Treatment Cost Analysis Tool (TCAT) for estimating costs of outpatient treatment services

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Abstract

A Microsoft® Excel-based workbook designed for research analysts to use in a national study was retooled for treatment program directors and financial officers to allocate, analyze, and estimate outpatient treatment costs in the U.S. This instrument can also be used as a planning and management tool to optimize resources and forecast the impact of future changes in staffing, client flow, program design, and other resources. The Treatment Cost Analysis Tool (TCAT) automatically provides feedback and generates summaries and charts using comparative data from a national sample of non-methadone outpatient providers. TCAT is being used by program staff to capture and allocate both economic and accounting costs, and outpatient service costs are reported for a sample of 70 programs. Costs for an episode of treatment in regular, intensive, and mixed types of outpatient treatment were $882, $1310, and $1381 respectively (based on 20% trimmed means and 2006 dollars). An hour of counseling cost $64 in regular, $85 intensive, and $86 mixed. Group counseling hourly costs per client were $8, $11, and $10 respectively for regular, intensive, and mixed. Future directions include use of a web-based interview version, much like some of the commercially available tax preparation software tools, and extensions for use in other modalities of treatment.

Introduction

The past decade has seen considerable methodological advancement in cost analysis and the economic study of addiction in the United States. Several sound and proven methods have been developed and used to help structure and standardize estimates of substance abuse treatment services and their costs. These have included a micro-costing method for treatment services (Anderson et al., 1998), the Drug Abuse Treatment Cost Analysis Program (DATCAP; French et al., 1997), a Center for Substance Abuse Treatment (CSAT) Uniform System of Accounting and Cost Reporting (USACR; Capital Consulting, 1998) for substance abuse treatment programs and an accompanying costing tool, the Substance Abuse Treatment Cost Allocation and Analysis Template (SATCAAT; Harwood and McCliggott, 1998, October), the Cost, Procedure, Process, and Outcome Analysis (CPPOA; Yates, 1996, Yates, 1999), the Alcohol Drug Services Study (ADSS) Cost Data Audit Instrument (CDAI; Beaston-Blaakman et al., 2007b, Horgan et al., 2001, Shepard et al., 2000, Substance Abuse and Mental Health Services Administration, 2003), and the Substance Abuse Services Cost Analysis Program (SASCAP; Zarkin et al., 2004). Each has been used successfully in research studies to provide reliable estimates of treatment costs. However, cost data can serve a dual role, answering broad research and policy questions on the one hand and program management questions on the other (Cartwright, 2008). At present, research applications are better developed than management applications. Indeed, with the exception of the Yates, 1996, Yates, 1999 CPPOA methodology, existing approaches to cost data collection were all designed to be used by trained project staff to capture data for research studies. The CPPOA is distinct in that it was designed for use by individuals with varying levels of education and backgrounds. As a consequence, many of these other developments in the economic arena have not been readily available to practitioners for their direct use.

Cartwright (2008) reviews several costing methods, discussing their strengths, weaknesses, and applications. His review notes that the ADSS approach relies on a short instrument (making the burden on respondents smaller), but still employs economic concepts such as the costs of volunteer time. These features make the approach appealing for use in large-scale data collection efforts. They also give it the potential to serve a program management function as well as collecting research data. In ADSS, the greatest emphasis was placed on collecting labor costs. Staff time and wages, including the value of volunteer time, were captured for a range of personnel categories. Labor expenses constitute the bulk of costs for many programs, justifying detailed measurement in this area (Drummond et al., 2005). Nonetheless, some other cost contributors are worth considering. For example, when programs are operated by a broader parent organization, the administrative overhead (or indirect expenses) passed on to the program can be substantial (Zarkin et al., 2004). Ignoring these costs could lead to undervaluing the resources programs are using. Likewise, non-personnel costs, including buildings and equipment, can vary among programs. Capturing large capital expenses can be particularly challenging because of the need to consider costs over the product's useful lifespan (Drummond et al., 2005). The Treatment Cost Analysis Tool (TCAT), the focus of this paper, includes explicit assessment of these areas. These are structured such that they provide a framework and some assistance to users who may be less familiar with the relevant costing concepts.

The purpose of this paper is to report costs from a large sample of outpatient drug-free (ODF) programs operating in four distinct regions in the U.S., describing in detail the technical functions of the TCAT, and illustrating the use of this costing tool. These cost estimates were developed by program personnel using the tool as part of a study funded by the National Institute on Drug Abuse. The goal of the parent project in which the TCAT was first used is to develop an information system that can be used by treatment programs to monitor their organizational health.

Section snippets

Instrumentation

Using the ADSS CDAI as a starting point, the Treatment Cost Analysis Tool was developed with the intention of serving both research and management functions. The purpose of the TCAT is to collect, analyze, and report outpatient substance abuse treatment client volume and cost data including the allocation of overhead (indirect) costs associated with an administrative or parent agency. Administrative or parent agency overhead is obtained using provider estimates of the proportion of parent

Results

Table 2 describes the 70 programs in the sample. One-third offered only “regular” outpatient services (defined as less than 6 h of structured programming each week); another 13% offered only “intensive” services (defined as a minimum of 2 h of structured programming on at least 3 days each week; Substance Abuse and Mental Health Services Administration, 2007). The remainder, about half the programs (54%), was of a “mixed” type that included both regular and intensive tracks that could not be

Discussion

The TCAT, a computerized and self-administered cost analysis tool for generating non-methadone outpatient substance abuse treatment service costs in the U.S., was used to allocate and analyze the full costs of treatment, including administrative overhead associated with a parent organization. Overall, 70 completed cost analyses from the first year of data collection generated the most current unit of service costs available for outpatient non-methadone treatment programs. With training and

Conflict of interest

None.

Acknowledgements

The authors would like to thank the Gulf Coast, Great Lakes, Northwest Frontier, and South Coast Addiction Technology Training Centers (ATTCs) for their assistance with recruitment and training. We would also like to thank the individual programs (staff and clients) who participated in the assessments and training in the TCOM Project.

Role of Funding Source: This work was funded by the National Institute on Drug Abuse (R01 DA014468). The NIDA had no role in the design, collection of data,

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