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Treating Drug Problems: Volume 1 (1990)

Chapter: 7 Public Coverage

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Suggested Citation:"7 Public Coverage." Institute of Medicine. 1990. Treating Drug Problems: Volume 1. Washington, DC: The National Academies Press. doi: 10.17226/1551.
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7 Public Coverage The question of whether there should be a large-scale system of publicly supported drug treatment was answered affirmatively in the 1970s. That answer has been reaffirmed in the past few years, and the committee's analysis to this point has not raised any fundamental new doubts. With the existence and legitimacy of the public tier no longer at issue, the questions for public coverage are instead ones of management objectives and techniques. The task of this chapter is to consider the present system of public coverage in light of the needs, wants, and demands placed on it and to make appropriate recommendations for improvement. First, it is necessary to frame the fundamental policy questions that those responsible for public coverage of drug treatment should address a critically important endeavor. Even when some of the answers can only be provisional, approximate, or resolvable by public debate and political negotiation, asking the right questions is essential in order to assemble relevant evidence and give rational shape to the decision-making process. Policy has to do with ends and means. The committee sees three questions under each of these categories. In deciding on the ends of treatment policy, the questions are as follows: · What are the fundamental principles that justify public coverage of drug treatment? Or, whose treatment should public funds cover, and why? · What priorities should guide the current expansion of public cov- erage? 220

PUBLIC COVERAGE 221 · - What is the optimal level of public spending to implement these priorities? The committee identifies as principles that public coverage should seek to remedy treatment constraints that arise from inadequate income and to reduce external social costs, particularly those relating to crime and family role dysfunctions. Such efforts often require actively inducing people to seek treatment through a variety of methods, as well as seeking mechanisms to increase retention (e.g., legal coercion, outreach efforts, enhanced social services). Four specific priorities flow from these principles and conform to the committee's empirical analysis: reduce admission delays, improve program quality and performance, reach out to young mothers, and treat more criminal justice clients. This chapter outlines three progressive strategy options for public decision makers to consider: a core spending strategy, an intermediate plan, and a comprehensive option. The priorities and expenditure patterns recommended in this chapter should not be implemented without reconsidering the adequacy of present means for managing the public tier. These considerations divide into three instrumental questions: · What should be the respective state and federal roles in public coverage of drug treatment? . What are the most appropriate financial mechanisms for providing public support—essentially, to what degree should the emphasis be on direct service programs versus public insurance? What disciplines or controls should be in place to ensure that public expenditures for drug treatment are appropriate and effective? State governments have played the major role in financial administra- tion and quality control of drug treatment in recent years. Now, however, the federal government, in pumping major new funds into treatment, is reasserting its earlier leading role. It should take this opportunity to re- build important directional and accountability mechanisms and to prepare the ground for later introduction of a larger share of public insurance financing. (However, public insurance financing will never obviate the need for direct service support of critical program elements such as outreach and integration with nonhealth services.) Routine outcome measurement, training and technical assistance, gatekeeping functions, and performance contracting will be the keys to upgrading drug treatment and introducing it permanently into the mainstreams of health and human services. THE PRINCIPLES OF PUBLIC INTERVENTION l~venty-five years ago, publicly supported drug treatment in the United States was confined to the provision of certain therapeutic amenities at

222 TREATING DRUG PROBLEMS four correctional facilities. Each site admitted hundreds of drug-abusing and dependent individuals in a given year; most of them were convicted of narcotics violations, but some of them were volunteers requesting treatment. Leo of the facilities were large federal prison-hospitals, at Lexington, Kentucky, for the eastern United States and at Fort Worth, Texas, for the West; the others were specialized rehabilitation prisons operated by the two most populous states at Rikers Island, New York, and Corona, California. The challenges of financing and managing public-sector treatment have changed markedly since that time. Instead of four prison treatment sites, there are several thousand public-tier programs in communities and institutions in every state, treating well over 600,000 annual admissions and interacting with federal institutes, state offices, county agencies, elected officials, local bureaucracies of criminal justice, education, welfare, and health care organizations, and occasionally even private insurers. The issue certainly is not whether there will be large-scale public support for treatment but how much, what kinds, and for whom. The reasons why society has become interested in treating illicit drug abuse are neither strictly hard-headed nor purely idealistic but rather a combination of the two. These reasons have moved the public not only to permit treatment of illicit drug abuse and dependence in community settings but also to enhance the amount of treatment taking place by substantially reducing the price that the majority of individuals pay for treatment to well below the cost of providing it—often, in fact, to nothing. 1b better understand the logic by which the government arrives at the "right" level of support, it is necessary to grasp firmly the specific rationale for these public subsidies. The reasons for supporting public treatment fit comfortably within the realm of conventional justifications for other public health measures, but that is a very broad realm, indeed (Institute of Medicine, 1988a). In the case of public drug treatment, there are important specific emphases that ought to be made explicit. External Costs Individuals who can be clinically identified as meeting the criteria for drug treatment (whether or not they are interested in treatment to help extinguish their drug-seeking behavior) generally impose serious burdens on other members of society. The harm to victims of violent crime, the damages to the well-being and future prospects of the individual's family, the risk of transmitting hepatitis or HIV infection, and other such burdens are called externalities, or external costs. The problem with external costs is that, unlike the self-imposed consequences of actions, they do not au- tomatically discipline or instruct the individual, which is usually the way harmful behavior is corrected.

PUBLIC COVERAGE 223 Solutions to external cost problems ordinarily take one of two forms. One form is to reassign these costs to the individuals who produce them through selective taxes or confiscations, civil liability, or the imposition of criminal sanctions such as fines or incarceration. I§xing and confiscating the proceeds of illicit drug-related behavior have proved to be difficult and frequently haphazard endeavors; moreover, the individuals who originally impose the external costs are often too poor to pay commensurate civil or criminal fines. Determining an appropriate fine for transmitting serious and even deadly diseases is beyond nearly anyone's capacity. With legislatively mandated sentencing, the consequent sanction for such individuals has increasingly become jail or prison the individual is made to pay a liberty price as a "just desert." What this measure emphasizes is less the burden of harm to individual others and more the moral weight of the drug offense; and it is a moral calculus that assigns the exaction due the criminal's "debt to society." Nevertheless, this price may be considered unsatisfactory in at least two ways. In the first instance, the penal strategy generally does not fully reassign the social costs because society has to pay a substantial price to impose deprivations of liberty on unwilling individuals. Second, to date, imprisonment has not had enough of the desired effect: individuals who have paid the price of incarceration have all too frequently (at the rate of about three felons out of four) come out of prison and reimposed the same criminal burdens on society. There is also a third dissatisfaction. Society is uneasy about the strictly criminal approach to drug consumption. However broad the consensus on maintaining criminal penalties, particularly for trafficking offenses, the historical streams of libertarian and medical ideas continue to affect the nation's collective thinking. Although clearly in the minority, there are respectable voices questioning the entire wisdom of drug laws, even from within the bastions of the criminal justice system. In contrast, no such voices rise in dissent regarding laws that proscribe homicide, sexual assault, robbery, or grand theft (auto). These shortcomings of the criminal approach, in particular, the first two, led originally to the development of the public tier of treatment. As a result of studies in public-tier programs, which are reviewed in Chapter 5, there are now reasonable grounds to believe that at least some modalities of treatment do in fact reduce the external costs of drug abuse and dependence in greater measure than the cost of the treatment itself. Moreover, in doing so, treatment provides some benefits that drug-abusing and drug-dependent individuals themselves seek (although it often takes a substantial amount of exterior pressure or interior misery or both to bring them to that point). This last statement brings up the second mode of dealing with ex- ternalities (the first being to reassign the external COStS): design positive

224 TREATING DRUG PROBLEMS incentives to induce the persons who are producing external costs to stop. Incentives are a carrot that often accompanies the stick of penalties. The committee's review in Chapter 4 indicates that the treatment motivations of drug-abusing and drug-dependent individuals are usually ambivalent, with some degree of desire for recovery, some degree of pressure to avoid drugs, and some degree of desire and compulsion to continue seeking drugs; in other words, applicants show an interest in the benefits of treatment mixed with hostility toward its constraints. Under these circumstances, the money price of treatment may for some fraction of individuals play a pivotal role in determining whether treatment is sought or how much treatment is utilized. For relatively inexpensive treatment such as outpatient care, a partial sub- sidy may make a difference; for relatively expensive residential or inpatient treatment, the cost is high enough that a subsidy may be critical to whether an individual actually receives treatment. A complication enters here, namely, the relationship between public and private benefit. If both the individual and society would benefit from the individual's positive response to treatment, then who should pay for it? One approach is to say that the answer should depend on the proportions of public and private benefit; a second is to express a strong preference for maximizing private payments (for example, through sliding-scale fees); a third strategy is to put the fullest onus on public payment. To be completely efficient in the use of public funding, one would want to lower prices d~scnminately. No one who is prepared to purchase treatment on his or her own at its market price (the cost of production plus markups, reserves, or profit margins, adjusted to competition) should be subsidized. Subsidies should go only to those who would purchase treatment at some below-market price, and the amount should be only what is necessary in each case to assure the purchase. If the external costs of untreated drug consumption (which, on average, treatment can be expected to reduce significantly) exceed the costs of treatment by a large amount and there are individuals who need treatment but do not want it even at zero cost, then the public might even find it optimal to create a "negative price." A negative price is an inducement to enter and stay in treatment that exceeds the minimum cost of helping clients to extinguish drug seeking. The extreme case of a negative price is cash inducement: paying people to enter treatment. A more palatable alternative is incentives in kind, such as amenities that are not strictly needed for treatment (even though some may in fact prove to make treatment more effective) for example, attractive facilities, free coffee, or assistance in dealing with a variety of other social, medical, or psychological problems. Intrinsic medication effects may fulfill this incentive function. For ex- ample, clinically optimal levels of either methadone or naltrexone "block"

PUBLIC COVERAGE 225 the euphoric effects of any other opiates. But the very mild analgesic prop- erties of stabilized methadone doses, in contrast to the virtually complete lack of perceptible effects of naltrexone maintenance, constitute a positive inducement, which may help to explain why methadone maintenance typi- cally retains a substantial percentage of clients whereas naltrexone retains very few. In summary, the combination of high external costs and a reluctant clientele may lead society to want not only to provide treatment for illicit drug abuse and dependence at a reduced cost but even to provide some selected inducements, at least to some potential clients, that go beyond the cost of bare-bones treatment. (A more technical analysis of the issue of treatment demand and pricing is sketched in Figure 7-1.) Income Constraints Whether or not the external social costs equal or exceed and hence begin to efficiently justify- treatment expenditures, there is a second major reason for public support of treatment: the problem of income constraints, or the fact that some people are simply too poor to afford the cost of treatment even if they are very interested in obtaining it. In some respects, society has taken a broad ethical position on income constraints, namely, that there are certain goods and services that should never be denied to anyone on the grounds of inadequate income. Generally, these goods and services fall into one of two categories: items that everyone needs at some minimum level but that most people can afford (e.g., food and shelter) and items that only a few people (relatively speaking) might need very badly at any one time but that most cannot afford at all or without undergoing some severe degree of hardship for example, major medical care. Drug treatment appears to belong in the second category. In these kinds of cases, the government has both encouraged the formation of private compacts (using tax incentives and regulatory guarantees) to help the individual in need~mployer-sponsored health insurance is the prime example and has entered directly into the sponsorship of such arrange- ments, most prominently in the Medicare program. But private insurance and Medicare share the characteristic that eligibility for these forms of coverage depends on making (or having made) ongoing contributions to an insurance pool through regular premiums that are matched by an employer and/or deducted from a steadily incoming paycheck This form of coverage is inapplicable to individuals who do not belong to a private group health insurance plan and are too young (or otherwise lack qualifications) for Medicare eligibility. At a minimum, this group includes an estimated 31 million individuals who are without any health insurance (Moyer, 1989; cf. Chollet, 1988~. It may also include an additional

