Costs and Benefits of Methadone Treatment: Results from a Lifetime Simulation Model

1. Costs and Benefits of Methadone Treatment: Results from a Lifetime Simulation Model

2. 2 Background Previous studies have examined the costs and benefits of a single treatment episode Drug abuse is a chronic relapsing condition and is typically not successively treated in one treatment episode Simulation models are useful tools to represent progression of chronic conditions even though typically only observe individuals over short time periods Simulation models have been used to evaluate costs and benefits of treatment for chronic conditions, such as coronary heart disease, diabetes, depression Zaric et al. (2000) developed a dynamic compartmental model to evaluate the cost-effectiveness of expanding methadone treatment

3. 3 Model Description (I) Monte Carlo simulation of 1 million men and women from general population ages 18 to 60 Monthly transitions are governed by random draws from probability distributions Outcomes: Heroin use Methadone treatment Criminal behavior/criminal justice Time spent incarcerated Employment Health care

4. 4 Model Description (II)

5. 5 Model Description (III) Estimated QALYS, lifetime crime and criminal justice (CJ) costs, earnings, health care (HC) costs Lifetime Economic Benefits = discounted present value of (Earnings � HC Costs � CJ Costs) Lifetime Costs = discounted present value of treatment costs All future values are discounted at r = 0.03 per year

6. 6 Data The model requires a large number of parameter values To the extent possible, we identified parameters from the literature or readily accessible databases Annual transition data were converted into corresponding monthly value When data were not available, parameters were hypothesized to match model�s moments to observed data

7. 7 Selected Results (I) Percent Ever-Users Who Went to Treatment 59% Number of Times Treatment Participants Went to Treatment 3.4 Cumulative Years in Treatment 2.4 Percent of Ever-Users Who Committed a Crime 75% Percent of Ever-Users Who Were Incarcerated 51% Mean Lifetime Crime and Criminal Justice Costs Never-Users $70,017 Ever-Users $1,061,639 Mean Lifetime Earnings Never-Users $467,463 Ever-Users $236,012 Mean Lifetime Health Care Costs Never-Users $18,531 Ever-Users $17,431

8. 8 Selected Results (II)

9. 9 Selected Results (III)

10. 10 Selected Results (IV)

11. 11 Discussion (I) Simulation models are a useful tool for modeling chronic conditions such as drug use To compare to the literature, we estimated the benefits and costs of a single treatment episode; we found a benefit-cost ratio of 4.9 for treatment, comparable to findings in the literature In contrast, comparing the baseline model to a world without treatment yields a benefit-cost ratio of 37.7 for having lifetime treatment available Magnitude of lifetime benefit-cost ratio illustrates that treatment has multiplicative effect that yields greater than proportional increases in lifetime benefits

12. 12 Discussion (II) Limitations Model makes many simplifying assumptions Values for several parameters were assumed Sensitivity analysis showed that for the most part, model was not sensitive to assumed parameters. An exception was the model showed some sensitivity to criminal behavior parameters Focuses only on outpatient methadone treatment Hope that lifetime simulation model that captures dynamics of use and treatment can help policy makers make better judgments about current resource allocation