International Journal of the Addictions
ISSN: 0020-773X (Print) (Online) Journal homepage: http://www.tandfonline.com/loi/isum19
A Cost-Benefit Analysis for a Multimodality Heroin Treatment Project Kenneth A. Sirotnik & Richard C. Bailey To cite this article: Kenneth A. Sirotnik & Richard C. Bailey (1975) A Cost-Benefit Analysis for a Multimodality Heroin Treatment Project, International Journal of the Addictions, 10:3, 443-451, DOI: 10.3109/10826087509026727 To link to this article: http://dx.doi.org/10.3109/10826087509026727
Published online: 03 Jul 2009.
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The International Journal of the Addictions, 10(3), 443451, 1975
A Cost-Benefit Analysis for a Multimodality Heroin Treatment Project Kenneth A. Sirotnik,* Ph.D. Department of Urban Affairs University of California L 0s Angeles, California
Richard
C. Bailey,? Ph.D.
Consultant Sociologist Santa Monica, California
The term “cost-benefit analysis” can connote a number of different constructs and procedures depending upon the analysts and the material content with which they are working. The cost analysis to be reported here is not of the highly complex cost-benefit classes of analyses typically requiring the use of theoretical, economic utility models. What we present here is a relatively simple and straightforward arithmetic computation of the amount of money that we anticipate would have been spent had the addicts encountered not been, in fact, treated by the project. We are, of course, making at least one (which we believe to be highly realistic) assumption : the addicts would have continued their drug habit and illegal
* Current mailing address:
1531 Benedict Canyon Drive, Beverly Hills, California 90210.
t Current mailing address: 709 19th Street, Santa Monica, California 90401. 443
Copyright 0 1975 by Marcel Dekker, Inc. All Rights Reserved. Neither this work nor any part may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, microfilming, and recording, or by any information storage and retrieval system, without permission in writing from the publisher.
SIROTNIK AND BAILEY
444
methods of supporting their habit had they not been treated by the project. Before presenting the details of the analysis, however, it is important to describe the nature of the drug project under study.
THE HEROIN TREATMENT PROJECT
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Five different but related drug-treatment modalities were organized into a comprehensive project of community drug abuse treatment with the following very general goals :
1. The primary goal, directly oriented toward the treatment of drug addicts such that they will turn to constructive life styles free of drug abuse. 2 . The additional goal, directed toward the development and testing of a multimodality treatment model designed to meet the needs of a diversified addict population. Specifically, three modalities were located in Venice, California and were operated by community-based organizations; these treatment programs can be briefly described as follows:
Vita. A central intake facility, offering referral and hospital follow-up services, short-term counseling, crisis intervention, and prevention activities for youth groups. 2 . Tuum Est. A drug-free, residential facility offering a longterm therapeutic community environment. 3. Via Avanta. A residential halfway house for new methadone patients offering a short-term transitional therapeutic environment. 1.
The two remaining treatment programs were university-based (UCLANeuropsychiatric Institute) :
Detoxification. A 14-day, drug-supported, inpatient detoxification program offering psychiatric and social service counseling. 5. Methadone Maintenance. An outpatient maintenance program utilizing methadone and offering psychiatric and social service counseling.
4.
The addicts treated by the project came mostly from the Los Angeles
445
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COST-BENEFIT ANALYSIS OF HEROIN TREATMENT
area, many coming from the Venice area, a community having great socioeconomic and ethnic diversity and having long experienced high heroin (and other drug) abuse of epidemic proportions with a corresponding high crime rate. These characteristics were strongly reflected in the demographic and biographic data obtained on the addicts at their point of intake to their treatment programs. Specifically, the present study will be concerned with 285 heroin addicts, treated by the project for 1 day or more over the period of time beginning July 1, 1971 and ending December 31, 1972. Of these clients served by the project, 102 were referrals by Vita to the heroin detoxification program, 103 were Tuum Est residents whose major drug of abuse was heroin, 45 were patients in the methadone maintenance program, and 35 were residents of Via Avanta.