226 TREATING DRUG PROBLEMS _ 50 in = o 40 o U) U' ._ - UJ o In ~ Ps- 10 LLJ PP— 30 20 LL PI— O G - Ds S 0 40 1 80 120 160 200 Q TREATMENT EPISODES Q. (in thousands) 240 280 FIGURE 7-1 The market for drug treatment showing private and public demand. The great force of external cost considerations affects the whole market for treatment. If treatment episodes are expected to provide benefits to the public beyond those to the recipient by reducing the external costs of untreated drug problems, then that expectation should be reflected in the market by raising the demand schedule for treatment. In other words, at any given price, the amount of treatment demanded should be greater than just that sought by individual clients. This increase in the demand for treatment, which results from induding the benefits to the general public, implies that the socially optimal amount of treatment is greater than the amount that would be provided in a completely private treatment market. This principle is illustrated in conventional economic terms in the figure, which is hypothetical but modeled on realistic assumptions. The purely private market for treatment is represented by the downward-sloping demand curve Dp and the supply curve 5. Their intersection shows the average price, Pp. and total quantity, Qp, of drug treatment episodes that would be delivered in the private marketplace if the government did not intervene. The public benefit from treatment dictates that the social demand for treatment, curve Ds' is higher than the purely private demand for treatment, curve Dp, and the quantity of treatment desired at any price is accordingly greater. When the social value of treatment is recognized in the demand schedule Ds, the socially optimal amount of treatment is indicated lay the intersection of the new demand curve and the supply curve. The socially optimal quantity of treatment Qs is greater than the quantity delivered in the private market Qp. To achieve utilization of treatment at the socially optimal level Qs' subsidization of treatment must be undertaken (by means of governmental or philanthropic subsidies) to make up the difference between Ps, the price of inducing the socially optimal level of treatment, and Pt. the average price that many potential clients would actually be prepared to pay for that many episodes of treatment. 13 million people covered by Medicaid plans and 48 million with private health plans that lack specified coverage for drug treatment services. These 61 million people are covered for emergency services (e.g., drug overdoses) and treatment of physical sequelae of drugs; many would probably be covered for some types of treatment of drug problems under general plan

PUBLIC COVERAGE 227 provisions; and some could afford to pay drug treatment costs out of pocket. In the committee's judgment, however, a large proportion of the 61 million individuals in this country without specified coverage for drug treatment are not covered by their health insurance for appropriate drug treatment in the event they were to need it. There are, in other words, at least 31 million and possibly 92 million individuals for whom insurance coverage of drug treatment may be unavail- able when it is needed; absent stronger data, the approximate midpoint of this range, 60 million, is a reasonable figure to use. For many of these in- dividuals, the out-of-pocket costs of treatment are formidable, particularly for residential or hospital treatment. The committee hazards the further estimate that one-third of the 31 million individuals who are uninsured and one-half of the 30 million who are insufficiently covered might be able to afford outpatient treatment out of pocket. This still leaves roughly 35 mil- lion individuals who could not do so and who would qualify as indigent with regard to buying any form of drug treatment. For residential treatment, the committee's estimate of the number who would be considered indigent rises to 60 million. If society does not want to see drug treatment denied to persons in this group as a result of income constraints, the standard solution is to develop a scheme of differential pricing, which enables the relatively indigent person to pay a below-market price for treatment through a government subsidy or service program, contingent on an accurate determination of his or her level of income or wealth. The income criterion could be graduated according to circumstances; the guiding principle is that the price of treatment should be brought below whatever threshold rules out the individual being able to purchase the needed treatment or at which paying for treatment would create undue hardship. In many cases, using this guideline means the price must be effectively zero. Positive Response to Treatment There is a third principle besides external costs and income constraints that is worth mentioning: the treatment should do good; that is, the client should respond well. Of course, some do not. There are public clients who never achieve significant reductions in their drug-seeking and other criminal behavior (when the latter is present to begin with) during treatment. When those who are not responding well leave treatment, their departure cannot be called an effective result. Yet it does achieve the virtue of efficiency, in that no further money is wasted. When the public (or any other third party) is paying the bill for treatment, the most troubling problem is individuals who neither modify their behavior positively nor leave treatment. There are not many such people, particularly in the more intensive

228 TREATING DRUG PROBLEMS and demanding programs and modalities. For the most part, people who stay in treatment do well as long as they are in it, and they either drop out or are discharged when their behavior deteriorates and therapeutic corrections (if the program makes them) are unsuccessful. This is not to say that most people in treatment are absolutely crime and drug free but that unmistakable improvement over pretreatment conditions is very much the day-to-day norm. In principle, there should be no coverage of individuals who are not expected to respond positively to treatment. But prognostic precision is simply not acute enough to draw bright exclusionary lines. Even previous treatment failure is no sure guide because the route to recovery often leads through several such mistress In drug treatment, as in viral ally all medical care for severe, chronic conditions, the limited capacity to accurately predict individual responses dictates that this principle be applied sparingly, usually on a retrospective rather than prospective basis, therefore erring on the side of treating too many rather than too few. In practice, denial on the grounds of expected nonresponse is exercised very little at the point of admission; instead, it is a judgment made by clients (through voluntary attrition), by clinicians (through discharge decisions), or by third parties such as police officers (by arresting violators of the law). Balancing Treatment Needs and Cost Concerns With declining budgets the norm from the mid-1970s until fairly re- cently, one must assume that there will be continuing budget constraints on drug treatment dollars. It Is difficult to believe, despite notable recent budget increases by the federal government and a few states, that the day may come when public treatment funds overshoot the need for treatment. Ideally, to make the best decisions with limited budget dollars, one should look at every individual for whom a legitimate argument for public support could be made, evaluate the strength of the argument in each instance in terms of relative costs and benefits, and apply a triage or optimizing procedure to achieve the most efficient distribution of limited funds that is, to get the greatest return on the investment of each treatment dollar. This triage would apply not only to whether an individual needed treatment but also to how intensive (and expensive) a treatment is needed for optimal results. However, to calculate precisely for each drug-abusing and dependent Treatment programs do in fact exclude some people whose personal history is unpromising. However, these negative prognostic signs are attended to mostly out of a desire to minimize the risks that nonresponding behavior will disrupt other clients or endanger the clinical setting for example, programs are leery of admitting individuals who are chronically assaultive or known as large-volume drug trallickers.

PUBLIC COVERAGE 229 individual the extent of attributable external costs, the ability to pay, the relative strengths of the desire for and hostility toward treatment (includ- ing the potency of exterior and interior pressures), and the probabilities of response to the various treatment options is a complex and demanding assignment. The specific information needed about individual and program performance, the cost to collect and evaluate it, and the sheer conceptual challenge are all extensive, and there would be unavoidable residual uncer- tainties about the results, in light of the current and foreseeable state of the prognostic arts. Instead of trying to exact the last ounce of efficiency by fine-tuning the structure of price subsidies, some simpler rules of thumb may be (and generally are) employed. For example, ability to pay is usually determined by a preset income maximum that for convenience may be equivalent to local standards for welfare (and Medicaid) eligibility; copayments, if required, are graduated according to very broad income levels, and external cost and motivational issues are seldom explicitly considered in determining direct charges to patients (although they may be very important in admission and treatment planning decisions). Income is obliquely taken as an index of external costs in that low-income drug-abusing and dependent individuals are considered very likely to resort to criminal activities to pay for their drugs. The committee believes it is clear that external cost and income con- siderations are already firmly incorporated into public decisions about the coverage of drug treatment. The external costs, particularly in terms of vio- lent crime and increasingly in terms of harm to young children's lives, have been uppermost in importance. These considerations have been reinforced by the second type of concern that treatment should not be appreciably less available to the poor than to the wellmff and well-insured because it is mostly poor individuals who commit violent crimes and whose children are least protected from neglect or abandonment. There is a further overtone of concern (an echo of the 1960s War on Poverty) that general conditions of racial and income inequality might help cause and perpetuate drug problems and retard recovery, further reinforcing the urgency of public intervention. The principal decision criterion in public coverage is and should be to make publicly subsidized treatment available to those who are doubly needy those who most need treatment according to clinical criteria and who most need financial help to afford it.2 Generally, having a serious 2 exact titration of the inability to pay, so as to marginally reduce public payments to those who are partially able financially, may be expensive and may reduce the desirable incentives that help draw reluctant individuals into treatment; in otherwords, the resulting revenue gains from copay- ment requirements may not be worth it. However, the introduction of means-based copayment requirements for long-term outpatient treatment, such as methadone maintenance, would make sense once stabilization of behavior had occurred. Similarly, a payback principle in kind or in

230 TREATING DRUG PROBLEMS need for treatment stands as a guarantee or, at least, makes it quite probable that external costs are present; moreover, the less the ~ndiv~dual's legitimate financial capacity, the greater these external costs are likely to be. In general, the principle of covering the needy should be applied not only to all those who readily seek treatment but also to all others who can by legitimate means be induced to seek it. Considerations of external costs further argue that there is reason to create incentives beyond minimal coverage of bare-bones programs. Just as the external costs of crime Justin negative ~ncentives~oercion by the criminal justice system, which may be helpful in steering individuals toward treatment these costs justifier positive incentives to some degree, provided they can induce greater motivation and better retention In treatment. The external costs of poor job performance and parental deficiencies may justify positive incentives as well, given that criminal justice coercion of drug-abusing and dependent individuals who are steadily employed or taking care of children, or both, may be impractical or unlikely. In summary, the committee recommends that the principle of public coverage be to provide adequate support for appropriate and timely admis- sion, completion, or maintenance of good-quality treatment for individuals who cannot pay for it, either fully or partly. Public coverage should be invoked whenever such individuals reed treatment, according to the best professional judgment, and seek treatment, or can be induced through ac- ceptable means to pursue it, assuming there is some probability of positive response. FROM PRINCIPLES TO PRIORITIES Chapter 3 concluded that the aggregate need for treatment in the United States at any one time in 19~ involved about 2.5 million drug- dependent individuals and 3 million more individuals who were at least abusing drugs. Chapter 6 indicated that the 1987 survey of treatment providers found about 260,000 clients in treatment at that time, with total annual admissions numbering 850,000. Even allowing for an incomplete count of providers, it is clear that the need for drug treatment according to relevant diagnostic criteria exceeds the number of annual admissions by a substantial amount.3 dollars for successful graduates of therapeutic communities or other programs may also make sense; the prevalence of supportive "alumni groups" and "thirteenth-steppers" reflects this idea. 3 Of course, there are also dynamic considerations: 4 million young people newly enter the prime onset period each year, and an unknown number leave the drug scene. Appendix 7B contains some additional comments on the need for dynamic analysis.

PUBLIC COVERAGE 231 Given the preponderant number of treatment applicants who already seek help from the public tier, their generally low income, the prevalence of criminal histories among individuals needing treatment, and the substantial excess of supply over demand in the private tier (even allowing that this last situation has something to do with cost-containment pressures), the committee estimates that between 60 and 80 percent of those needing treatment for illicit drug abuse and dependence belong in the public tier. The apparent excess of current need for treatment over annual admissions is on the order of 2 million to 3 million individuals. This disproportion between the need for treatment and the number of people receiving treatment seems inconsistent with indications that more potentially usable treatment resources are on hand in some states (and in some programs in other states) than are being utilized. Much of the disproportion is attributable to the circumstance that needing treatment is not the same as wanting it or being able to pay for it, either individually or with assistance. But bringing these elements into better balance is not a simple task. For one thing, despite the recent large increases in federal appropriations for treatment, there is clearly not enough money actually available as yet in the field to implement the principles summarized above. And even if the budgetary commitment to that end were firm, creating actual effective treatment capacity will take time, trial and error, and hard work. Priorities must be established. Where should new monies and energies go first? This choice is clearly a matter of informed judgment. In light of the principles articulated above and the current status of the public treatment system, the committee's recommendation is that priority be given to the following: · closing the most obvious regional gaps in coverage—that is, reduc- ng delays in admission as evidenced by waiting lists for treatment; · improving the average quality, performance, and retention rates of existing modalities by raising the level of service intensity, personnel quality, and experience; by having programs assume more integrative roles with respect to related services; and by instituting systematic performance monitoring and follow-up; i, expanding treatment through more aggressive outreach to preg- nant women and young mothers, those for whom it promises the greatest potential reduction in external social costs; and · further expanding community and institutionally based treatment services to provide treatment to drug-abusing and dependent individuals under criminal justice supervision.

