beyond catchment area studies to long-term work in other populations (e.g., employees and insured populations) would be quite useful. Little has been done to determine the relative efficiency of alternative modes of treatment or to link formative work on the technical effectiveness of treatment modes with the costs of these treatments. The only way that the efficiency of alternative treatment modes can be assessed is by determining the relative success rate of different treatments and by linking costs of treatment to success rates. This may require a series of microanalyses. COST, INSURANCE, AND PUBLIC POLICY RESEARCH NEEDS SPECIFIC TO ADOLESCENTS Adolescent - alcohol and drug abuse problems are receiving increasing attention from policymakers. These problems result in extensive individual and social costs and have a significant impact on the medical care system. The abuse of alcohol or drugs may affect physical health and the development of coping abilities. The use of alcohol is correlated with the abuse of other substances as well as with behavioral problems. The leading causes of death among persons aged 15 to 24 years are accidents, homicides, and suicides. Many of these deaths are related to alcohol and drug abuse. Health insurance plans, including HMOs, are under increasing pressure to expand benefits and services for the treatment of alcohol and drug abuse among adolescents. Unfortunately, there is little or no information on which to base decisions about coverage or the types of services that should be provided. This is partly because data are not available on utilization and costs because most plans do not provide coverage for an appropriate array of services for adolescents (e.g., outpatient, intensive outpatient, partial hospitalization, inpatient). Only a few studies have examined the effectiveness of treatment. The literature contains little on the effectiveness of treatment for adolescents with drug and alcohol abuse problems (Jones and Vischi, 1979; Friedman and Beschner, 1985), but it does provide some insight into the treatment needs of these young people (Sells and Simpson, -299

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1979) and their response to treatment. Most of these studies are descriptive and do not address the relative effectiveness of different approaches to treatment (Jellinek, 1960; Vollmer, 1982; Vaillant et al., 1983; Westermeyer and Peake, 1983~. Using data from a sample of 27,000 drug-abusing youth who participated in publicly funded programs, Sells and Simpson (1979) reported significant life-functioning improvements four to six years after treatment. Klinge, Lennox, and Vaziri (1977-1978) questioned two groups of adolescents six months after discharge from a psychiatric ward and attempted to measure differences in functioning. One group consisted of adolescents with emotional problems but without drug involvement; the other group consisted of those with substance abuse problems. The substance-abusing group was found to be using drugs more than the first group, but both groups were functioning better after discharge. Herrington, Riordan, and Jacobson (1981) conducted one of the few studies that compared two different Apes of treatments. One adolescent group was treated in a mixed (adolescent/adult) chemical dependency unit and was selected retrospectively for research purposes. The other group was prospectively chosen for a newly designed chemical dependency treatment unit that only treated adolescents. Both treatments were residential. It was concluded that the adolescent-only group setting was more effective in teens of certain outcomes (participating in Alcoholics Anonymous or Narcotics Anonymous, returning to school, association with non-drug-using peers) and diminished likelihood of arrest, but that there was little association between the specialized adolescent program and improved quality of life or use of alcohol or drugs. These adolescent treatment studies use outcome measures that are different from those used in studies of adults. School attendance, legal problems, and other age-specific measures were the outcomes most frequently considered. However, there are some adolescent developmental issues that need to be examined and that require a longitudinal approach. For example, Donovan, Jessor, and Jessor (1982) conducted a 10-year follow-up of youthful drug abusers. They reported that a majority of the adolescents reverted without treatment to a lower level of involvement with drugs and alcohol. Such studies have been used to raise many questions regarding appropriate and cost-effective treatment approaches for the chemically abusing, dependent adolescent. T3pe and length of treatment, matching client- to treatment, involvement of the family, and the best ways to keep patients in some form of aftercare are all important issues (Spiegel and Mock, 1978; Filstead and Anderson, 1983~. Finally, as reviewed in Chapter 10, results based on samples of adults indicate that a less intensive approach to treatment (e.g., outpatient) may often be as effective as a more intensive approach (e.g., residential). This type of information does not exist for samples of adolescents (Jones and Vischi, 1979~. The following are opportunities for research on issues in the utilization of adolescent treatment for alcohol problems: · The factors that may influence adolescents' use of treatment services for alcohol and drug abuse should be studied, as should the relationship between the utilization of treatment seduces and the need for care. · The insurance issues relative to adolescent care should be studied; for example, how does variation in copayment rates and levels of benefits affect the utilization of treatment services? · The extent to which treatment for alcohol and drug abuse affects subsequent general medical care utilization and costs for adolescents and their families must be adequately investigated. -300