THE COST-BENEFIT ANALYSIS The variables defined in Table 1, although representing only a fraction of the data collected on each addict before, during, and after treatment, constitute the core set of relevant data employed in the basic computations of the cost-benefit analysis. Also included in this table are the basic quantities calculated for each addict on the basis of the indicated variables. Table 2 presents the results of these computations for the addicts in each treatment program and for the total group of 285 addicts. It should be clear that when summed across components, the heroin addicts, immediately prior to project entry, were spending a total of $133,782 per week to support their drug habit (an average of $469 per person). The total number of drug-free “client-weeks’’ accounted for by the project, as of December 1972, both during and after treatment, was 8,641, an average of 30.3 per Table I Variables Used in Cost-Benefit Analysis and Definition of Calculated Quantities ~
Variable
Symbol“
a b
Frequency of heroin use (days/week) Cost (in dollars) of daily use Number of drug-free weeks during treatment Number of drug-free weeks after treatment (as of last follow-up) Proportion of illegally obtained dollars to support heroin use
C
d e
a Definition of quantities. Weekly drug cost (in dollars), ab. Number of drug-free weeks, d. Anticipated (had the addict not been drug-free) drug cost, ab(c d). Anticipated c illegal drug dollars, abe(c d).
+
+
+
P Q\ P
-
Overall project
Vita/detoxification Tuum est Methadone maintenance Via avanta
Treatment program 51,000 44,702 24,570 13,510 133,782
285
Total weekly drug cost (%)
102 103 45 '35 -
Number of cases
835,074 1,176,466 681,030 364,420 3,056.990 3,955,468
8,641
Total anticipated illegal drug dollars
1,077,426 1,472,797 1,017,270 387,975
Total anticipated drug cost ( 5 )
1,999 3,471 2,075 1.096
Total number of drug-free weeks
Table 2 Cost Analysis Data by Treatment Program and Overall Project
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447
client. Cumulating the products of cost per week and number of drug-free weeks on a person-by-person basis, a total anticipated drug cost of $3,955,468 is obtained (an average of $1 3,879 per client). Finally, cumulating the products of cost per week, number of drug-free weeks, and proportion of illegally obtained monetary drug support on a person-by-person basis, a total anticipated illegal number of drug dollars is obtained: $3,056,990 (an average of $10,726 per person). This, then, is the total number of drug dollars which are anticipated to have been illegally obtained had not the addicts been treated by the project. This estimate of $3,056,990, although accurately computed, does not, however, represent a realistic estimate of the dollar benefit to society for at least six reasons. We will consider each of these reasons briefly, indicating how the “raw” estimate must be modified in each case. First, there is some reason to believe that the addicts’ self-reported heroin dollar expenditure, averaging $469 per week (or $67 per day) is exaggerated, especially for programs such as Detoxification and Methadone Maintenance, where the addict often believes that initial methadone substitution levels are determined on the basis of the size of his (or her) heroin habit. There is empirical support for this contention in the Venice/ UCLA project, considering the relatively lower reported cost for Tuum Est and Via Avanta (mean = $60 pel day) as compared with Detoxification and Methadone Maintenance programs (mean = $73 per day). The $60 per day figure compares favorably with other recent, west coast estimates; for example, Lerner et al. (1971) report a $50 per day average for a sample of San Francisco addicts treated between 1969 and 1971-allowing for cost of living increases and inflation due to recent enforcement “crackdowns,” our estimate of $60 per day appears to be quite reasonable. Thus, in comparison to the Methadone Maintenance and Detoxification figure of $73 per day, we estimate an approximate “exaggeration” factor of 18%-that is, we estimate that addicts’ “true” average daily heroin cost