232 TREATING DRUG PROBLEMS Eliminate Waiting Lists There are individuals who want treatment now as it is currently of- fered but who are stymied by the constraints on its availability. The best estimate of the number of such individuals comes from a survey of 43 states conducted by the National Association of State Alcohol and Drug Abuse Directors (NASADAD) in September 1989, which indicated that 66,000 individuals were awaiting treatment admission. This figure is equivalent to more than a quarter of the total daily enrollment in public-tier programs. The 1988 Anti-Drug Abuse Act included a one-time grant program providing $100 million for the reduction of waiting lists. Because this is a one-time allocation, many programs have been leery of applying for the funding: the implication of expanding admissions is to commit to additional space and staffing, and such a commitment would fly in the face of the nonrenewability of these funds. Programs that have waiting lists have found that when they are able to accelerate admissions as a result of expanded capacity, they attract even more applications. The committee believes it is more realistic to consider current waiting lists a minimum estimate of the sustained size of additional interest in treatment and therefore to anticipate a continued increase in service requirements that is at least equal to current waiting lists. Improve Treatment The upgrading of program performance and quality levels is intrinsic to the other priorities and would be needed even if expanded treatment admissions were not an objective. The recent diminution of treatment program resources from the middle 1970s to the late 1980s hobbled many programs' capacity to provide treatment as effectively as the state of the art permitted. Research findings about large variations in program perfor- mance and the consistent importance of retention in predicting outcome all support the need to upgrade per capita funding, quality, and retention levels in treatment. The evidence on the specific components of drug treatment effective- ness and attractiveness is beguiling but slender. One must depend to a large extent on a few careful studies done in methadone programs, on the judgment of experienced clinicians, and on organizational common sense. Some of the personal characteristics, skills, or procedures followed by individual drug counselors make a measurable difference in their clients' performance. Other professionals can usually detect or recognize these qualities (although in the absence of definitive studies, they differ in how to describe them), and there is a market for good therapists whose talents

PUB' [C COVERAGE 233 have been honed on difficult cases, such as drug-dependent criminals. ~a- ditionally, clinical staff in public programs are attractive recruits for private practices or agencies that offer higher pay and a less demanding clientele. Moreover, staff who are overloaded with cases and working in orga- nizations that are underendowed with positive incentives sometimes "burn out": they may simply lose their enthusiasm and effectiveness or actually leave the program. Incentives and tools for upgrading clinical practices, which were a critical part of the agenda of public-tier programs in the early 1970s, have been casualties of retrenchment; in particular, periodic re- training and technical assistance and well-designed systems of performance monitoring diminished and nearly disappeared in the 1980s. The chronic inability of public programs in recent years to keep caseloads within reason and to attract or retain the best counselors is a fundamental problem that more per capita funding can help solve. The same solution applies to reversing the erosion of clinical tools and service intensity. A prominent program need is to be able to afford more frequent and more accurate random drug tests whose results are available quickly. Of at least comparable importance is the systematic multidimensional as- sessment of client needs and the provision, where indicated, of vocational, educational, and specialized psychiatric and medical services; these services may be provided either by incorporation of such capacities into the pro- gram or by referral (particularly, funded referral) to other service agencies and systematic follow-up with them. For example, treating cocaine requires increased use of physicians, nurses, and pharmacists to monitor the early stages of treatment because emerging therapies for cocaine dependence of- ten incorporate transitional medications that, until much greater experience has accumulated, will continue to need individualized prescribing. The upgrading of staff abilities and morale and the modest but criti- cally needed renovation of decrepit facilities and furnishings have multiple significance. Good morale and decent facilities increase the attractiveness of treatment programs and thus their ability to recruit and retain effective staff and effectively motivated clients. Most critically, the competence, quality, and continuity of care givers may well be a critical element in explaining the differential effectiveness of treatment programs. Reach More Young Mothers The committee attaches high priority to treating expectant mothers and single women with young children. The external costs of drug abuse and dependence among this group are especially worrisome because these children's present and future welfare depends so heavily on their mothers' welfare. High risks of drug problems and other severe dysfunctions inhere in children of parents who are abusing or dependent on illicit drugs.

234 TREATING DRUG PROBLEMS Consequently, the committee values children's welfare on both an equity basis they obviously have very limited ability to help themselves because of their physical immaturity, lack of personal income, and inexperience- and in terms of the future social costs that it is strongly suspected these children will bear. Site visits by the committee demonstrated that it is especially hard for expectant women or single mothers of young children (and often, women are both) to receive intensive residential treatment, and sometimes even to maintain regular outpatient schedules, because of child care needs and other medical and social problems. The committee believes that any initiative to bring more of these women into treatment must also emphasize services that will help them find safe, decent dwellings in which to live and productive activities for themselves and their children. The problem of pregnant women who take illicit drugs has received a great deal of attention recently. Although no study has specifically examined the number of expectant mothers in drug treatment, applying the roughly 10 percent annual fertility rate for women demographically similar to those currently in treatment indicates that about 30,000 expectant women receive some drug treatment each year very few of them in programs with a primary focus on and special services for pregnant women. The committee estimates that 105,000 pregnant women a year need treatment. There is no basis to believe that treatment of these women would be appreciably more or less effective than for other adult clients. But even if the distribution of results is the same as for others in terms of extinguishing drug-seeking behavior, that outcome would be worth pursuing more intently because of the external costs to the children. Reaching more pregnant women will require active and expensive outreach. One demonstration outreach project in Harlem, New York (Brown, 1988), cost $850 per expectant mother enrolled in prenatal care, an expenditure completely apart from the cost of drug treatment and prenatal care services as such. Pregnant women are likely to require relatively more intensive residential treatment than most clients owing to the special risks they pose to their babies and their aversion to treatment. For pregnant women with older children and other single women in treatment, onsite care for dependent children is a critical treatment-related need. It is often a major obstacle to enrolling and staying in intensive residential or day treatment because very few programs at present have onsite child care. Despite the stories of abandonment and grave concerns voiced (most often by male professionals) about the "destruction of the maternal instinct" by cocaine dependence, most mothers will not stay in treatment for long if it means separation from their children.

PUBLIC COVERAGE Induce More Criminal Justice Clients to Accept Treatment 235 In 1985 about 25 percent of public-tier clients in 14 states were under probation or parole supervision; extrapolated to the national level, this percentage translates into a census of 55,000 or about 160,000 annual admissions of community-based criminal justice clients. In addition, 30,000 to 50,000 prison inmates were in treatment although these estimates include less specialized counseling, education, and mutual self-help group meetings. These figures indicate a 10 to 20 percent rate of treatment among criminal justice clients who need treatment. These individuals constitute the group whose imposition of high exter- nal costs represents the primordial raison d'etre of the public tier. Because of the flooding of criminal justice channels during the past decade and a half, the induction into drug treatment of suitable, younger criminal justice clients has lagged behind the rates achieved in the 1970s. Yet a central lesson of Chapters 3, 4, and 5 is that treatment, far from being antithetical to the criminal justice system, is complementary to it, sharing its principal goals and offering a resource that may permit more efficient use of enforce- ment, correctional, and judicial facilities and resources. Although there is no way to substantiate this impression, the committee deems it plausible that the erosion of resource intensity and surveillance capacity within treat- ment programs during the period of retrenchment in the 1980s contributed to the increasing pressure on the criminal justice system, particularly from probation and parole violators. THREE STRATEGY OPTIONS The public tier is now on a rapid expansion course, largely as a result of decisions at the federal level. This expansion began in a moderate way with the 1986 Anti-Drug Abuse Act, gained momentum with the 1988 Anti-Drug Abuse Act, and accelerated even more dramatically with the emergency supplemental appropriation to the alcohol, drug abuse, and mental health services (ADMS) block grant and related demonstration authorities late in 1989 (see Table 6-3~. The Offlce of National Drug Control Policy, which was legislatively authorized and established in March 1989, has been assigned a leading role in national strategic planning for drug treatment (as well as enforcement, interdiction, and preventions, whereas the Alcohol, Drug Abuse, and Mental Health Administration (ADAMHA) in September 1989 consolidated the block grant and many of the treatment demonstration authorities in the Office of Treatment Improvement, which has not yet received congressional ratification. fib date, however, there is no settled, detailed plan for this expansion course, although the January 1990 National Drug Control Strategy does

236 TREATING DRUG PROB=MS identify eight national drug treatment funding priorities4 and budget figures for fiscal years 1991-1993. Congress has shaped the block grant and demonstration appropriations through 1986 and 1988 amendments to the ADAMHA authorization codes, but that process is incomplete; a set of 1990 amendments that are currently under committee consideration may entail more sweeping changes in the structure of the federal money streams and targets. ~ inform and provide a common reference point for these policy formulation processes, the committee has developed three detailed strategy options based on the priorities it recommends for adoption: · A core strategy, to deal with existing waiting lists, remedy deficien- cies in program quality and management, and implement modest program initiatives for young women with children. The core strategy would exceed 1989 levels of public-tier operating support by about $1 billion, plus $0.5 billion as an additional one-time investment for staff training and facilities construction and renovation. · A comprehensive strategy, adding to the core plan a substantially greater induction of criminal justice clients and a more ambitious plan for treating drug-abusing and drug-dependent mothers; this comprehensive plan would, in the committee's judgment, provide the optimal level of public treatment resources. The comprehensive plan would entail an annual operating increase over 1989 levels of about $2.2 billion, plus a $1 billion one-time investment. An intermediate strategy following between the core and compre- hensive approaches. The intermediate proposal would cost about $1.6 billion, plus a $0.8 billion one-time charge. 1b estimate the amount of new public financing needed to carry out each of these strategic options, the committee made some key assumptions about such parameters as capital costs, training expenses, the number of individuals who could be induced into treatment at various levels of effort, and the costs of improving treatment performance. The costs and expected numbers of clients to be served are summarized in Able 7-1. 4The eight priorities are as follows: increased availability and quality in drug treatment; addi- tional vocational counseling, training services, and aftercare for recovering addicts; improved and expanded outreach and treatment services for pregnant women and drug-affected infants; expanded availability of treatment services within correctional institutions; development of inno- vative approaches to drug treatment, including drug treatment campuses and special programs targeted toward adolescents and pregnant women; expanded fellowship and grant programs for drug treatment professionals and staff; establishment of the Office of Treatment Improvement within the Department of Health and Human Services to focus on drug treatment quality and ef- fectiveness; and enhanced treatment research, including expanded data collection, medications development, and evaluation of current treatment methods (Office of National Drug Control Policy, 1990:28~.

PUBLIC COVERAGE TABLE 7-1 Three Strategy Options for the Public Tier of Drug Treatment: Estimated Incremental Costs and Client Projections Relative to 1989 237 Cost Element Strategy Type Core Comprehensive Intermediate Annual Costsa Reduce waiting list 330.0 330.0 330.0 Restore funding 412.5 412.5 412.5 Counselor training 19.6 30.1 24.9 Performance data 75.9 112.8 94.4 Expectant mothers Outreach 18.8 112.5 56.3 Treatment 87.9 263.7 175.8 Child care 45.9 77.5 61.7 Probation/parole 0.0 660.0 330.0 Prison 0.0 156.3 78.1 Total 990.6 2,155.4 1.564.5 One-Time Investmentsa Expand residential facilities 278.8 746.2 512.5 Renovate residential facilities 90.0 90.0 90.0 Renovate outpatient facilities 118.1 118.1 118.1 Train new staff 33.2 116.8 75.0 Total 520.1 1,071.1 795.6 Number of clients servedb Average daily censusC 387 607 497 Total annual admissions 1,012 1,505 1,258 aIn millions of 1989 dollars. bIn thousands. CThe average daily client census in 1987 was 212,000; it was estimated at 275,000 in 1989. dTotal annual admissions to public-tier treatment in 1987 were 636,000; total admissions for 1989 were estimated at 815,000. Source: See Appendix 7B for calculations. The dollar amounts are defined in terms of increases over estimated 1989 public outlays by state, federal, and local agencies; the detailed calculations required to arrive at these figures are provided in Appendix 7N It should be noted that the data supporting the costs and results of proceeding along any of the recommended option lines have many uncertainties. As relevant data collection processes are improved and analytical research performed, the models underlying these cost estimates will, over time, be capable of adjustment. The Core Strategy Option The core option focuses on three of the four priorities noted earlier: reduction of waiting lists, improvement of treatment quality, and dedicated

