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Prevention’s Cost Effectiveness― Illustrative Economic Benefits of General Population Interventions

Prevention’s Cost Effectiveness― Illustrative Economic Benefits of General Population Interventions. Richard Spoth and Max Guyll Partnerships in Prevention Science Institute and Department of Psychology Iowa State University United Nations Office on Drugs and Crime

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Prevention’s Cost Effectiveness― Illustrative Economic Benefits of General Population Interventions

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  1. Prevention’s Cost Effectiveness― Illustrative Economic Benefits of General Population Interventions Richard Spoth and Max Guyll Partnerships in Prevention Science Institute and Department of Psychology Iowa State University United Nations Office on Drugs and Crime Technical Seminar on Drug Addiction Prevention and Treatment: From Research to Practice December 16, 2008

  2. Potential Economic Benefits of Prevention • Preventive interventions most likely to be economically beneficial when... • Prevented condition is prevalent • Condition is costly • Effective preventive interventions are available • Interventions costs are low

  3. Prevention Spending is an Investment • Prevention costs spent in the present for benefits returned in future • Intervention costs and effects are known • Benefits must be estimated across the future, discounted to determine value in present

  4. Return on Investment(Benefit-cost ratios) of Selected Programs* • Pre-school education • Early Childhood Education.........................................$2.36 • Child welfare • Nurse Family Partnership...........................................$2.88 • Youth development • Guiding Good Choices (PDFY)...............................$11.07 • Juvenile offender programs • Dialectical behavior therapy....................................$38.05 *Source: Aos, Lieb, Mayfield, Miller & Pennucci (2004)

  5. Economic Benefits ofSubstance-Use Prevention in General • Prevention benefits • Increased productivity, tax revenues • Lower health care costs • Reduced justice system costs • Decreased welfare, victim, fire costs • Potential benefits are greatest where current costs of prevented condition are greatest

  6. Rationale for IllustrativeEconomic Analyses of SubstancePrevention (Alcohol/Meth)* • Prevention with general populations could save billions • In U.S., annual alcohol costs estimated at $228.5 billion for adults, $89.5 billion for youth • Annual drug costs estimated at $151.3 billion • Employee methamphetamine use cost to employers estimated at $31.8 billion per year • Economic analyses assist in estimating value of interventions and identifying interventions that hold most promise *Using most recent estimates and adjusting for inflation to current year.

  7. *Case Study of “Billy” or “Betty”: Costs of Life Trajectory of Early Substance Use and Problem Behaviors Resident home expenses $50,000 Medicaid $110,000 Special education $28,000 State hospital $128,000 Legal (estimated) $20,000 Total $336,000 Increasing Costs Level of Problem Behaviors Trajectory of Problems/ Early Childhood Young Adulthood *Illustrative case history and cost projections from Dennis Embry (PAXIS Institute).

  8. Future Annual Benefits from Preventing a Single Alcohol Use Disorder

  9. Cost-effectiveness (CE) vs. Cost-benefit (CB) • CE yields cost to achieve a particular outcome—such as prevention of an alcohol-use disorder • Cost to produce a unit of prevention • CE = Prevention Cost Prevention Effect

  10. Cost-effectiveness (CE) vs. Cost-benefit (CB) • CB assesses whether savings generated by prevention are greater than costs spent on prevention • Important when monetary resources are limited • Assists policy/decision-makers in choice of which intervention to fund • CB = Benefit of Prevention Effect (Cost Savings) Cost per each Prevention Effect

  11. Empirical Examples Longitudinal randomized intervention-control prevention trials • Project Family Randomized Controlled Trial • 667 families recruited through 33 Iowa school districts • Example: Iowa Strengthening Families Program (ISFP) for general populations (universal intervention) • Capable Families and Youth Trial • 679 families recruited through 36 rural Iowa school districts • Example: Life Skills Training Program (LST) for general populations (school-based)

  12. Estimates of Costs • Illustrative cost categories (for family program) • Program facilitation (38%) • Facilitator training (30%) • Incentives and child care (21%) • Site administration (6%) • Materials (3%) • Total ISFP cost = $68,856 per 100 families • Total LST cost = $15,500 per 100 students Sources: Spoth, R., Guyll, M., & Day, S. X. (2002). Universal family-focused interventions in alcohol-use disorder prevention: Cost-effectiveness and cost-benefit analyses of two interventions. Journal of Studies on Alcohol, 63(2), 219‑228; Guyll, Spoth, & Madon (2008). Economic analysis of prevention effects on methamphetamine use: An employer’s perspective. Unpublished manuscript.

  13. Cost-effectiveness-Final Calculations Prevention cost Prevention effect For alcohol (ISFP case): Cost of $68,856 per 100 ≈5.5 cases prevented per 100* $12,459 cost per disorder prevented Meth use (LST): $15,500/≈3.2 cases* = $4,921 per meth use case prevented *Difference between control and intervention group cases = =

  14. Savings for Each Unit of Prevention • ISFP Case • Benefit per alcohol disorder prevented • $244,288 (Before discounting) • $119,633 (After discounting) • LST Case • Employer benefit per meth user prevented • $402,961 (Before discounting) • $130,013 (After discounting)

  15. Benefit-Cost Ratios Across Two Studies

  16. Conclusions • Evidence that prevention more than pays for itself (e.g., $10 returns/dollar invested) • Illustrative analyses were relatively conservative • Conservative estimates of interventions level of efficacy (e.g., intent-to-treat) • Considered only costs avoided by prevention of one type of outcome; in fact multiple cost-saving outcomes produced • Did not include estimate of societal “willingness to pay” to prevent each alcohol-use disorder • Effective and efficient prevention promises to save, possibly, billions of dollars per year, provided we can learn how to effectively implement on a larger scale...

  17. Acknowledgement of Our Partners in Research Investigators/Collaborators R. Spoth (Director), C. Redmond & C. Shin (Associate Directors), T. Backer, K. Bierman, G. Botvin, G. Brody, S. Clair, T. Dishion, M. Greenberg, D. Hawkins, K. Kavanagh, K. Kumpfer, C. Mincemoyer, V. Molgaard, V. Murry, D. Perkins, J. A. Stout Associated Faculty/Scientists K. Azevedo, J. Epstein, M. Feinberg, K. Griffin, M. Guyll, K. Haggerty, S. Huck, R. Kosterman, C. Lillehoj, S. Madon, A. Mason, J. Melby, M. Michaels, T. Nichols, K. Randall, L. Schainker, T. Tsushima, L. Trudeau, J. Welsh, S. Yoo Prevention Coordinators E. Berrena, M. Bode, B. Bumbarger, E. Hanlon K. James, J. Meek, A. Santiago, C. Orrson

  18. Welcome to our website... www.ppsi.iastate.edu

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