may roughly be 18% less than what they actually report. Thus, for purposes of this analysis, we adopt the conservative procedure of reducing the total anticipated illegal drug dollars by 18% for all five components, leaving a modified dollar estimate of $2,506,732. Second, the methods of computing total cost (see Table 1) assume that the addict would have used continuously (daily) for the entire period of time he was, in fact, kept drug-free. As McGlothlin et al. (1972) have pointed out, addicts cannot generally maintain steady, daily usage, particularly at the relatively high levels reported by addicts in this project. They conclude, after reviewing the literature (particularly Cushman, 1971)
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SIROTNIK AND BAILEY
that it is reasonable to assume that the addict on the street is addicted roughly 85% of the time. Conversely, the assumption is that any dollar figure based on continuous usage is an overestimate by approximately 15%. We will adapt this procedure here and assume that the total anticipated illegal drug dollars must be further reduced by 15%, leaving a modified dollar estimate of $2,130,722. Third, this modified figure, as it now stands, represents a considerable underestimate in view of the fact that many illegal drug dollars are obtained through property crimes. Currently, in Venice, an addict must steal approximately $50 in property to realize $10 in cash-a fencing inflation of 500%. To multiply the above estimate by a factor of 5, however, would be in error since the projects’ addict sample for this cost analysis is approximately 35% female, and female addicts are more apt to earn drug dollars in prostitution (and/or dealing) than by robbery or burglary. We will adopt the conservative procedure of attributing all 35% of $2,130,722 ($745,753) as the estimated anticipated illegal drug dollars for the female addicts, without any increase due to “fencing inflation.” Sixty-five percent of $2,130,722 ($1,384,969) are the male addicts’ raw anticipated illegal drug dollars. Before increasing this figure by a fencing inflation factor, however, we must determine how many addicts generally support their habit by dealing drugs instead of engaging in property crime. Again, turning to the cost analysis model used by McGlothlin et al. (1972) employing the estimates provided by Cushman (1971), it was assumed that roughly one-third of the male addicts’ illegal drug dollars are obtained from stolen property. Adopting this procedure here, we estimate that 33% of $I ,384,969 ($457,040) illegal anticipated drug dollars were obtained via property crime, accounting for a “fair value” (actual dollar value of stolen property) of 500y0 of $457,040 ($2,285,200) in stolen goods. In other words, we must add an additional four times $457,040 ($1,828,160) to our current total estimate of $2,130,722, yielding a revised estimate of $3,958,882. Fourth, this figure continues to be an underestimate for two additional reasons: (1) a certain number of project participants would have been arrested during the otherwise arrest-free period they spent in the projectgiving rise to apprehension and court costs, and (2) of those arrested, a certain number would be convicted and jailed during the otherwise jail-free period they spent in the project. Unfortunately, criminality indexes are too dependent upon extraproject variables to enable meaningful estimates to be made based upon simple extrapolations from client intake data. In other words, a client-byclient analysis of criminality costs analogous to that performed above
COST-BENEFIT ANALYSIS OF HEROIN TREATMENT
449
Table 3 Predicted Criminality Costs
Enforcement function Apprehension Courta Incarcerationb
Estimated cost
Client averages one year prior to intake
Predicted costs per addict year
$1,20O/arrest $2,000/arrest $3,60O/year
1.3 arrests 1.3 arrests 0.125 years
$1,560 $2,600 $450
Total
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a
$4,610
Assumes two municipal hearings at $350 each and one superior hearing at $1,300. Average obtained over state prisons (including civil committment and county jail).