238 TREATING DRUG PROBLEMS efforts to treat expectant mothers and provide onsite child care for other parents of young children. The $330 million estimated cost of the waiting list reduction is based on increasing the daily treatment enrollment by 66,000, which corresponds to the estimate of the NASADAD survey of 43 states in September 1989. The committee calculated the cost of these additional treatment spaces assuming that per capita funding would be restored to 1977-1979 levels and that this restoration would increase retention rates by about 10 percent. There is also funding allotted for one week of specialized annual training or equivalent staff development programming for every clinician and budgeting to implement a comprehensive treatment performance monitoring system that includes intake, discharge, and postdischarge/follow-up data collection and analysis on a sample basis. Also included in the core strategy option is the cost of outreach directed toward pregnant women who need treatment and targeted increases in treatment capacity appropriate for this group, with an aim to reaching 25 percent of the committee's annual untreated prevalence estimate, which is 75,000 women. Finally, the plan includes an allocation for child care for women in public residential programs, including pregnant women with older children. The estimated $1 billion incremental operating cost of the core option nearly doubles estimated 1989 public outlays for treatment; in addition, there is a need for one-time investments in new facility acquisition and construction, long overdue renovation of older clinical sites, and initial training for new staff. The committee considers these supports to be critically important in avoiding dilution of the effectiveness of other efforts to upgrade treatment quality. This one-time set of expenditures need not be made in a single year; however, it cannot be stretched over more than three years without creating a bottleneck in terms of effective treatment capacitor. Comprehensive and Intermediate Strategy Options The comprehensive option requires approximately double the operat- ing increment and one-time outlay of the core plan. Virtually all of this difference is accounted for by two particular initiatives and their implica- tions for staffing, facilities, and related services. One of these initiatives is a large-scale push to induct into treatment many more individuals who are under criminal justice supervision. Although many waiting list clients and some of the pregnant women to be added to treatment censuses under the core plan are under criminal justice supervision, there would not be enough of them under the core expansion to make an appreciable difference in the

PUBLIC COVERAGE 239 operations of the criminal justice system that is, to build up the comple- mentarity that the courts and correctional agencies need to improve the management of their own responsibilities. The committee projects an in- crease in daily treatment enrollment of 132,000 parolees and probationers, which would bring annual admissions to a figure that exceeds half of all those estimated to need treatment. In the committee's view this increase probably pushes to the outside limit the number of criminal justice clients who can be induced or pressured into entering treatment under existing coercive structures. The committee also projects enrolling 50,000 prisoners in new com- prehensive yet drug-specific programs. Although this figure is double the highest current estimate of prisoners in treatment, it may well be that the actual number of people in recognizable drug treatment modalities is much smaller, making this in fact a very large increment again pushing the out- side limit of what is possible. Although prisoners might seem an easy lot simply to order into treatment a truly captive audience it is evident that there are many older prisoners who have tried treatment more than once before and do not like it. It is constitutionally dubious and hazardous to correctional safety to try to increase greatly the amount of coercion used on people who are already in prison. The most fundamental disciplinary sanc- tion in prison is length of time left to serve, but under mandatory release legislation, court orders to limit overcrowding, and the multiple tensions that stain the social order of these "total institutions," manipulation of this sanction to serve any imposed purpose must follow a cautious path. The committee has set the number of expectant mothers to be reached and treated in a comprehensive strategy at 57,250, or three-quarters of the number estimated nationally to need treatment but who are not now receiving it. This figure also seems to be an outer possible limit, a view conditioned by the formidable difficulties that prenatal outreach programs have experienced in trying to induce less severely impaired and dysfunc- tional populations to enter prenatal care programs, which make far fewer demands on time, concentration, motivation, or level of organization than drug treatment would. The intermediate option needs little additional comment. It basically splits the difference between the core and comprehensive strategies, adopt- ing a more conservative level of effort than the comprehensive strategy to induce the criminal and maternal populations to enter treatment. PUBLIC INTERVENTION IN THE 1990s Whatever strategy options or levels of expenditure emerge in the next few years, three basic issues will need to be faced by those responsible for organizing and managing the publicly funded treatment system.

240 TREATING DRUG PROBLEMS · The first issue is how responsibilities should be allocated among the different levels of government and especially between the two levels that have taken the major responsibilities for financing public treatment: the federal government and the states. · The second issue is which financial mechanisms should be used. The fundamental choice lies between two models that have dominated public support of health care services and certain other welfare services: the public health insurance approach and the direct service approach. Public insurance is a commitment to the individual from the government to reimburse certain kinds of treatment costs wherever the individual incurs them (within certain limits). In direct service the government arranges to support particular providers directly, who are then open to serve any individuals meeting stipulated criteria for the receipt of subsidized care. · The third issue is what kinds of controls, disciplines, and incen- tives should be used to ensure that specific expenditure decisions will be appropriate and effective. The concerns here are fiscal prudence, cost containment, and quality assurance and control. The committee believes that the most informed judgment on how to resolve these issues effectively must begin with a careful consideration of the lessons of the recent past, namely, how these types of questions were handled in the period of the last "war on drugs" and its aftermath in the 1970s and during the block grant period of the 1980s. Federal and State Roles in the 1970s The high point of centralized federal command of the drug treatment system was the early 1970s, the period of SAODAP—the Special Action Office for Drug Abuse Prevention (Table 7-2; also see Chapters 2 and 6 and Besteman, 1990~. SAODAP negotiated directly with local treatment providers to set them up to provide treatment or to "buy" their waiting lists through increased funding. It specified the nature of the treatments to be delivered, set reimbursement rates based on those specifications, provided technical assistance to program managers, and organized and delivered clinical and management training to treatment staff. It also created a nationally standardized Client-Oriented Data Acquisition Process (CODAP) that was capable of monitoring the performance of treatment programs in terms of admission characteristics, retention, and patient status at discharge. Nevertheless, it was clear to the federal managers that close supervision of a national system that was rapidly growing and had already passed 100,000 daily clients (treatment slots) was really beyond the scope of a small, albeit powerfully positioned federal agency. As rapid growth outstripped SAODAP's capacity to maintain oversight, the strategy was to "seed and

PUBLIC COVERAGE 241 cede"; that is, build community programs to what seemed an appropriate size and then turn over their further supervision and the responsibility for financial support largely to other authorities, predominantly at the state level. The devolution of the national treatment system to 52 state-level sys- tems (the 50 states plus Washington, D.C., and Puerto Rico) advanced sharply in 1975, when virtually all of the treatment and prevention author- ity of SAODAP (which was then being disestablished) was fully transferred to the National Institute on Drug Abuse in the Department of Health, Education, and Welfare. NIDA converted all direct contracts with treat- ment providers into grants, which implied less federal direction and greater autonomy for the treatment programs. At the same time, additional re- sources and authorities were directed to "single state agencies" designated to take over most of the management responsibilities for administering fed- eral funding for treatment; by 1981 nearly 90 percent of federal support to community-based treatment was routed through the state agencies, mainly in the form of statewide formula grants. Between 1975 and 1981, federal support for drug treatment services flagged, initially under pressure of the 197~1975 recession and climbing federal deficits. Nominal federal treatment dollars remained relatively sta- ble from 1976 through 1980, which, in the face of unprecedented inflation, meant that federal support for the system was steadily decreasing. Fed- eral funds were generally available to the state agencies on the basis that states had to at least maintain their own current levels of appropriation for treatment, although no specific matching-type provisions were involved once the conversion from program-level support to using the state agencies as intermediaries had taken place. The 1980s: Block Grants The 1981 Omnibus Budget Reconciliation Act (OBRA) accelerated state control of the national treatment system and completed the transition of NIDAs mission to one of purely research and educational functions. All community-based categorical funding was consolidated within a block grant that covered alcohol, drug, and mental health services the ADMS block grant, which was administered by NIDAs parent bureau, ADAMHA The total ADMS funding for each state was reduced by 25 percent from the previous year's equivalent funding (the official rationale for this reduction being that the system would be that much cheaper to manage after con- solidation; state officials, among others, considered this rationale not even remotely plausible), and the division of funds among the states was frozen at the previous year's proportions of the equivalent funding. The block grant did not require any particular state contribution, but it continued to

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244 TREATING DRUG PROBLEMS require that states not use the new no-strings federal funding to supplant state support for the same functions- basically putting a floor under state support for total ADMS functions. As the federal role in treatment, outside of basic and clinical research, was reduced to certifying 52 Treasury vouchers, the states acquired virtu- ally sovereign responsibility for the shape and vitality of the public tier. This responsibility included deciding how much drug treatment would be provided out of the combination of ADMS funds and state appropriations, allocating monies among programs and localities, maintaining or revising treatment protocols and staffing and other requirements, monitoring pro- gram performance, delivering technical assistance and training services, and setting reimbursement rates. Many states, however, redirected money for these purposes, as well as authority and responsibility, to their constituent counties. Federally managed data systems that had monitored treatment were discontinued, leaving only a semblance of national information about how treatment dollars were being spent and to what effect. There was, for exam- ple, a 5-year interregnum in the survey of treatment providers (NDATUS), an end to the national client research sample (TOPS), and closing down of the client data requirements (CODAP), although some states elected to retain elements of the CODAP system and provide data summaries to NIDN Federal appropriations to the block grant fund changed modestly be- tween 1982 and 1986, and federal inflation-adjusted support declined fur- ther. State appropriations generally increased, however, depending on local economic conditions and the severity of the state's drug problem. In aggregate, state and local funds by 1987 were about double the federal con- tribution (see Figure bulb). During this period Congress instituted several categorical set-asides and minimum proportions for types of services within the block grant for example, a 35 percent minimum expenditure each for drug and alcohol treatment- which marginally narrowed state autonomy in spending block grant funds. With the Anti-Drug Abuse Act of 1986 came a significant boost in fed- eral support for treatment, nearly doubling the federal funding nominally allocated to drug treatment, adding an alcohol and drug abuse treatment and rehabilitation (ADTR) block grant on top of the ADMS grant, and implementing other increases as well. The act specified that a combination of the size of the population and documented estimation of the need for treatment would be used to determine the allocation per state. The legis- lation indicated Congress's concern over the lack of data on the national treatment system by setting aside 1 percent of block grant funds for collect- ing evaluation data and requiring states to develop and submit plans for their anticipated use of block grant funds and evaluation of the impact of

PUBLIC COVERAGE 245 the additional treatment funds provided through the ADTR. Yet there was no federal response contingent on such plans or evaluations. The federal office could not really question or disapprove state plans, and there was no mechanism of accountability, that is, no way to determine whether the plan was followed or what the results were. There was no fundamental change in the organization or management of the system. The Anti-Drug Abuse Act of 1988 further increased federal appro- priations and began to rebuild some national analytical capacities and flexibilities. It added more categorical set-asides mandating how the money could be spent, again cutting into state autonomy. These set-asides in- cluded a requirement that 20 percent of the substance abuse part of the grant be allocated to prevention activities, 20 percent of the total be spent on women, and at least 10 percent of the drug portion be spent on treating problems involving intravenous drugs. With this act came a congressional mandate for the Department of Health and Human Services to set aside 5 to 15 percent of the grant to collect data about the operation of the national treatment system and give ADAMHA authority to resume making unmedi- ated demonstration and service grants to local programs and governments, without regard to the block formulas for state-by-state division of funds. There was a one-year appropriation for the purpose of grants to reduce waiting lists. The 1988 act also created the new Office of National Drug Control Policy, with broad coordinative authority over federal budgets and activities. At the end of 1989 an additional appropriation, attached to a major transportation bill, increased the alcohol and drug block grant appropri- ations by nearly 50 percent over the 1988 levels. However, a series of proposed accompanying changes in specific authorization levels were not passed. Despite the concern of Congress evidenced in the 1986 and 1988 acts over the state of the treatment system, and despite various perceived efforts to improve information and tighten federal control, the balance of responsibility between state agencies and the federal government has not materially changed from the roles each assumed in 1981. The 1990s: Appropriate Shifts in Federal and State Roles The committee has recommended—on the grounds of reducing exter- nal costs and helping the poor—that drug treatment be made universally accessible and even attractive when it is clinically appropriate. 1b achieve this objective, it seems necessary now, as it was in the early 1970s, for the federal government to undertake a major near-term expansion of its financial commitment to drug treatment. This expansion is clearly a re- sponsibility that Congress and the Bush administration have agreed is

