Costs and Effectiveness of Substance Abuse Treatments For Homeless Persons

Joseph E. Schumacher, Stephen T. Mennemeyer, Jesse B. Milby, Dennis Wallace and Kim Nolan

June 2002

This study presents a cost analysis of two randomized controlled studies comparing four drug addiction interventions for homeless persons. The studies controlled for some limitations of previous research in this area including random assignment. Findings are based on treatment costs obtained from actual expenditures and treatment outcomes of drug abstinence from toxicology tests. Cost-effectiveness is considered from the viewpoint of the treatment program. Cost-effectiveness from a societal viewpoint is discussed, but not calculated. When only the direct costs of programs and their abstinence rates are considered, treatments that involve abstinent contingent work and housing have incremental cost ratios that are within the range of many other common social and medical interventions. These enhanced programs are more cost effective earlier in treatment than at 12-month follow-up due to relapse common among existing drug treatment. Usual and improved treatment methods offer a cost-effective approach to improving abstinence among addicted homeless persons. Policy makers might reasonably choose to implement enhanced treatment programs that also reduce homelessness because the incremental cost of these programs is within a reasonable range compared to other common societal interventions.

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