for drug costs would not appear to be appropriate here. Instead, we will use the following rather simple, although indirect, procedure. Summarizing the available data on apprehension, court, and incarceration costs to arrive at reasonable estimates on a per addict basis, and combining these estimates with the average arrest rates and incarceration times reported by our clients 1 year prior to project entry, we can predict the typical criminality cost per addict year for this projects’ clientele to be $4,610 as shown in Table 3. Since the 285 addicts in our cost-benefit analysis sample were monitored an average of approximately 9 months or 213.8 addict years, we would expect an estimated 213.8 x $4,610 or $985,618 in criminality costs. In fact, however, approximately 27% of 285 or only 77 addicts were arrested; these addicts, as a group, represented roughly 100 arrests and 18.0 addict-years (an average of 2.8 months per addict) incarceration. Using the estimates in Table 3, the criminality costs for these 77 addicts is approximated at $384,800. Thus, on balance, the project registers a dollar benefit due to anticipated criminality costs of $985,618 less $384,800, or $600,818. Fifth, we note that over all treatment components, there has been a general increase in employment rates (from point of intake to point of last follow-up) of roughly 30%. This increase must account for a certain dollar decrease in social costs (unemployment, welfare, health services, etc.). In other words, an additional 307; of 285 (85) clients are contributing to the labor force over and above that expected from pre-treatment employment data. These clients worked an average of approximately 2 months, accounting for a total number of 14.2 employed addict-years. McGlothlin et al. (1971) have estimated the national dollar productivity to be $4,600 per employed addict-year. Since this figure is roughly 2 years old, a more realistic estimate would be approximately $5,300, figuring a cost of living increase of 15%. Thus we estimate an approximate savings of 14.2 x
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450
Table 4 Summary of Cost-Benefit Analysis for Overall Project
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Item Raw savings due to anticipated illegal drug dollars 18 % “exaggeration” factor 15 % “abstinance” factor “Fencing inflation” factor Benefit due to anticipated criminality costs Benefit due to anticipated social costs of unemployment Treatment costs
Dollar amount
Dollar balance
+3,056,990 - 550,258 -376,010 1,828,160 +600,818
3,056,990 +2,506,732 +2,130,722 $3,958,882 +4,559,700
+
+72,260 - 1,272,041
+
+4,63 1,960 3,359,919
+
$5,300 ($72,260)in dollar benefit due to the anticipated social costs of unemployment. Finally, we must consider the treatment costs incurred over 1-1/2 years of project operation. For the purposes of this cost-benefit analysis, we will assume that these costs are equivalent to the total funding level of the project, including “in-kind’’ dollars. First year (1971-1972) funding amounted to $869,499;the second project year (1972-1973)was funded at $805,184. Thus treatment costs for 1-lj2 years of project operation are fixed at $1,272,041. The total cost-benefit analysis is summarized in Table 4. According to the calculations presented herein, 1-1 /2 years of project operation has resulted in an approximate dollar benefit to society equal to $3,359,919an amount over two and one-half times the funding level of the project. In conclusion, it should be reiterated that we have not intended to offer a mathematically rigorous cost-benefit model which can be used in any drug abuse treatment project. Furthermore, we recognize the fact that a host of other mitigating factors or variables could be identified and would, when analyzed, result in additional “credits” and “debits” to the final dollar balance above. Notwithstanding these considerations, however, we do believe that the analysis presented herein is sufficiently rigorous so as to provide project evaluators with a descriptive estimate of the relative costs and benefits for heroin treatment programs such as those analyzed for the present study. ACKNOWLEDGMENT
The project described herein was funded by the California Council on Criminal Justice (Grant No. 0541) through the Department of Psychiatry,
COST-BENEFIT ANALYSIS OF HEROIN TREATMENT
451
University of California, Los Angeles. A more detailed description of the project can be found in the Second Year Evaluation of the Venice/ UCLA Comprehensive Program of Community Drug Abuse Treatment and Research conducted by the Department of Urban Affairs, University Extension, UCLA.
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REFERENCES CUSHMAN, P. Methadone maintenance in hard-core criminal addicts: economic effects. New York State J . Med. 71: 1768-1774, 1971. LERNER, S., LINDER, R., and KLOMPUS, I. The cost of heroin to the addict and the community. J . Psychedelic Drugs, 4: 99-103, 1971. MCGLOTHLIN, W., TABBUSH, V . , CHAMBERS, C., and JAMISON, K. Alfernative Approaches to Opiate Addiction Control: Costs, Benefits and Potential. Final Report, Bureau of Narcotics and Dangerous Drugs (Contract No. 5-70-33), 1972.
Note Added in Proof. Since the time of submitting this report, final evaluation books have been prepared for each of the three communitybased treatment programs. Those for Tuum Est and Via Avanta contain updated (and somewhat refined) cost-benefit analyses following the basic model presented here.