246 TREATING DRUG PROBLEMS appropriate, although there are differences with regard to what this com- mitment should be in dollar terms and some uncertainty about how best to organize the effort. With the new increases in federal funding, it is appropriate that there be a realignment of the federal role. But unlike the situation during the SAODAP era, there is now in place a series of well-developed state administrative capabilities and a large base of public treatment on which to build. Further building will require that federal executive authority be deployed again but with a much more complicated agenda than in the earlier period. In carrying out this expansion, the committee believes that two major considerations management tasks for the federal government pertain: . federal drug treatment funds must be spent efficiently and coor- dinated effectively with other elements in the "war on drugs," including related social, health, rehabilitative, and correctional services; and · the drug treatment system must be clearly linked with other forms of state and federal cooperation to assure the integration of drug treatment with other health and welfare services. The first management task applies in the short term the next three to five years. The committee has serious doubts that the block grant system and its current spending formulas are the best way to use federal authority under the current circumstances. It seems unwise to simply pump major funding increases through the current mechanisms without revising the distribution of authority so that greater responsibility and accountability requirements can flow along with greater sums of money. This task can be fulfilled best, in the committee's judgment, by a strong federal program of categorical spending the direction in which the block grants are already moving as categorical spending floors, set-asides, and data requirements are attached to them. The federal program, however, needs to have as much flexibility on the management level as possible to permit the responsible federal offices to adapt rapidly to the varying needs and administrative environments of states and their localities. Without that flexibility, it is difficult to see how the federal offices can be responsive and be able to facilitate the states' responses to such priorities as treating more women and criminal justice populations and creating performance improvement factors and measurement systems. The financing mechanism that appears most appropriate for achieving these managerial tasks in the near term is neither block grants hedged in with formulas nor federal demonstration grants to providers but rather categorical support of treatment programs administered through state agen- cies by a mechanism like the former statewide services grants or contracts used in the 1970s. The state agencies in turn should develop cooperative agreement-type mechanisms to ensure the involvement of and coordination with appropriate units of state and local government and community-based

PUBLIC COVEMGE 247 programs. The importance of state agency coordination and accountability was recognized by ADAMHA in allocating a substantial evaluation factor (20 points out of 100) to "umbrella grant" proposals for the waiting list funds authorized in the 1988 Anti-Drug Abuse Act. Cooperative agreements can be multilateral, involving multiple levels of government. When the SAODAP expansions of federal funding occurred and money began going directly to providers, the federal office found that it could not expect to expand its staff enough to monitor these programs successfully but had to seek intermediaries the state agencies for this task Because the states were already directly involved in managing the system, they compensated for some of the decline in federal support that occurred in the early 198Os and in fact became a substantially larger source of funds than the federal government. In lieu of fixed formulas for the allocation of funds received by the states (which, as most recently revised, are based on population weighted somewhat by degree of urbanization), the committee recommends that state agencies be required to submit plans that analyze the conjunctions and mismatches among the most current epidemiological information and known treatment capabilities; it further recommends that the states pro- pose annual spending patterns that reflect this information. Formally defined and state-certified addiction treatment programs, and not individ- ual practitioners, should continue to be the recipients of public grants and contracts for addiction treatment. In addition, a portion of the federal dollars must go into technical assistance and data system building to ensure at the state, local, and program levels that this planning effort will have a factual basis. As performance data systems come on line, data should be reported in the following period to indicate whether actual spending details depart from the plan, and why, with analysis, explanation, and adjustment in the subsequent plan. The focus initially needs to be on improvement and response rather than punishment (such as shifting federal funds to mechanisms that bypass state or local intermediaries), but the objective of coming into line with performance standards should apply without much delay. An independent analysis of each state's performance with respect to its planning goals and control of resources should be developed and submitted in a report to Congress on an annual or biannual basis. Taking a longer term view, the general pattern of federal initiatives has been to pour money into categorical programs, then consolidate those programs to reduce the natural accretion of paperwork requirements on recipients and to cap or reduce federal expenditures. Direct categorical funding is the best way to build service capacity rapidly, but historical experience shows that only by making a transition from narrower cate-

248 TREATING DRUG PROBLEMS gorical programs to broader spectrum funding can quality programs be maintained at suitable service levels. The risk in direct categorical support is that recipients and intermediaries will not move toward a self-sustaining, self-adjusting system. When the federal government reduces its funding and direct management involvement, as it inevitably will, the tasks of coordination, accountability, and adjustment may suffer, to the detriment of beneficiaries and the public interest. Therefore, a longer term goal (the next 5 to 10 years) must be kept in view from this point forward in building up the treatment system: namely, to move the mechanisms for funding drug treatment away from central reliance on direct service support and toward consolidation with the mainstream of health care financing for low-income populations, which is the Medicaid system. During the 1980s the growth of private health insurance coverage for drug treatment brought the private tier and its insured clients into the mainstream of health dollars, and although this movement has not been complete, fully efficient, or without troubles in various respects (as discussed in Chapter 8), it has unquestionably improved accessibility to treatment for those covered by private insurance. It is time to stimulate a similar process across the board with Medicaid. In Appendix 7C, the committee provides a more detailed discussion of the current Medicaid system in particular, its eligibility and coverage poli- cies. Currently, however, there is ongoing discussion and reconsideration of Medicaid, as there is of the overall character of health care financing, and it would not be sensible therefore to prescribe too finely for a system that is meant to emerge 5 to 10 years from now. Yet these discussions should take careful note of the conclusion of the appendix discussion: in the committeets judgment, if Medicaid is to assume a consistent role across the board in financing the public tier of drug treatment, federal legislation governing Medicaid must be materially altered so as to address drug treat- ment needs. Such legislation should delineate new eligibility criteria, the kinds of services and providers eligible for reimbursement, and minimum reimbursement levels. It is clear that adequate drug treatment benefits under Medicaid would diminish the need for direct service support of drug treatment programs, particularly if broader eligibility for Medicaid were to emerge for presently ineligible indigent populations. Nevertheless, even if completely universal insurance coverage were achieved, there would still be a need for direct support of public-tier programs to offer outreach and other important adjunctive services to the many individuals for whom low income is not the only barrier to seeking and responding well to treatment.

PUBLIC COVERAGE 249 Transitional Steps Toward the Year 2000 There are five steps that would be particularly useful as incentives toward this transition and that would not compromise the efficiency of the direct sernce support mechanism. The first is to require all parties to cooperative agreements, grants, or contracts involving federal funds to develop and display evidence of progress toward the long-term goal of increasing the receipt of funds from the Medicaid system for example, by facilitating the registration of clients eligible for Medicaid benefits and by meeting relevant accreditation standards familiar to Medicaid, such as those of the Joint Commission on Accreditation of Healthcare Orga- nizations or the Commission on Accreditation of Rehabilitation Facilities. Those respective accreditation organizations, by the same token, need to be pressed when developing standards to explicitly recognize and incorpo- rate knowledge of the public tier of drug treatment providers and their procedures. The second useful step is to begin stipulating matching requirements rather than maintenance-of-effort requirements for increases in grant sup- port to the states. By determining the matching ratio with the same formula used to determine Medicaid matching, the incentive to states to use Med- icaid structures will be increased, and the disincentive having to match every new Medicaid dollar but being able to get more block grant dollars without increasing state appropriations will be removed. The third step is for the federal government to require state Medicaid programs to include drug treatment as part of the standard package of benefits offered to all current (and any newb added) Medicaid-eligible per- sons. The drug benefit package should cover methadone treatment, outpa- tient nonmethadone treatment, and residential treatment in state-accredited freestanding (nonhospital) as well as hospital-affiliated residential facilities and outpatient programs. No special copayments or limitations that is, no copayments or limits not generally applicable to medicaVsurgical benefits- should be applied to drug treatment. It is appropriate, however, to impose referral and utilization controls to ensure that unrestricted self-referral does not lead to the abuse of services. These controls, and particularly limitations on inpatient services, should conform to those described below. For those states with private insurance mandates for drug treatment insurance coverage, the Medicaid drug treatment benefit should be at least as comprehensive as (which does not mean identical with) the mandated private insurance benefit. The fourth step, which applies not only to Medicaid but also to the entire range of health and human services programs, is to reduce gross inconsistencies in the way drug problems are handled in eligibility determi- nations for Medicaid, Aid to Families with Dependent Children, Medicare,

250 TREATING DRUG PROBLEMS Supplemental Security Income, and other income maintenance, education, and housing assistance entitlement programs. These inconsistencies cre- ate a bureaucratic nightmare for the drug treatment programs and state agencies that draw on more than one such source of funds which most of them try to do. The responsible federal agency should analyze definitional inconsistencies among federal programs and lay out a plan to minimize resulting problems. The fifth step is to develop a thoroughgoing system of public utilization management. Many of the components of such a system were developed in the SAODAP period but were subsequently disestablished. Moreover, a substantial portion of the utilization management efforts now under way to control costs in the alcohol/drug/psychiatric and the general medicaVsurgical benefit areas of Medicare and private health insurance are quite similar to the controls instituted by SAODAP. Utilization Management Utilization management describes arrangements to define access to effective treatment while keeping costs at efficient levels (Gray and Field, 1989~. Good utilization management works to ensure that a fully ap- propriate and needed range of services is used and that different service components are coordinated. The most fundamental principles of such management are that access to and utilization of care should be controlled and managed on a case basis by "neutral gatekeepers" or central intake personnel (although the central intake function may need to be dispersed geographically). These personnel should be regulated by certification stan- dards and undergirded by time-limited, performance-accounted licenses and contracts. Client assessment, referral, and monitoring of progress in treatment should be reviewed (or performed) independently of the treatment provider. These personnel should have appropriate clinical credentials that include the understanding that longer residential and outpatient durations are strongly correlated with beneficial results among public clients. Effective utilization management should recognize that drug abuse and dependence are chronic, relapsing disorders and that for any one client, more than one treatment episode may be needed and different types of treatment may need to be tried. The gatekeepers should have access to ongoing per- formance evaluation results and responsibility for implementing specific cost-control objectives. As with the implementation of planning and perfor- mance accounting on a large scale, the central intake function should focus initially on improvement and response and not punishment. Yet here, too, the principle of coming into line with performance standards must apply without much delay.

PUBLIC COVERAGE 251 There should be rigorous preadmission and concurrent review of all residential drug treatment admissions, and especially of hospital admissions, and concurrent review of outpatient treatment. Unlike the objective in utilization management of acute hospital care for most medical conditions, which is basically to hold inpatient lengths of stay to a minimum, the objective for drug treatment services should be to increase client retention in appropriate, cost-efficient treatment settings. The major cost-control concern in this area is the use of high-cost treatment when lower cost alternatives could be as effective. This hazard attaches principally to acute care hospital inpatient services for detoxi- fication or rehabilitation treatment. Utilization management is a highly appropriate way to check this hazard because no modality of drug rehabil- itation treatment as such requires continuous, onsite access to acute care hospital services. However, if other criteria (as specified below) dictate hospitalization, drug treatment may begin in an acute care setting and continue elsewhere or shift to more appropriate cost rates when acute care requirements end. The scientific basis of utilization management of drug treatment is at present rudimentary, but intake specialists should at least be required to demonstrate an understanding of diagnostic criteria and effectiveness findings for drug treatment programs. A rigid limit on the number or duration of treatment episodes permitted to individuals is inadvisable; a better method Is to employ clinical judgment about the client's probability of responding positively to treatment. The public tier has generally not been heavily invested In hospital- based drug treatment, and this should continue to be the case but not as a matter of rigid exclusion. The committee recommends that hospital-based drug services be reimbursed at the same level as nonhospital residential treatment rates, unless there is evidence that a client specifically requires continuing acute care hospital services. Hospital-based drug detoxification should only be covered in the event of medical complications such as those noted below or the lack of appropriate residential or outpatient facilities nearby. Indications for hospital-based inpatient drug detoxification are the following: · serious concurrent medical illness such as tuberculosis, pneumo- nia, or acute hepatitis; history of medical complications such as seizures in previous detox- ification episodes; · evidence of suicidal ideation; · dependence on sedative-hypnotic drugs as validated by tolerance testing (therapeutic challenge) to determine the appropriate length of stay; and

252 TREATING DRUG PROBLEMS · history of failure to complete earlier ambulatory or residential detoxification versus completion in inpatient settings. As perhaps the most important and immediately needed utilization management requirement, the committee recommends that all drug treat- ment programs receiving public support be required to participate in a client-oriented data system that reports client characteristics, retention, and progress indicators at admission, during treatment, at discharge, and (on a reasonable sampling basis) at one or more follow-up points. There should be periodic, independent investigation on a sampling basis of the quality and accuracy of the data system or systems, and the systems should be designed to dovetail with ongoing services research and data collection in other government agencies and units concerned with drug problems. (For example, there should be attention to "linkage" questions about numbers of arrests and emergency room visits for comparability with the Drug Use Forecasting iDUF] and Drug Abuse Warning Network [DAWN] systems; see the discussion of research needs in Chapter 5.) Certification for pub- lic support should be time limited and based on performance—especially client retention and improvement rather than on process standards. Per- formance is to be demonstrated by outcome evaluation, and the standards of performance adequacy should be informed by past and ongoing treat- ment effectiveness research on retention and outcomes. THE SPECIAL CASE OF VETERANS' COVERAGE The Department of Veterans Affairs represents a special case of public coverage. The VA is a potential provider of health care for 26.9 million surviving veterans of military service—more than 10 percent of all U.S. citizens. However, its total outlay for medical and hospital care in 1988 was $10.3 billion, which is less than 2 percent of total health expenditures. Although all former military personnel are nominally eligible for treatment in VA health facilities, all hospital, nursing home, and outpatient care provided through the VA is now rationed on a priority basis. Of first priority are category A veterans (41 percent of the total veteran population), those with primarily service-related injuries or health problems who are receiving VA pensions or who have low incomes. Category ~ veterans (7 percent of veterans) have low incomes but no service-connected disabilities. Category C veterans (52 percent) have higher incomes; they are last in priority and must make copayments to receive VA care. In the first year (FY 1987) of these standards, 95 percent of admissions to VA facilities were from category A; only 2 percent each were from categories B or C. Although there are 11 million veterans eligible for VA health services, in FY 1989 only 3.3 million of them requested health services of one kind or another.