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OTHER PUBLIC POLICY RESEARCH NEEDS The above discussion leads into the final area of research needed in public policy. Very little research has been conducted in the area of consumer and patient attitudes toward alcoholism treatment and the relationship of these attitudes to the probability of accepting and completing treatment. This research is necessary not only to allow proper understanding of the dynamics of the treatment process but also to provide the proper alternatives in policy debates. For example, it is not understood how much the availability of a full range of alternative modes of treatment affects the probability that a patient will accept any treatment. There Is also insufficient information on how different modes of treatment are selected by the patient (Finney, Moos, and Mewborn, 1980~. Knowledge of patient attitudes and desires cannot be ignored if program planners are to design interventions that are both effective and efficient. The following are opportunities for research on public policy: · Long-term population-based studies should be developed. Cohorts from employee and insured populations should be found to allow studies of the population dynamics of alcoholism treatment and costs. · Studies should be undertaken to explore consumer attitudes toward alcoholism treatment and the relationship between these attitudes and the probability of completing treatment. REFERENCES Andersen, R. A Behavioral Model of Families' Use of Health Services. Research Series No. 25. Chicago: Center for Health Administration Studies, University of Chicago, 1968. Andersen, R., and O. W. Anderson. Trends in the use of health services. Pp. 371-397 in H. E. Freeman, S. Levine, and L. G. Reeder, eds. Handbook of Medical Sociology. Englewood Cliffs, NJ: Prentice-Hall, 1979. Berry, R. E., Jr., and J. P. Boland. The Economic Cost of Alcohol Abuse. New York: The Free Press, 1977. Boyajy, T. G., and K M. Adams. Alcoholism treatment programs within prepaid group practice HMOs: An update. Washington, DC: Group Health Association of America, 1980. Collins, T., and M. Lute An evaluation of the Fairview Deaconess Hospital Adolescent Chemical Dependency Program. Unpublished manuscript, Fairview Deaconess Hospital, Minneapolis, MN, 1983. Donovan, J. E., R. Jessor, and L. Jessor. Problem Drinking in Adolescence and Young Adulthood: A Follow-up Study. Publ. No. 184. Boulder, CO: Institute of Behavioral Science, University of Colorado, 1982. -301

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Edwards, D., S. Bucky, P. Cohen et al. Primary and secondary benefits from treatment for alcoholism. Am. J. Psychiatry 134~6~:682-683, 1977. Fein, R. Alcohol in America: The Price We Pay. Newport Beach, CA: Care Institute. 1984. Filstead, W. J., and C. L. Anderson. Conceptual and clinical issues in the treatment of adolescent alcohol and substance mix-users. Child and Youth Services 6~1-2~:103-116, 1983. Finney, J. W.. R. H. Moos. and C. R. Mewborn. Posttreatment experiences and treatment outcome of alcoholic patients six months and two years after hospitalization. J. Consult. Clin. Psychol. 48:17-29, 1980. Follette, W., and W. ~ Cummings. Psychiatric services and medical care utilization in a prepaid health plan setting. Med. Care 5:25-35, 1967. Forsythe, ~ B., B. Griff~ths, and S. Keiff. Comparison of utilization of medical services by alcoholics and non-alcoholics. Am. J. Public Health 72~6~:600-602, 1982. Freeborn, D. K, and M. R. Greenlick. Evaluation of the performance of ambulatory care systems: Research requirements and opportunities. Med. Care 11:68-75, 1973. Friedman, A, and G. Beschner. Treatment Services for Adolescent Substance Abusers. Washington, DC: National Institute on Drug Abuse, 1985. Goldberg, I. D., G. Krantz, and B. Z. Locke. Effect of a short-term outpatient psychiatric therapy benefit on the utilization of medical services in a prepaid group practice medical program. Med. Care 8:419-428, 1970. Goldberg, I. D., D. ~ Regier, and B. J. Burns, eds. Use of health and mental health outpatient services in four organized health care settings. In Mental Seattle Service System Reporter. USDHHS Publ. No. (ADM)80-859. Rockville, MD: National Institute of- Mental Health, 1980. Greenlick, M. R., and T. J. Colombo. A framework for assessing the impact of health policy alternatives. Pp. 53-59 in Papers on the National Health Guidelines: Conditions for Change in the Health Care System. Washington, DC: U.S. Government Printing Office, 1977. Hankin, J., and J. S. Oktay. Mental Disorder and Primar, Medical Care: An Analytical Review of the Literature. NIMH Series D, USDHEW Publ. No. (ADM)78-661. Washington, DC: National Institute of Mental Health, 1979. Hayami, D. E., and D. K Freeborn. Effect of coverage on use of an HMO alcoholism treatment program, outcome, and medical care utilization. Am. J. Public Health 71~10~:1133-1143, 1981. Herrington, R. E., P. R. Riordan, and G. R. Jacobson. Alcohol and other drug dependence in adolescence: Characteristics of those who seek treatment, and outcome of treatment. Currents in Alcoholism 8:253-267, 1981. -302