ISSN: 0020-773X (Print) (Online) Journal homepage: http://www.tandfonline.com/loi/isum19
A Cost-Benefit Analysis for a Multimodality Heroin Treatment Project Kenneth A. Sirotnik & Richard C. Bailey To cite this article: Kenneth A. Sirotnik & Richard C. Bailey (1975) A Cost-Benefit Analysis for a Multimodality Heroin Treatment Project, International Journal of the Addictions, 10:3, 443-451, DOI: 10.3109/10826087509026727 To link to this article: http://dx.doi.org/10.3109/10826087509026727
Published online: 03 Jul 2009.
Submit your article to this journal
Article views: 10
View related articles
Citing articles: 2 View citing articles
Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=isum19 Download by: [ECU Libraries]
Date: 30 March 2016, At: 12:55
Downloaded by [ECU Libraries] at 12:55 30 March 2016
The International Journal of the Addictions, 10(3), 443451, 1975
A Cost-Benefit Analysis for a Multimodality Heroin Treatment Project Kenneth A. Sirotnik,* Ph.D. Department of Urban Affairs University of California L 0s Angeles, California
Richard
C. Bailey,? Ph.D.
Consultant Sociologist Santa Monica, California
The term “cost-benefit analysis” can connote a number of different constructs and procedures depending upon the analysts and the material content with which they are working. The cost analysis to be reported here is not of the highly complex cost-benefit classes of analyses typically requiring the use of theoretical, economic utility models. What we present here is a relatively simple and straightforward arithmetic computation of the amount of money that we anticipate would have been spent had the addicts encountered not been, in fact, treated by the project. We are, of course, making at least one (which we believe to be highly realistic) assumption : the addicts would have continued their drug habit and illegal
* Current mailing address:
1531 Benedict Canyon Drive, Beverly Hills, California 90210.
t Current mailing address: 709 19th Street, Santa Monica, California 90401. 443
Copyright 0 1975 by Marcel Dekker, Inc. All Rights Reserved. Neither this work nor any part may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, microfilming, and recording, or by any information storage and retrieval system, without permission in writing from the publisher.
SIROTNIK AND BAILEY
444
methods of supporting their habit had they not been treated by the project. Before presenting the details of the analysis, however, it is important to describe the nature of the drug project under study.
THE HEROIN TREATMENT PROJECT
Downloaded by [ECU Libraries] at 12:55 30 March 2016
Five different but related drug-treatment modalities were organized into a comprehensive project of community drug abuse treatment with the following very general goals :
1. The primary goal, directly oriented toward the treatment of drug addicts such that they will turn to constructive life styles free of drug abuse. 2 . The additional goal, directed toward the development and testing of a multimodality treatment model designed to meet the needs of a diversified addict population. Specifically, three modalities were located in Venice, California and were operated by community-based organizations; these treatment programs can be briefly described as follows:
Vita. A central intake facility, offering referral and hospital follow-up services, short-term counseling, crisis intervention, and prevention activities for youth groups. 2 . Tuum Est. A drug-free, residential facility offering a longterm therapeutic community environment. 3. Via Avanta. A residential halfway house for new methadone patients offering a short-term transitional therapeutic environment. 1.
The two remaining treatment programs were university-based (UCLANeuropsychiatric Institute) :
Detoxification. A 14-day, drug-supported, inpatient detoxification program offering psychiatric and social service counseling. 5. Methadone Maintenance. An outpatient maintenance program utilizing methadone and offering psychiatric and social service counseling.
4.
The addicts treated by the project came mostly from the Los Angeles
445
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COST-BENEFIT ANALYSIS OF HEROIN TREATMENT
area, many coming from the Venice area, a community having great socioeconomic and ethnic diversity and having long experienced high heroin (and other drug) abuse of epidemic proportions with a corresponding high crime rate. These characteristics were strongly reflected in the demographic and biographic data obtained on the addicts at their point of intake to their treatment programs. Specifically, the present study will be concerned with 285 heroin addicts, treated by the project for 1 day or more over the period of time beginning July 1, 1971 and ending December 31, 1972. Of these clients served by the project, 102 were referrals by Vita to the heroin detoxification program, 103 were Tuum Est residents whose major drug of abuse was heroin, 45 were patients in the methadone maintenance program, and 35 were residents of Via Avanta.
