Private Insurance Paying Less for Substance Abuse Treatment, According to Study of Healthcare Cost Trends

    ANN ARBOR, Mich., July 16 /PRNewswire-FirstCall/ -- Government agencies
 covered a growing share of the cost of substance abuse treatment over the
 past two decades, while the portion paid by private insurance showed a
 significant decline, according to a study published today in Health
 Affairs.
     The study, which analyzed healthcare costs from 1986 to 2003, was
 conducted by researchers from Thomson Healthcare, the federal Substance
 Abuse and Mental Health Services Administration (SAMHSA), Actuarial
 Research Corporation, and The Lewin Group.
     Key Findings:
 
                      Substance Abuse Treatment Spending:
                    portion of cost paid by various sources
 
                                                        1986             2003
     Private insurance                                 29.61%           10.07%
     Out-of-pocket                                     13.79%            8.03%
     Other private sources                              6.20%            4.51%
 
     Total: private sector                             49.59%           22.61%
 
     Medicare                                           4.29%            4.47%
     Other federal agencies                             7.06%           14.78%
     Medicaid                                          10.03%           17.89%
     Other state/local                                 29.02%           40.25%
 
     Total: public sector                              50.41%           77.39%
 
     Sources: Thomson Healthcare, SAMHSA
     Private Insurance Payments Declining: On average, private insurance
 payments for substance abuse treatment fell 1.6 percent each year. In 1986,
 private insurance paid $2.8 billion for drug and alcohol treatment; by
 2003, it funded $2.1 billion in treatment - a 24 percent decline. The share
 of total substance abuse treatment costs paid by private insurance declined
 from 30 percent to 10 percent.
     Public Sector Paying More: There is a distinct difference in spending
 trends between public and private organizations that pay for substance
 abuse treatment. On average, public sector expenditures increased 7.5
 percent each year during the study period. Medicaid and other public
 sources contributed 50 percent of substance abuse treatment costs in the
 U.S. in 1986. Their portion climbed to 77 percent by 2003.
     States Pay Largest Share: In 1986, Medicaid and other state and local
 agencies covered 39 percent of the total cost of drug and alcohol
 treatment. By 2003, their share grew to 58 percent. One factor that may be
 driving this growth is an increase in substance abuse treatment mandated
 and paid for by correctional institutions - which generated 36 percent of
 referrals to specialty substance abuse facilities in 2004.
     Substance Abuse Inpatient Care Declining: Much of the growth in
 publicly funded substance abuse treatment was attributable to increased
 expenditures for care delivered in outpatient settings. "Inpatient care for
 substance abuse is costly, and national spending on this type of treatment
 declined annually by 1.2 percent during the study period," said lead author
 Tami Mark, associate research director at Thomson Healthcare.
     Overall Substance Abuse Spending Grew Relatively Slowly: Overall,
 spending for substance abuse treatment totaled $20.7 billion, an increase
 from $9.3 billion in 1986. This represents a 4.8 percent average annual
 growth rate in spending -- lower than the overall healthcare expenditure
 growth rate of 8 percent and the economy's growth rate of 5.4 percent. In
 inflation-adjusted dollars, spending per person on substance abuse
 treatment averaged increases of 1.2 percent annually.
     About 22.5 million Americans suffer from a substance use disorder in
 any given year, and less than 4 million receive treatment.
     The authors of the study are Tami L Mark, Katharine R. Levit, and
 Rosanna M. Coffey from Thomson Healthcare; Rita Vandivort-Warren and
 Jeffrey A. Buck from SAMHSA; and members of the SAMHSA Spending Estimates
 Team, including David McKusick and Edward King from Actuarial Research
 Corporation and Henrick Harwood from The Lewin Group.
     About Thomson Healthcare
     Thomson Healthcare is the leading provider of decision support
 solutions that help organizations across the healthcare industry improve
 clinical and business performance. Thomson Healthcare products and services
 help clinicians, hospitals, employers, health plans, government agencies,
 and pharmaceutical companies understand healthcare markets, access medical
 and drug information, manage costs, and improve the quality of healthcare.
     Thomson Healthcare is a part of The Thomson Corporation, a provider of
 value-added information, software tools and applications to professionals
 in the fields of healthcare, law, tax, accounting, scientific research, and
 financial services. The Corporation's common shares are listed on the New
 York and Toronto stock exchanges ( TOC; TSX: TOC). For more
 information, visit www.thomsonhealthcare.com.
 
 

SOURCE Thomson Healthcare