The economic benefits of treatment exceed the costs of treatment, and the cost-benefit ratio shows that every dollar spent on care results in $7 dollars in benefits (Ettner et al., 2006; Gerstein et al., 1994; Roebuck et al., 2003; McCollister and French, 2003).
A study of the economic benefits and costs of treatment for alcohol and drug disorders estimated that the average cost of care was $1,583 per individual and the economic benefit of care was $11,487; thus, the benefit to cost ratio exceeded 7:1 ($11,487/$1,583) (Ettner et al., 2006). The study used data from the California Treatment Outcome Project (CalTOP) and included 2,567 individuals from 43 treatment programs located in 13 California counties. A similar 7:1 benefit to cost ratio was found when the California Drug and Alcohol Treatment Assessment Program (CalDATA) was examined a decade earlier (Gerstein et al., 1994). Although the studies differed in terms of the time when they were conducted and in terms of the patients used for the study, the similar findings suggest that the 7:1 benefit to cost ratio can be used by policymakers as a reliable estimate.
Economic analyses require detailed estimates of the costs of providing treatment services. A review of cost data from 85 drug abuse treatment programs found that costs varied widely (within and between levels of care) (Roebuck et al., 2003) and the mean costs were higher than the estimated cost in the CalTOP analysis (Ettner et al., 2006). California programs, moreover, tended to have shorter durations of treatment (Ettner et al., 2006). The mean benefit to cost ratio, therefore, may be less than 7:1 when the cost of care is greater. Estimates of total economic benefits include costs associated with increased productivity, reduced criminality, and reductions in medical costs. The most consistent and most substantial economic benefit is the avoided cost of criminal activity (McCollister and French, 2003). It is noteworthy that the increase in wages in the CalTOP study also exceeded the cost of care. Cost avoidance, is therefore not the only source of the economic benefits.