THE COST-BENEFIT ANALYSIS The variables defined in Table 1, although representing only a fraction of the data collected on each addict before, during, and after treatment, constitute the core set of relevant data employed in the basic computations of the cost-benefit analysis. Also included in this table are the basic quantities calculated for each addict on the basis of the indicated variables. Table 2 presents the results of these computations for the addicts in each treatment program and for the total group of 285 addicts. It should be clear that when summed across components, the heroin addicts, immediately prior to project entry, were spending a total of $133,782 per week to support their drug habit (an average of $469 per person). The total number of drug-free “client-weeks’’ accounted for by the project, as of December 1972, both during and after treatment, was 8,641, an average of 30.3 per Table I Variables Used in Cost-Benefit Analysis and Definition of Calculated Quantities ~
Variable
Symbol“
a b
Frequency of heroin use (days/week) Cost (in dollars) of daily use Number of drug-free weeks during treatment Number of drug-free weeks after treatment (as of last follow-up) Proportion of illegally obtained dollars to support heroin use
C
d e
a Definition of quantities. Weekly drug cost (in dollars), ab. Number of drug-free weeks, d. Anticipated (had the addict not been drug-free) drug cost, ab(c d). Anticipated c illegal drug dollars, abe(c d).
+
+
+
P Q\ P
-
Overall project
Vita/detoxification Tuum est Methadone maintenance Via avanta
Treatment program 51,000 44,702 24,570 13,510 133,782
285
Total weekly drug cost (%)
102 103 45 '35 -
Number of cases
835,074 1,176,466 681,030 364,420 3,056.990 3,955,468
8,641
Total anticipated illegal drug dollars
1,077,426 1,472,797 1,017,270 387,975
Total anticipated drug cost ( 5 )
1,999 3,471 2,075 1.096
Total number of drug-free weeks
Table 2 Cost Analysis Data by Treatment Program and Overall Project
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447
client. Cumulating the products of cost per week and number of drug-free weeks on a person-by-person basis, a total anticipated drug cost of $3,955,468 is obtained (an average of $1 3,879 per client). Finally, cumulating the products of cost per week, number of drug-free weeks, and proportion of illegally obtained monetary drug support on a person-by-person basis, a total anticipated illegal number of drug dollars is obtained: $3,056,990 (an average of $10,726 per person). This, then, is the total number of drug dollars which are anticipated to have been illegally obtained had not the addicts been treated by the project. This estimate of $3,056,990, although accurately computed, does not, however, represent a realistic estimate of the dollar benefit to society for at least six reasons. We will consider each of these reasons briefly, indicating how the “raw” estimate must be modified in each case. First, there is some reason to believe that the addicts’ self-reported heroin dollar expenditure, averaging $469 per week (or $67 per day) is exaggerated, especially for programs such as Detoxification and Methadone Maintenance, where the addict often believes that initial methadone substitution levels are determined on the basis of the size of his (or her) heroin habit. There is empirical support for this contention in the Venice/ UCLA project, considering the relatively lower reported cost for Tuum Est and Via Avanta (mean = $60 pel day) as compared with Detoxification and Methadone Maintenance programs (mean = $73 per day). The $60 per day figure compares favorably with other recent, west coast estimates; for example, Lerner et al. (1971) report a $50 per day average for a sample of San Francisco addicts treated between 1969 and 1971-allowing for cost of living increases and inflation due to recent enforcement “crackdowns,” our estimate of $60 per day appears to be quite reasonable. Thus, in comparison to the Methadone Maintenance and Detoxification figure of $73 per day, we estimate an approximate “exaggeration” factor of 18%-that is, we estimate that addicts’ “true” average daily heroin cost