PUBLIC COVERAGE 253 The VA operates a system of 172 general medical facilities that include 56 inpatient drug abuse programs, mostly chemical dependency modali- ties but some modified therapeutic communities, and 66 outpatient drug abuse programs. About one-sixth of outpatients in the VA system are on methadone maintenance. Although this system is accessible (though not always convenient) to most veterans for purposes of nonemergency inpa- tient treatment, it entails commutes of several hours or more for some veterans, which is not suitable for outpatient treatment. (The VA can ar- range and pay for veterans to be treated in public programs under certain circumstances.) The VA drug treatment programs delivered 560,000 inpatient days of care to 17,250 individuals and 919,000 outpatient visits to 19,800 individuals in EY 1988. In addition, 18,800 individuals with primary diagnoses of drug dependence received other kinds of inpatient treatment in general medical or psychiatric wards, and 2,050 received care in nonspecialty outpatient clinics. (There is an unknown degree of overlap among these populations In different treatment settings.) The VA system probably treats more individuals than the public tier in any state except California or New York. But is this level of sentence high enough? There is reason to think it is not. Drug problems among veterans have been a significant issue for about 20 years. Approximately 8.2 million men and women served during the Vietnam combat period, of whom nearly 40 percent were actually stationed at some time in southeast Asia. A study of personnel returning from duty in Vietnam in 1973 found that 43 percent had consumed illicit drugs there. Consumption rates declined dramatically, however, upon their return home, and only 10 percent reported any use in the first six months or more after returning; 4 percent reported more-than-weekly use for a month or more (Robins et al., 1974~. A more recent study found drug abuse or dependence in about 1.5 percent of veterans who served during the Vietnam War era, which would equal about 125,000 veterans of that era in need of drug treatment (Robins, 1974~. The Treatment Outcome Prospective Study (Hubbard et al., 1989) closely examined the military experience and discharge status of 11,200 clients admitted to drug treatment programs in 10 major cities during 1979-1981 and found that 14.5 percent of all admissions were veterans with honorable, general, or medical discharges (another 2.7 percent of admissions had dishonorable discharges). Very similar proportions were seen across different modalities and in different cities. Even in Philadelphia, which has a major VA methadone treatment program that was not included in the TOPS sample, eligible veterans constituted 15 percent of TOPS methadone admissions. Virtually all of these individuals had incomes low enough to make them eligible for category A or B status under the VA priority system.

254 TREATING DRUG PROB! EMS Applying the 15 percent proportion to the 640,000 admissions to public-tier treatment programs in 1987 suggests that 90,000 to 100,000 admissions to these public treatment programs were veterans eligible to receive treatment from VA facilities. Even if one assumes that the propor- tion of veterans entering drug treatment in the late 1980s was substantially less- let us say, one-half or even two-thirds less than the number in 19 79- 1981, that still totals 30,000 to 45,000 veteran admissions to the public tier. It appears very likely that a large proportion of eligible category A or B veterans were receiving drug treatment outside of the VA system, perhaps as many as were treated inside it. No study has closely examined whether large numbers of veterans are in fact still entering public programs instead of VA programs. Neither is it clear whether these veterans had attempted unsuccessfully to gain admit- tance to VA treatment programs or whether veterans today are unsuccessful in gaining admittance. It is only strongly suggested by the available data that the VA may not be serving a major proportion of veterans who are eligible for and need drug treatment. In the past several years the VA has targeted drug programs for drastic budget reductions in order to meet overall fis- cal limitations. At the very least, outpatient or residential drug treatment services furnished directly by VA facilities or by contract should be made available to meet the needs of former inpatients. CONCLUSIONS The committee has developed recommendations regarding the public coverage of drug treatment in light of some explicit principles that jus- tify public coverage, and these principles in turn suggest specific priorities for the expansion of the public tier that is now under way. The com- mittee identified as principles that public coverage should seek to reduce external social costs in particular those relating to crime and family role dysfunctions recognizing that this objective often requires actively induc- ing people to seek treatment, and that it should remedy constraints arising from inadequate income. Public coverage should provide adequate support for appropriate and timely admission, as well as completion or maintenance, of good~uality treatment for individuals who cannot pay for it (fully or partly) whenever such individuals need treatment, according to the best professional judg- ment; whenever they seek treatment; or whenever they can be induced through acceptable means to pursue it, assuming there is some probability of positive response. The committee estimates that 35 million individuals qualify as indigent with regard to private purchase of any form of drug treatment; that is, they are neither adequately insured nor able to pay out of pocket for appropriate forms of specialized treatment if needed and thus

PUBLIC COVERAGE 255 would have to rely on public services. For residential drug treatment, the committee's estimate of those who are unable to afford it if needed rises to 60 million. The resources needed to achieve the general goal of public coverage represent a major increase in public support for treatment, and even under the current conditions of extraordinary public concern about the drug problem and the possibility of commensurate appropriations, everything cannot be done at once. Priorities for treatment thus need to be defined. The committee's recommendations on priorities for public-tier expansion are the following: . end delays in admission when treatment is appropriate, as evi- denced by waiting lists; improve treatment (by raising the levels of service intensity, per- sonnel quality and experience, and retention rates of existing modalities; by having programs assume more integrative roles with respect to related services; and by instituting systematic performance monitoring and follow- up); · expand treatment through more aggressive outreach to pregnant women and young mothers; and · further expand community-based and institutionally based treat- ment of criminal justice clients. it Is possible to estimate the amount of new public financing needed to meet these priority objectives, although to do so, key assumptions must be made about such parameters as capital costs, training expenses, and the number of individuals who could be induced to enter treatment at various levels of effort. The committee judges that the amount needed to upgrade and expand the drug treatment system, beyond current spending rates, is $2.2 billion in annual operating costs (plus $1.1 billion in one-time costs) for a comprehensive plan, $1 billion annually (plus $0.8 billion up front) for a core plan, or $1.6 billion annually (plus $0.5 billion in up-front costs) for an intermediate plan. Because the data supporting the costs of the recommended strategies are uncertain, it is essential that relevant data collection be developed very quickly and its products analyzed as soon as possible. The committee's recommended strategies lead to a consideration of needed changes in how to manage the public tier. These issues divide into the following: the roles and interrelations of the states, the federal government, and public-tier providers; the most appropriate shorter and longer term financing mechanisms for providing public support (direct service programs versus public insurance); and the controls needed to make the most effective and efficient use of public funds.

256 TREATING DRUG PROBLEMS State governments have played the major role in financial administra- tion and quality control of drug treatment programs in recent years, but there has also been cyclical movement between state and federal leader- ship. The federal government originally built most of the public tier of providers and then transferred responsibility for regulating and supporting this tier largely to the states; it is now moving back into the lead role. This expansion of federal support should be accompanied by more active, centralized direction and control of treatment resources. At present, both direct service grants or contracts and reimbursement through Medicaid (and similar programs) play some part in supporting the public tier. Direct program support is much larger and will continue to grow as the federal grant and demonstration programs expand. Emphasis on direct service is an appropriate model for directed system building, but long-term system maintenance may be better served by a proportionately greater use of public insurance financing supplemented by direct service grants to ensure critical program elements such as outreach and integration with nonhealth services. The ground should be prepared to "mainstream" drug treatment more fully, incorporating it into public health care financing for the poor, that is, Medicaid. Under either support mechanism, the protection and stimulation of program quality, efficient operation, and appropriate utilization are crucial. Utilization criteria and regular outcome analysis should be more generally deployed in drug treatment systems. Central intake functions based on clear clinical criteria, performance measurement and contracting, and outcome analysis are critical components of a system of treatment performance disciplined by information and incentives. In the special case of drug treatment for low-income veterans, enough evidence has accumulated to provoke concerns that the VA may not be providing an adequate range of services. There is probably a need to expand VA outpatient drug treatment programs, and the adequacy of the VA residential system needs comprehensive evaluation. APPENDIX 7A BASELINE AND STRATEGY OPTION CALCULATIONS Baseline Comparison Values All cost estimates for the committee's three strategy options are based on the most recent data available at the end of 1989 concerning the size and financing of the public treatment system. According to the National Drug and Alcoholism Meatment Utilization Survey compiled in late 1987 and early 1988 (see Chapter 6), the public tier of community-based drug treatment providers treated at least 636,000 clients during 1987, had 212,000

PUBLIC COVERAGE 257 individuals enrolled in treatment in October 1987, and had annual revenues of $800 million. This tier includes a very small proportion (less then 10 percent) of privately reimbursed clients and revenues. (In addition, a very small number of publicly financed clients were treated by private-tier providers.) These baseline values are biased downward somewhat because the 1987 survey was incomplete (some providers did not respond at all or responded only partially) and resources and clients increased between 1987 and 1989. In a number of the projection components of the strategy options (e.g., costs of training, renovations, expansion of treatment facilities), 1987 baseline values are used for estimation. 1b the extent that these values are below the actual 1989 values, the committee's projections underestimate future resource requirements. The committee imputed a provisional set of 1989 estimates for the public tier of providers, pegging expenditures at $1.1 billion, the number of clients currently in treatment at 275,000, and the number of clients treated during the past year at 815,000. The imputation is based on partial information about increases in funding and clients served. Expenditures in public-tier treatment in 1989 were at least $1.1 billion, based on extrapolat- ing the 17 percent annual increases in public drug plus alcohol treatment funding reported by state drug and alcohol agencies between 1985 and 1988 (Butynski and Canova, 1989, and prior years). According to the same source, the number of drug clients treated increased by about 20 percent annually; these authors, however, attribute an unknown proportion of this increase to improvements in the comprehensiveness of state data systems (for example, including clients treated in community mental health centers). The committee therefore has imputed a 13.3 percent annual client increase (two-thirds of the apparent annual change, allowing for a small inflation adjustment). CORE STRATEGY OPTION Annual Recumng Costs Eliminate waiting lists Increase daily treatment enrollment by 66,000 (survey of 43 states in September 1989 by NASADAD shows minimum need of 66,000 slots). Fund at new rate per client in treatment $5,000 per client in treatment, or $1,860 per client treated (based on increased resources per client and retention). Keep current mix of residential and outpatient treatment. 66,000 x $5,000 = $330 million

258 Restore finding per client to 197~1979 level TREATING DRUG PROBl EMS Increase reimbursements per client by 25%. Expect client retention to increase by 10%; therefore, admit same number of clients per year, with current census increasing by 10%. Keep current mix of residential and outpatient treatment. ($1.1 billion x 1.25 x 1.10)—$1.1 billion = $412.5 million Staff~aining Assume minimum of 26,000 staff in 1989. Assume 39,200 total staff in future, which equals 26,000 staff in 1989 divided by 275,000 clients in 1989 times 377,900 clients in future times 1.1 for increase in staffing intensity. Assume annual training expense of $500 per staff person (average S days/year at $100 per day). 26,000 x $500 = $13 million, first year 39,200 x $500 = $19.6 million, subsequent years Program/client performance monitoring system Assume 815,000 annual public-tier clients in 1989. Core scenario treats 196,600 more clients annually. Estimate $25 per client for client reporting at intake, during treatment, and at discharge. Assume postdischarge follow-up performed on 25% of public clients. Estimate $200 per client tracked and interviewed to perform follow-up assessment after discharge. (815,000 + 196,600) x [$25 + (0.25 x $200~] = $75.9 million Active outreach to expectant mothers Assume active outreach to drag-using expectant mothers reaches 18,750 at a cost of $1,000 each (about the cost per expectant mother reached in a demonstration outreach in Harlem, NY, cited in Institute of Medicine report on neonatal care [Brown, 1988~. 18,750 x $1,000 = $18.8 million