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Holder, H. D. Alcoholism treatment and potential health care cost savings. Med. Care 25~1~:52-71, 1987. Holder, H. D., and J. O. Those. Alcoholism treatment and total health care utilization and costs: A four-year longitudinal analysis of federal employees. J. Am. Med. Assoc. 256~11~:1456-1460, 1986. Holder, H. D., and J. B. Hallan. Impact of alcoholism treatment on total health care costs: A six-year study. Advances in Alcohol and Substance Abuse 6~1~:1-15, 1986. Holder, H. D., and R. H. Shachtman. Estimating health care savings associated with alcoholism. Alcoholism Clin. Exp. Res. 11~1~:66-72, 1987. Hornbrook, M. C. Mental health services in HMOs: An oxymoron? Administration in Mental Health. 15~4~:23~245, 1988. Jellinek, E. M. The Disease Concept of Alcoholism. New Haven, CT: College and University Press, 1960. Jones, K R., and T. R. Vischi. Impact of alcohol, drug abuse and mental health treatment on medical care utilization: A review of the research literature. Med. Care 17:1-82, 1979. Kessler, L. G., D. M. Steinwachs, and J. R. Hankin. Episodes of psychiatric care and medical utilization. Med. Care 20~12~:1209-1221, 1982. Klinge, V., K Lennox, and H. Vaziri. Follow-up of adolescent drug abusers and nonusers previously hospitalized in an inpatient psychiatric facility. Drug Forum 6~2~:143-151, 1977-1978. Kogan, W. S., D. J. Thompson, J. R. Brown et al. Impact of integration of mental health service and comprehensive medical care. Med. Care 13:934-942, 1975. Kurtz, N. 1~., B. Googins, and W. C. Howard. Measuring the success of occupational alcoholism programs. J. Stud. Alcohol 45~1~:33-45, 1984. Longabaugh, R. Longitudinal outcome studies. Pp. 267-280 in R. M. Rose and J. E. Barrett, eds. Alcoholism: Origins and Outcome. New York: Raven Press, 1988. Longabaugh, R., and M. Beattie. Optimizing the cost effectiveness of treatment for alcohol abusers. Pp. 104-136 in B. McCrady, N. E. Noel, and T. D. Nirenberg, eds. Future Directions in Alcohol Abuse Treatment Research. Washington, DC: NIAAA, 1985. Longabaugh, R., B. McCrady, E. Fink et al. Cost effectiveness of alcoholism treatment in partial vs. inpatient settings: Six-month outcomes. J. Stud. Alcohol 44~6~:1049-1071, 1983. Manning, W. G., K B. Wells, N. Duan et al. How cost sharing affects the use of ambulatory mental health services. J. Am. Med. Assoc. 256:1930-1934, 1986. -303