may roughly be 18% less than what they actually report. Thus, for purposes of this analysis, we adopt the conservative procedure of reducing the total anticipated illegal drug dollars by 18% for all five components, leaving a modified dollar estimate of $2,506,732. Second, the methods of computing total cost (see Table 1) assume that the addict would have used continuously (daily) for the entire period of time he was, in fact, kept drug-free. As McGlothlin et al. (1972) have pointed out, addicts cannot generally maintain steady, daily usage, particularly at the relatively high levels reported by addicts in this project. They conclude, after reviewing the literature (particularly Cushman, 1971)
Downloaded by [ECU Libraries] at 12:55 30 March 2016
448
SIROTNIK AND BAILEY
that it is reasonable to assume that the addict on the street is addicted roughly 85% of the time. Conversely, the assumption is that any dollar figure based on continuous usage is an overestimate by approximately 15%. We will adapt this procedure here and assume that the total anticipated illegal drug dollars must be further reduced by 15%, leaving a modified dollar estimate of $2,130,722. Third, this modified figure, as it now stands, represents a considerable underestimate in view of the fact that many illegal drug dollars are obtained through property crimes. Currently, in Venice, an addict must steal approximately $50 in property to realize $10 in cash-a fencing inflation of 500%. To multiply the above estimate by a factor of 5, however, would be in error since the projects’ addict sample for this cost analysis is approximately 35% female, and female addicts are more apt to earn drug dollars in prostitution (and/or dealing) than by robbery or burglary. We will adopt the conservative procedure of attributing all 35% of $2,130,722 ($745,753) as the estimated anticipated illegal drug dollars for the female addicts, without any increase due to “fencing inflation.” Sixty-five percent of $2,130,722 ($1,384,969) are the male addicts’ raw anticipated illegal drug dollars. Before increasing this figure by a fencing inflation factor, however, we must determine how many addicts generally support their habit by dealing drugs instead of engaging in property crime. Again, turning to the cost analysis model used by McGlothlin et al. (1972) employing the estimates provided by Cushman (1971), it was assumed that roughly one-third of the male addicts’ illegal drug dollars are obtained from stolen property. Adopting this procedure here, we estimate that 33% of $I ,384,969 ($457,040) illegal anticipated drug dollars were obtained via property crime, accounting for a “fair value” (actual dollar value of stolen property) of 500y0 of $457,040 ($2,285,200) in stolen goods. In other words, we must add an additional four times $457,040 ($1,828,160) to our current total estimate of $2,130,722, yielding a revised estimate of $3,958,882. Fourth, this figure continues to be an underestimate for two additional reasons: (1) a certain number of project participants would have been arrested during the otherwise arrest-free period they spent in the projectgiving rise to apprehension and court costs, and (2) of those arrested, a certain number would be convicted and jailed during the otherwise jail-free period they spent in the project. Unfortunately, criminality indexes are too dependent upon extraproject variables to enable meaningful estimates to be made based upon simple extrapolations from client intake data. In other words, a client-byclient analysis of criminality costs analogous to that performed above
COST-BENEFIT ANALYSIS OF HEROIN TREATMENT
449
Table 3 Predicted Criminality Costs
Enforcement function Apprehension Courta Incarcerationb
Estimated cost
Client averages one year prior to intake
Predicted costs per addict year
$1,20O/arrest $2,000/arrest $3,60O/year
1.3 arrests 1.3 arrests 0.125 years
$1,560 $2,600 $450
Total
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a
$4,610
Assumes two municipal hearings at $350 each and one superior hearing at $1,300. Average obtained over state prisons (including civil committment and county jail).