PUBLIC COVERAGE Meat 18,750 expectant mothers 259 Assume half of recruited expectant mothers participate in 6 months of therapeutic community treatment ($12,500 per year plus 25% increase), and half get 6 months of outpatient treatment ($2,500 per year plus 25% increase; costs documented in Chapter 6~. [9,375 x ($12,500 x 1.25) / 2] + [9,375 x ($2,500 x 1.25) / 2] = $87.9 million Children of mothers in residential programs Assume 25% of the 28,600 public residential clients are female (Institute of Medicine analysis of 1987 NDATUS). Assume residential treatment given to 10.6% of waiting list (same as the proportion of 1987 NDATUS public clients in residential programs) but only 25% of those entering will be female. Of 18,750 additional expectant mothers treated per year, half get residential care of average 6 months. Assume 22.5% of women have one or more children, and these average 2.5 children each (communication from R. L. Hubbard, special analysis of TOPS data). Assume domiciliary child care costs of $500 per child/month, or twice the cost of inexpensive day care ($6,000fyear). [~28,600 x 1/4) + (66,000 x 0.106) x 1/4) + (18,750 x 1/2 x 1/2~] x 0.225 x 2.5 x $6,000 = $45.9 million One-time Capacity Expansion/Improvements Residential capacity expansion Increased length of stay requires additional 2,250 beds. Waiting list expansion requires 7,000 beds. Expectant mothers expansion requires 4,688 beds. Assume construction cost of $20,000 per client space (from Donald McConnell, executive director of the State of Connecticut Alcohol and Drug Commission; alternative estimate of $26,000 per client space from David Mactas, president of Marathon House in Rhode Island). (2,250 + 7,000 + 4,690) x $20,000 = $278.8 million Repair existing residential facilities Assume cost of repairing space in use is 20% of cost of building (0.20 x $20,000 = $4,000 per bed).

260 Assume 22,500 public-tier residential beds in use in 1987. 22,500 x $4,000 = $90 million Repair existing outpatient facilities TREATING DRUG PROBLEMS Assume 189,000 enrolled in public-tier programs. Assume repair costs of 20% of upgraded annual cost, which equals $2,500 per client year times 1.25, or $3,125. 189,000 x 0.20 x $3,125 = $118.1 million Grain additional staff Assume minimum of 26,000 staff in 1989. Assume requirement for 13,300 additional staff, which equals 26,000 staff in 1989 divided by 275,000 clients in 1989 times 377,900 clients in future times 1.1 for increase in staffing intensity. Assume $2,000 per additional staff for first 10,000 (assumes most with some prior experience or related training in drug problems) and $4,000 per each additional staff (minimal or no closely related experience or training). 10,000 x $2,000 + 3,300 x $4,000 - $33.2 million COMPREHENSIVE STRATEGY OPTION ~ nual Recurring Costs Eliminate waiting list Same as under core option. $330 million Restore Jilnding per client to 197~1979 level Same as under core option. $412.5 million Staff training Assume minimum of 26,000 staff in 1989. Expect 60,200 total staff in future, which equals 26,000 staff in 1989 divided by 275,000 clients in 1989 times 578,600 clients in future times 1.1 for increase in staffing intensity. Assume annual training expense of $500 per staff.

PUBLIC COVERAGE 26,000 x $500 = $13 million, first year 60,200 x $500 = $30.1 million, subsequent years Program/client performance monitoring system 261 Assume 815,000 annual public-tier clients in 1989. Compromise scenario treats 689,600 more clients annually. Estimate $25 per client for client reporting at intake, during treatment, and at discharge. Assume postdischarge follow-up performed on 25% of public clients. Estimate $200 per client tracked and interviewed to perform follow-up assessment after discharge. (815,000 + 689,600) x [$25 + (0.25 x $200~] = $112.8 million Aggressive outreach to expectant mothers Assume aggressive outreach to drug-using expectant mothers reaches 15% with increasing cost per expectant mother reached (18,750 reached at $1,000 each plus 18,750 reached at $2,000 each plus 18,375 reached at $3,000~. 18,750 x $1,000 + 18,750 x $2,000 + 18,750 x $3,000 $112.5 million Meat 56,250 expectant mothers = Assume half of recruited expectant mothers participate in 6 months of therapeutic community treatment (currently $12,500 per year, funding upgraded by 25%), and half get 6 months of outpatient treatment (currently $2,500 per year, funding upgraded by 25%~. (28,125 x $12,500 x 1.25 + 28,125 x $2,500 x 1.25) / 2 $263.7 million Children oimothersinresidentialprograms = Same as under core option except 56,250 expectant mothers treated per year. [~28,600 x 1/4) + (66,000 x 1/4 x 0.106) ~ (56,250 x 1/2 x 1/2~] x 0.225 x 2.5 x $6,000 = $77.S million Comprehensive probation emphasis on treatment Increase daily treatment enrollment of probationers or parolees by 132,000 (double the waiting list number).

262 TREATING DRUG PROBLEMS Fund at new rate per client in treatment- $5,000 per client in treatment, or $1,860 per client treated. Keep current mix of residential and outpatient treatment. 132,000 x $5,000 = $660 million Comprehensive prison treatment Increase daily prison treatment enrollment by 50,000, or twice the compro- mise goal (average treatment retention, 6 months). Assume $3,125 per treatment year delivered in prison. 50,000 x $3,125 /2 = $156.3 million One-time Capacity ExpansionJImprovements Residential capacity expansion Increased length of stay requires additional 2,250 beds. Waiting list expansion of 25% requires 7,000 beds. Criminal justice system expansion also adds 50% (14,000 beds). Expectant mothers expansion requires 14,060 beds. Assume cost of $20,000 per additional space (discussed above). (2,250 + 7,000 + 14,000 + 14,060) x $20,000 = $746.2 million Repair enacting residential facilities Same as under core option. $90 million Repair existing outpatient facilities Same as under core option. $118.1 million Main additional staff Assume minimum of 26,000 staff in 1989. Assume requirement for 34,200 additional staff, which equals 26,000 staff in 1989 divided by 275,000 clients in 1989 times 578,600 clients in future times 1.1 for increase in staffing intensity. Assume $2,000 per additional staff for first 10,000 (assumes most with some prior experience or related training in drug problems) and $4,000 per each additional stab (minimal or no closely related experience or training). 10,000 x $2,000 + 24,200 x $4,000 = $116.8 million

PUBLIC COVERAGE Eliminate waiting list INTERMEDIATE STRATEGY OPTION Annual Recurring Costs Same as under core option. $330 million Restore~ndingperclienttol97~19791evel Same as under core option. $412.5 million Staff training 263 Assume minimum of 26,000 staff in 1989. Expect 49,800 total staff in future, which equals 26,000 staff in 1989 divided by 275,000 clients in 1989 times 478,300 clients in future times 1.1 for increase in staffing intensity. Assume annual training expense of $500 per staff. 26,000 x $500 = $13 million, first year 49,800 x $500 = $24.9 million, subsequent years Program/client performance monitoring system Assume 815,000 annual public-tier clients in 1989. Compromise scenario treats 443,100 more clients annually. Estimate $25 per client for client reporting at intake, during treatment, and at discharge. Assume postdischarge follow-up performed on 25% of public clients. Estimate $200 per client tracked and interviewed to perform follow-up assessment after discharge. (815,000 + 443,100) x [$25 + (0.25 x $200~1 = $94.4 million Aggressive outreach to expectant mothers Assume aggressive outreach to drug-using expectant mothers reaches 18,750 at $1,000 each plus 18,750 additional at $2,000 each. 18,750 x $1,000 + 18,750 x $2,000 = $56.3 million Meat 37,500 expectant mothers Assume half of recruited expectant mothers participate in 6 months of therapeutic community treatment (currently $12,500 per year, funding upgraded by 25%), and half get 6 months of outpatient treatment (currently $2,500 per year, funding upgraded by 25%~.

264 TREATING DRUG PROBLEMS (18,750 x $12,500 x 1.25 + 18,750 x $2,500 x 1.25) / 2 = $175.8 million Children of mothers in residential programs Same as under core option except 37,500 expectant mothers treated per year. [~28,600 x 1/4) + (66,000 x 1/4 x 0.106) + (37,500 x 1/2 x 1/2~] x 0.225 x 2.5 x $6,000 = $61.7 million Modest probation/parole induction Increase daily treatment enrollment of probationers or parolees by 66,000 (equal to prior increase to admit waiting list). Fund at new rate per client in treatment $5,000 per client in treatment, or $1,860 per client treated. Keep current mix of residential and outpatient treatment. 66,000 x $5,000 = $330 million Modest prison treatment Increase daily prison treatment enrollment by 25,000. Fund at $3,125 per treatment year delivered in prison (assumed as equal to annual funding of outpatient because residential costs are already covered by prison). 25,000 x $3,125 = $78.1 million One-time Capacitor ExpansionlImprovements Residential capacity expansion Increased length of stay requires additional 2,250 beds. Waiting list expansion of 25% requires 7,000 beds. Criminal justice system expansion also adds 25% (7,000 beds). Expectant mothers expansion requires 9,375 beds. Assume annual cost of $20,000 (see core estimates). (2,250 + 7,000 + 7,000 + 9,375) x $20,000 Repair existing residential facilities Same as under core option. $90 million = $512.5 million

PUBLIC COVERAGE Repair easing outpatient facilities Same as under core option. $118.1 million Fain additional staff 265 Assume minimum of 26,000 staff in 1989. Assume requirement for 23,750 additional staff, which equals 26,000 staff in 1989 divided by 275,000 clients in 1989 times 478,300 clients in future times 1.1 for increase in staffing intensity. Assume $2,000 per additional staff for first 10,000 (assumes most with some prior experience or related training in drug problems) and $4,000 per each additional staff (minimal or no closely related experience or training). 10,000 x $2,000 + 13,750 x $4,000 = $75 million APPENDIX 7B MODELING FUTURE TREATMENT NEEDS AND EFFECTS All of the strategy options presented here involve prospective resource requirements and expenditures over the next three to five years. How long such needs will last is a very important question, but unfortunately there is no solid base on which to ground the answer. The goal of early aggressive initiatives is obviously to reduce current and future problems and requirements for drug treatment and enforcement expenditures in the future. Although there is evidence that drug treatment reduces the treated individual's likelihood of future drug use and criminal activity, this evidence must be incorporated into a systematic epidemiological model of drug consumption across the population, considering factors that affect onset, progression, duration, recovery, and relapse, as well as the respective effects of prevention, enforcement, and treatment. A dynamic model is required that predicts the potential need for treatment services over time contingent on alternative public policies. One might hypothesize that a "status quo" policy of limited availability of treatment with current prevention and enforcement policies would produce a gradually increasing need for treatment. "Legalization" of currently illicit drugs could result in dramatic increases in the clinically defined need for treatment (although legalization proponents contend this tendency to increase need would be offset in terms of economic costs and perhaps clinical criteria as well by reduced criminal activity). Intermediate anti-drug policies (treatment, prevention, and enforcement) could be expected to progressively reduce the need for treatment over time relative to the status quo of limited treatment

266 TREATING DRUG PROBLEMS availability. The alternative scenarios represent fears and desires regarding the effectiveness of drug policy; what is required is sophisticated analysis and modeling of the effects of different anti-drug policies on the number of drug users, their legal and criminal behaviors, and their need for treatment. Although rudimentary dynamic models of heroin and cocaine use have been developed (Levin et al., 1975; Hunt and Chambers, 1976; Gardiner and Schreckengost, 1987; Homer et al., 1988), no one has yet produced a model that incorporates all drugs or simulates the effects of public policy variables (prevention, treatment, and enforcement). Consequently, the strategy options described earlier in this chapter must be considered short- to medium-term estimates, and judgments about more distant future requirements must be left in abeyance at present. APPENDIX 7C MEDICAID Although the ADMS block grant has been the principal federal mech- anism to support the public drug treatment system during the 1980s, the public health insurance plans, Medicaid and Medicare, have devoted a notable amount of resources and attention to drug treatment in recent years. Coverage by Medicaid is the major alternative to grant and contract mechanisms as the way to provide public coverage. Medicaid is the major mechanism of public health care financing for low-income people in the United States who by and large cannot afford individual private health policies and do not hold jobs that include employer-sponsored group plan coverage with the obvious exception of the large group of people with low incomes who receive their primary health coverage from Medicare.5 The Medicare population of 32 million is mostly over 65 years of age and is relatively peripheral with regard to the kinds of drug problems that most engage public concern. Therefore, Medicare Is not a key element In considering public-tier funding. 5 In addition, certain large populations depend on health programs of the Department of Vet- erans Affairs and the Department of Defense (DoD) for access to drug treatment. Generally, the committee has not considered populations covered by the specialized programs of DoD military personnel and dependent~as part of this study, except insofar as VA programs were discussed earlier in this chapter. 6 To put the point more concretely, illicit drug abuse and dependence are not major cost factors in Medicare, nor do Medicare clients figure prominently in the financing of drug treatment pro- grams. In 1983, for example, there were 4,451 general hospital admissions of Medicare clients with a primary diagnosis of drug dependence or abuse 0.04 percent of the 10 million annual Medicare hospital admissions. (By comparison, there were 53,019 Medicare admissions with a primary diagnosis of alcoholism [Ha~wood et al., 1985~.) In 1987, drug treatment programs of all modalities reporting to states admitted only 1,300 clients aged 65 and older (Butynski and Canova, 1988~.

