Rising health care costs in recent years have increased pressures on providers, insurers, and policymakers to monitor the costs, cost-effectiveness, and cost-benefit of all health care services, including alcohol-related services. Without solid information regarding the economic implications of alcohol-related services, health insurance companies, managed care organizations, and policymakers may be reluctant to fund these services. As reviewed in this article, economic analyses--such as cost, cost-effectiveness, and cost--benefit analyses, including cost-offset studies--have been applied to alcoholism treatment outcomes research to provide such information. Methodological issues discussed here that concern these approaches will shape the future direction of economic analyses in the alcohol field. KEY WORDS: health services research; alcoholism treatment services research; health care costs; social and economic cost of AODU (alcohol and other drug use); treatment cost; AODU cost estimation problem; cost-effectiveness of AOD health services
Alcohol abuse and dependence as well as less severe alcohol-related problems are associated with significant social costs. For example, in 1998 the social costs of alcohol abuse and dependence were estimated to be $184.6 billion (Harwood 2000). Although alcohol-abusing drinkers and their families bear some of these costs (e.g., medical and legal costs), the non-abusing population also bears costs related to the adverse social consequences of problems such as alcohol-related motor vehicle crashes, crime, and increased health care costs. Because of these enormous societal costs, alcoholism (1) is a major concern among policymakers and researchers.
Traditionally, policymakers and researchers in the alcohol field have focused much of their attention on the effectiveness of treatment. However, in recent years managed care organizations have placed increasing emphasis on cost containment, which requires that these treatments also be cost-effective, thereby necessitating greater use of economic analyses of these services. To investigate the role of such economic analyses, the National Institute on Alcohol Abuse and Alcoholism's (NIAAA's) National Advisory Council formed a Subcommittee on Health Services Research. In its report to the Advisory Council, the Subcommittee noted that studies on the cost and cost-effectiveness of alcoholism treatments are essential to ensuring that people with alcohol-related problems receive appropriate care and recommended that future research should compare the costs of alcoholism treatment programs with their outcomes and benefits (Subcommittee on Health Services Research 1997).
In light of the heightened need for and emphasis on understanding the economic value of alcoholism treatment services, researchers increasingly are conducting economic evaluations of these services. This article presents an overview of economic analysis methods that currently are applied to alcohol services research, such as cost analysis, cost-effectiveness analysis, and cost--benefit analysis, including cost-offset studies. For each type of analysis, an overview of standard methods is provided, and their advantages and disadvantages are briefly discussed. The article concludes with a discussion of the methodological issues shaping the future direction of economic analyses in alcohol research.
METHODS OF ECONOMIC ANALYSIS
In the alcohol field (as in other medical areas), the economic evaluation of health interventions involves three interrelated types of analyses, which are described further in the following sections:
* Cost analyses, which estimate the resources used to deliver alcoholism treatment services and the monetary value of those resources to various stakeholders (e.g., society, treatment providers, or government funding agencies).
* Cost-effectiveness analyses (CEAs), which are used to compare two or more treatment alternatives (one of which may be a no-treatment baseline) in terms of both costs and effectiveness. …