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McCrady, B., R. Longabaugh, E. Fink et al. Cost-effectiveness of alcoholism treatment in partial versus inpatient settings after brief inpatient treatment: 12-month outcomes. J. Consult. Clin. Psychol. 54(5):708-713, 1986. McKinlay, J. Some approaches and problems in the study of the use of services: An overview. J. Health Soc. Behav. 13:115-152, 1972. Mechanic, D. Correlates of physician utilization: Why do major multivariate studies of physician utilization find trivial psychosocial and organizational effects? J. Health Soc. Behav. 20~4~:387-396, 1979. Miller, W. R., and R. K Hester. Inpatient alcoholism treatment: Who benefits? Am. Psychologist 41~7~:794-805, 1986. National Institute on Alcohol Abuse and Alcoholism. Benefit-Cost Analysis of Alcoholism Treatment Centers, vole. 1 and 2. Prepared for NtAAA by the JWK International Corporation. NTIS (PB-253419~. Springfield, VA: National Technical Information Service, 1976. National Institute on Alcohol Abuse and Alcoholism. Health insurance coverage for alcoholism treatment. USDHHS Special Selection. Alcohol Health Res. World 54:2-4, 1981. Onis, B. R., D. Armor, C. Williams et al. Effectiveness and Cost of Alcohol Rehabilitation in the United States Air Force. A Project Air Force Report (R-2813-AF). Santa Monica, CA: Rand Corporation, 1981. Parron, D. L., and F. Solomon, eds. Mental Health Services in Primary Care Settings. DHHS Publ. No. (ADM)80-995. Washington, DC: Government Printing Office, 1980. Parker, D. L., J. M. Schultz, L. Gertz et al. The social and economic costs of alcohol abuse in Minnesota, 1983. Am. J. Public Health 77~8~:982-986, 1987. Plotnick, D. E., K M. Adams, K R. Hunter et al. Alcoholism Treatment Programs Within Prepaid Group Practice HMOs: A Final Report. Washington, DC: Group Health Association of America, 1982. Putnam, S. Short-term effects of treating alcoholics for alcoholism on their utilization of medical care services in a health maintenance organization. Group Health J. 3~1~:19-30, 1982. Saxe, L., D. Dougherty, K Esty et al. The Effectiveness and Costs of Alcoholism Treatment. Health Technology Case Study No. 22, Washington, DC: U.S. Congress, Office of Technology Assessment, 1983. Schlesinger, H. J., E. Mumford, V. Glass et al. Mental health treatment and medical care utilization in a fee-for-service system: Outpatient mental health treatment following the onset of a chronic disease. Am. J. Public Health 73~4~:422-429, 1983. -304

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Sells, S. B., and D. O. Simpson. Evaluation of treatment outcome for youths in the Drug Abuse Reporting Program (DARP): A follow-up study. Pp. 571-628 in G. M. Beschner and ~ S. Friedman, eds. Youth Drug Abuse. Lexington, MA: D.C. Heath, 1979. Shapiro, S., E. Skinner, ~ Kessler et al. Utilization of health and mental health services. Arch Gen. Psychiatry 41:971-978, 1984. Sherman, R. M., S. Reify, and A. B. Forsythe. Utilization of medical services by alcoholics participating in an outpatient treatment program. Alcoholism Clin. Exp. Res. 3:115-120, 1979. Spiegel, R., and W. L. MocL A model for a family systems theory approach to prevention and treatment of alcohol abusing youth. Presented at the National Council on Alcoholism conference In St. Louis, MO, May 1978. Tessler, R., and D. Mechanic. Factors affecting children's use of physician services in a prepaid group practice. Med. Care 16~1~:33 46, 1978. Tobler, N. S. Meta-analysis of 143 adolescent drug prevention programs: Quantitative outcome results of program participants compared to a control or comparison group. J. Drug Issues 16~4~:537-567, 1986. Vaillant, G. E., W. Clark, C. Cyrus et al. Prospective study of alcoholism treatment: Eight year follow-up. Am. J. Med. 75:455 463, 1983. Vollmer, H. Pp. 417434 in P. Golding, ed. Alcoholism, A Modern Perspective. Richmond, NJ: G. ~ Bogden, 1982. Wan, T., and J. S. Soifer. Determinants of physician utilization: A causal analysis. J. Health Soc. Behav. 15~2~:100-108, 1974. Wersinger, R., J. Roberts, K Roghmann et al. The inpatient hospital and ambulatory utilization experience of an alcoholic population compared to a matched control group within an HMO. In Proceedings of the 28th Annual Group Health Institute, New York, June lX-21, 1978. Washington, DC: Group Health Association of America, 1978. Westermeyer, J., and E. Peake. A ten-year follow-up of alcoholic Native Americans in Minnesota. Am. J. Psychiatry 140~2~:189-194, 1983. Wolinsky, F. D. Assessing the effects of predisposing, enabling and illness morbidity characteristics on health services utilization. J. Health Soc. Behav. 19~4~:384-396, 1978. -305

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III SUPPORT FOR SCIENTIFIC PROGRESS IN THE PREVENTION AND TREATMENT OF ~COHOL-RELA=D PROBLEMS -307

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INTRODUCI ION Exploiting the opportunities delineated in the preceding pages requires a scientific infrastructure adequate to the task. Part III concludes the committee's discussion of research opportunities in the prevention and treatment of alcohol problems with a consideration of the infrastructural elements necessary to support such efforts. Chapter 15 examines federal support for the scientific infrastructure for prevention research, and Chapter 16 explores similar issues for treatment research. -308