for drug costs would not appear to be appropriate here. Instead, we will use the following rather simple, although indirect, procedure. Summarizing the available data on apprehension, court, and incarceration costs to arrive at reasonable estimates on a per addict basis, and combining these estimates with the average arrest rates and incarceration times reported by our clients 1 year prior to project entry, we can predict the typical criminality cost per addict year for this projects’ clientele to be $4,610 as shown in Table 3. Since the 285 addicts in our cost-benefit analysis sample were monitored an average of approximately 9 months or 213.8 addict years, we would expect an estimated 213.8 x $4,610 or $985,618 in criminality costs. In fact, however, approximately 27% of 285 or only 77 addicts were arrested; these addicts, as a group, represented roughly 100 arrests and 18.0 addict-years (an average of 2.8 months per addict) incarceration. Using the estimates in Table 3, the criminality costs for these 77 addicts is approximated at $384,800. Thus, on balance, the project registers a dollar benefit due to anticipated criminality costs of $985,618 less $384,800, or $600,818. Fifth, we note that over all treatment components, there has been a general increase in employment rates (from point of intake to point of last follow-up) of roughly 30%. This increase must account for a certain dollar decrease in social costs (unemployment, welfare, health services, etc.). In other words, an additional 307; of 285 (85) clients are contributing to the labor force over and above that expected from pre-treatment employment data. These clients worked an average of approximately 2 months, accounting for a total number of 14.2 employed addict-years. McGlothlin et al. (1971) have estimated the national dollar productivity to be $4,600 per employed addict-year. Since this figure is roughly 2 years old, a more realistic estimate would be approximately $5,300, figuring a cost of living increase of 15%. Thus we estimate an approximate savings of 14.2 x
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Table 4 Summary of Cost-Benefit Analysis for Overall Project
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Item Raw savings due to anticipated illegal drug dollars 18 % “exaggeration” factor 15 % “abstinance” factor “Fencing inflation” factor Benefit due to anticipated criminality costs Benefit due to anticipated social costs of unemployment Treatment costs
Dollar amount
Dollar balance
+3,056,990 - 550,258 -376,010 1,828,160 +600,818
3,056,990 +2,506,732 +2,130,722 $3,958,882 +4,559,700
+
+72,260 - 1,272,041
+
+4,63 1,960 3,359,919
+
$5,300 ($72,260)in dollar benefit due to the anticipated social costs of unemployment. Finally, we must consider the treatment costs incurred over 1-1/2 years of project operation. For the purposes of this cost-benefit analysis, we will assume that these costs are equivalent to the total funding level of the project, including “in-kind’’ dollars. First year (1971-1972) funding amounted to $869,499;the second project year (1972-1973)was funded at $805,184. Thus treatment costs for 1-lj2 years of project operation are fixed at $1,272,041. The total cost-benefit analysis is summarized in Table 4. According to the calculations presented herein, 1-1 /2 years of project operation has resulted in an approximate dollar benefit to society equal to $3,359,919an amount over two and one-half times the funding level of the project. In conclusion, it should be reiterated that we have not intended to offer a mathematically rigorous cost-benefit model which can be used in any drug abuse treatment project. Furthermore, we recognize the fact that a host of other mitigating factors or variables could be identified and would, when analyzed, result in additional “credits” and “debits” to the final dollar balance above. Notwithstanding these considerations, however, we do believe that the analysis presented herein is sufficiently rigorous so as to provide project evaluators with a descriptive estimate of the relative costs and benefits for heroin treatment programs such as those analyzed for the present study. ACKNOWLEDGMENT
The project described herein was funded by the California Council on Criminal Justice (Grant No. 0541) through the Department of Psychiatry,
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University of California, Los Angeles. A more detailed description of the project can be found in the Second Year Evaluation of the Venice/ UCLA Comprehensive Program of Community Drug Abuse Treatment and Research conducted by the Department of Urban Affairs, University Extension, UCLA.
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REFERENCES CUSHMAN, P. Methadone maintenance in hard-core criminal addicts: economic effects. New York State J . Med. 71: 1768-1774, 1971. LERNER, S., LINDER, R., and KLOMPUS, I. The cost of heroin to the addict and the community. J . Psychedelic Drugs, 4: 99-103, 1971. MCGLOTHLIN, W., TABBUSH, V . , CHAMBERS, C., and JAMISON, K. Alfernative Approaches to Opiate Addiction Control: Costs, Benefits and Potential. Final Report, Bureau of Narcotics and Dangerous Drugs (Contract No. 5-70-33), 1972.
Note Added in Proof. Since the time of submitting this report, final evaluation books have been prepared for each of the three communitybased treatment programs. Those for Tuum Est and Via Avanta contain updated (and somewhat refined) cost-benefit analyses following the basic model presented here.
