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HOT TOPICS: Alcoholism  Addiction  AA  Cocaine  Heroin

The Case to Fund Addiction Treatment Right Now

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It's a no-brainer—for those with cash at hand. Photo via

By Dr. Richard Juman

08/22/12

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All this explains why substance use disorders are a perfect example of what economists and actuaries refer to as “cost offset”: the phenomenon in which the expenditure of dollars to treat one problem leads to less money being needed to deal with other problems. Cost offset has frequently been documented in general mental health treatment, since a very significant portion of expensive medical services are actually caused by untreated mental health issues which can be treated at less cost. 

But the appropriate treatment of substance use disorders is really the poster child for cost offset, in that the expenses attributable to addiction go well beyond the health care system, reaching into all areas of life: family, work, criminal justice, education, the welfare system—you name it. When addictive disorders are addressed aggressively, benefits are reaped right down the chain of impact: people are healthier, medical costs are reduced and society profits, as the savings that result in crime reduction, health care, welfare dependency and other arenas can far exceed the cost of providing the treatment. 

Most crucially, everyone must be aware of how logical and smart treatment is from a purely financial standpoint.

Some hope may be on the way. Recognition of the fact that mental health and substance use disorders are treatable conditions has been slow in coming, but a variety of mechanisms now in place are designed to address the discrimination in insurance plans against people with mental health and substance use disorders. The 2008 federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act was a giant step forward, preventing many, though not all, health plans from restricting mental health and substance use disorders and establishing the principle of a level playing field for behavioral and physical medicine.

And fortunately, this parity concept is extended by health care reform (the 2010 Affordable Care Act) into a variety of other plans—many of which will be part of the health care “exchanges” that are due to be established—and millions of Americans who don't currently have health insurance will be covered. The law mandates robust provision of services for mental health and substance use disorders, which must meet benchmarks established by mental health parity. Weaving parity into the Accountable Care Act, creating the health insurance exchanges, and mandating behavioral health treatment as an “Essential Health Benefits” in these plans should create a sea change in the way we care for mental health and substance use disorders. Still, this dramatic improvement could yet be blocked by budget cuts: six states have already announced that they will not expand Medicaid to give coverage to more needy people. 

If the provisions of these laws are fully implemented, enforced and monitored, many lives will be changed for the better and millions of dollars will ultimately be saved. The danger is that underfunding, lack of enforcement, overly aggressive utilization reviews or wrangling over the nuances of “medical necessity”—all short-term cost-containment strategies—will slow or halt these important forward steps. 

The dilution of these historic changes to the way substance use disorders are construed and treated will be less likely if both decision makers and the public know that substance use disorders are preventable and treatable. And most crucially, everyone must be aware of how logical and smart treatment is from a purely financial standpoint. The treatment community needs to make sure that they know. How can you do your part?

Richard Juman is a licensed clinical psychologist who has worked in the field of addiction for over 25 years, providing direct clinical care, supervision, program development and administration across multiple settings. A specialist in geriatric care and organizational change, he is also the president of the New York State Psychological Association. Email him here, and follow his tweets at @richardjuman.

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