Substance Use Disorder Treatment Is More Cost Effective Than Incarceration

"A review of 11 studies (McCollister and French 2003) found that the benefit–cost ratios associated with substance abuse treatment ranged from 1.33 to 23.33 and that benefits were overwhelmingly because of reductions in criminal activity, with smaller contributions of earnings, and averted health care. Our conclusion is similar, especially when inflating the arrest data. Our benefit–cost ratio is also similar to the CalDATA estimate, despite differences in study design and methodology. However, our estimates of substance abuse treatment costs tend to be lower than those in previous studies. An earlier literature review by Roebuck, French, and McLellan (2003) suggested that the average cost per treatment episode was $7,358 for MM [Methadone Maintenance], $1,944 for standard outpatient, and $9,426 for residential. Our estimates were $2,737, $838, and $2,791, respectively, based on weighted per diem estimates. The lower episode costs in CalTOP were because of shorter lengths of treatment for MM and residential, as the weekly cost of treatment was actually higher ($99 and $235, respectively, in CalTOP, compared with $91 and $194 in Roebuck et al.). For outpatient, lower episode costs were also attributable to lower weekly costs, around $48 versus $121 in Roebuck et al. These discrepancies might reflect geographic differences in the intensity and duration of treatment."

Source: 

Ettner, S. L., Huang, D., Evans, E., Ash, D. R., Hardy, M., Jourabchi, M., & Hser, Y. I. (2006). Benefit-cost in the California treatment outcome project: does substance abuse treatment "pay for itself"?. Health services research, 41(1), 192–213. doi.org/10.1111/j.1475-6773.2005.00466.x