PUBLIC COVERAGE 267 A few states now use Medicaid on a fairly extensive basis to support drug treatment services, and it has some role in nearly all states. Enough states increased their use of Medicaid during the 1980s that, according to the NDATUS results, from 1982 to 1987 public third-party reimbursements (which are primarily Medicaid) more than doubled. Yet despite the signifi- cant use of Medicaid in a few states, there are powerful limitations on what it now can and cannot do for the population without private insurance. To see why, it is necessary to review briefly the way Medicaid coverage policy is determined and its limitations with respect to eligibility and services. Coverage Policy Determination Under Medicaid Medicaid is a cooperative federal/state program regulated by federal law but administered by state officials; under it the states have a great deal of autonomy, including the simple option not to participate. The federal government pays half or more of the costs of Medicaid program claims in a state on a matching formula basis, with the match coming from state appropriations. The match varies from 1:1 to 3:1 (federal:state funds), depending on a mathematical formula that is set for each state based on its poverty and income characteristics. The federal government sets certain minimum requirements (in terms of whom a state must consider eligible and what services and procedures its program must cover) for classification as a "participating state," that is, to receive federal matching dollars. Beyond these minima, states have substantial options to cover more people or services on their own, and the federal government will continue to match these expenditures on the same basis as the required coverage. Federal regulations permit reimbursement of most services delivered in the major drug treatment modalities, but they do not require states to cover most of them. As a result, there is no consistency across states in who gets covered for drug treatment or in what kinds of drug treatment services are reimbursed. In 1987 the NDATUS found that third-party public payments to re- porting providers were $139 million, or nearly 11 percent of total reported revenues (Table 7C-1~. Third-party public reimbursements included Med- icaid, Medicare, and some payments by insurance programs for military families using nonmilitary treatment services. It is probable that most of the reported revenues were Medicaid dollars, among other reasons be- cause the majority of these reimbursements were in just three states that make significant use of Medicaid for drug treatment: New York Califor- nia, and Pennsylvania, which accounted for nearly $90 million out of the $139 million in revenues. (These states have quite different approaches, however, and the large dollar flow in California is attributable to that state's large size rather than to an unusual level of commitment to this

268 TREATING DRUG PROBLEMS financing mechanism.) Without more detailed information, which no one has yet assembled, it is impossible to know to what extent different factors account for the very large differences in state coverage, factors such as eligibility requirements, the nature of services covered, the reimbursement rates established by the different states, underlying needs for treatment, and adequacy of alternative financing mechanisms. Eligibility The Medicaid system was the primary health insurance protection during some part of 1986 for 20.6 million citizens under the age of 65 (Chollet, 1988; U.S. Department of Commerce, 1988~; in comparison, 32.4 million persons in this age group were estimated to be living in poverty (U.S. Department of Commerce, 1988~. The reason for this evident gap is that, although federal requirements hold that certain disadvantaged persons and family configurations are categorically qualified for Medicaid coverage, the states still have enormous discretion in setting the income-based standards for eligibility within these categories. All state plans must cover individuals who qualify for Supplemental Security Income, which includes blind, permanently and totally disabled, and aged (over 65) individuals with low annual incomes and total assets. These standards qualified 6.3 million persons in 1986, of whom 3.1 million each were aged and disabled, for reimbursement by Medicaid of services not covered by Medicare. Probably the major significance of this population's eligibility is that Medicare will not pay for nursing home care but Medicaid will, and nursing home claims now account for more than two-thirds of all Medicaid payments, limiting the capacity of this system to deal with other kinds of health problems. Most Medicaid beneficiaries (15.5 million) are eligible for Medicaid assistance owing to their receipt of Aid to Families with Dependent Chil- dren (AFDC), which is another federaVstate cooperative program. AFDC eligibility is based on a categorical qualification plus an income standard established by the individual states. It always covers single-parent families, pregnant women, and young children in two-parent families provided their household of residence has an income below a financial "standard of need" that is usually configured in terms of a percentage of the federal poverty line. States may at their option cover as "medically needy" categorically eligible persons in households with incomes somewhat above the AFDC standard (that is, individuals who cannot receive AFDC). But most states have used their great latitude in establishing the standard of need to set the income level of AFDC eligibility, and thus Medicaid eligibility, at a per- centage somewhat if not substantially (e.g., 35 percent) below the poverty line.

PUBLIC COVERAGE 269 TABLE 7C-1 Third-Party Public Revenues by State in 1987 as a Percentage of Public State Total Revenues and of National Third-Party Public Payments State Revenues Third-Party Public Payments - Third-Party Total Percentage of Percentage of State ($000s) ($000s) State Total All National Alabama 644 6,987 9.2 0.5 Alaska 16 3,366 0.5 0.0 Arizona 948 24,328 3.9 0.7 Arkansas 354 2,641 13.4 0.3 California 17,779 256,530 6.9 12.8 Colorado 3,753 18,458 20.3 2.7 Connecticut 1,797 20,832 8.6 1.3 Delaware 5 1,352 0.4 0.0 District of Columbia 17 7,306 0.2 0.0 Florida 2,446 61,729 4.0 1.8 Georgia 478 24,288 2.0 0.3 Hawaii 22 4,730 0.5 0.0 Idaho 5 1,429 0.3 0.0 Illinois 1,227 40,484 3.0 0.9 Indiana 1,092 17,391 6.3 0.8 Iowa 1,118 11,553 9.7 0.8 Kansas 498 6,443 7.7 0.4 Kentucky 1,161 7,745 15.0 0.8 Louisiana 1,880 13,967 13.5 1.4 Maine 245 3,459 7.1 0.2 Maryland 3,031 27,837 10.9 2.2 Massachusetts 642 20,300 3.2 0.5 Michigan 1,613 36,408 4.4 1.2 Minnesota 2,337 25,772 9.1 1.7 Mississippi 115 1,769 6.5 0.1 Missouri 500 15,103 3.3 0.4 Montana 9 1,786 0.5 0.0 Nebraska 146 4,725 3.1 0.1 Nevada 21 2,971 0.7 0.0 New Hampshire 196 5,637 3.5 0.1 New Jersey 788 32,797 2.4 0.6 New Mexico 610 6,363 9.6 0.4 New York 58,773 250,382 23.5 42.2 North Carolina 1,337 18,848 7.1 1.0 North Dakota 725 6,486 11.2 0.5 Ohio 6,209 59,123 10.5 4.5 Oklahoma 527 8,227 6.4 0.4 Oregon 223 10,918 2.0 0.2 Pennsylvania 14,190 69,845 20.3 10.2 Puerto Rico 0 10,127 0.0 0.0 Rhode Island 28 5,115 0.5 0.0 South Carolina 431 7,263 5.9 0.3 South Dakota 0 778 0.0 0.0 Tennessee 1,016 9,279 10.9 0.7 Texas 4,856 64,341 7.5 3.5 Continues on new page

270 TABLE 7C- 1 (Continuedf TREATING DRUG PROBLEMS State Revenues Third-Party Public Payments Third-Party Total Percentage of Percentage of State ($000s) ($000s) State Total All National Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 220 73 1,531 1,275 249 2,023 48 6,828 917 28,653 11,474 2,941 18,200 1,762 Total United States 139,227 1,308,013 3.2 8 0 5.3 11.1 8.5 11.1 2.7 0.2 0.1 1.1 0.9 0.2 1.5 0.0 10.6a 100.0 aThis figure is an average rather than a sum. Source: Institute of Medicine analysis of the 1987 National Drug and Alcoholism Treatment Utilization Survey. The federal statutes for Medicaid allow states the option of covering certain additional individuals who do not fit the mandatory categories: older children, two-parent intact families, single adults, and childless cou- ples. Very few states have taken up these options, which would bring Medicaid much closer to being a form of universal coverage for low- income people. As a result, probably the largest segment of drug-abusing and dependent individuals—young, single, adult males are categorically ineligible for Medicaid. Aside from eligibility as such, actual registration for Medicaid can be a problem. In New York, where Medicaid standards are relatively inclusive, drug treatment programs routinely check whether new clients are certified or prima facie eligible for public assistance, which virtually ensures Medicaid eligibility. Uncertified but eligible clients may complete application forms (kept handy by admission units) at the time of initial program contact and submit them by mail. In contrast, application for Medicaid coverage in most states must be made in person at a central office. Coverage Provisions The federal guidelines for minimum benefits do not specifically deal with drug treatment. Federally required Medicaid services primarily include inpatient and outpatient hospital services and physician services. Although these services are sometimes necessary to treat some kinds of drug prob- lems and to deal with such sequelae or complications as trauma, AIDS, and other infectious diseases, the primary components of drug abuse treat- ment are psychosocial services (counseling, social work, psychotherapy),

PUBLIC COVERAGE 271 pharmacotherapy (medications such as methadone, buprenorphine, or de- sipramine), and residency in a therapeutic milieu. Coverage for counseling services, prescribed medications, and residential treatment outside of hos- pital wards is not required but is left to the discretion of the states, along with the rates at which these elements are reimbursable. There is no systematic study available of state Medicaid coverage for specific drug treatment services. A number of states do reimburse selected types and amounts of relevant services, most commonly (based on the committee's site visit information) physician examinations at admission (but generally at a rate equal to a conventional outpatient office visit rather than a multiphasic examination appropriate for an individual potentially severely compromised by drug abuse or dependence), methadone prescription (but generally at a rate that does not cover the cost of meeting federal regulations to run a lawful maintenance clinicy, and services of psychiatrists or licensed clinical psychologists (but not other counseling professionals). Emergency hospitalization for drug overdoses is generally covered, but treatment in residential programs is rarely reimbursed. These selective reimbursements have been sufficient to allow a few states with relatively wide eligibility and generous benefits, such as New York, Pennsylvania, and Colorado, to draw on Medicaid as the source of more than 20 percent of all provider revenues. (In New York, moreover, public assistance-eligible clients in residential programs may also receive reimbursement under the Home Relief and Food Stamps programs, which helps to defray residential program expenses.) In many other states, how- ever, drug treatment providers receive almost no Medicaid support. The Current and Future Status of Medicaid Coverage In theory, the Medicaid system could cover many drug-abusing and dependent individuals because the clients served by the public tier are mostly indigent and that population is the group Medicaid was designed to serve. Yet the future role of Medicaid is undefined. In a few states, it is an important underpinning of the treatment system; in others, its effect is negligible. In the committee's judgment, if Medicaid is to assume a con- sistent role across the board in financing the public tier of drug treatment, federal legislation governing Medicaid must be materially altered so as to address drug treatment needs. Such legislation should delineate eligibility criteria, the kinds of services and providers eligible for reimbursement, and minimum reimbursement levels. Inhere are interesting precedents for Medicaid financing of drug treat- ment. The AIDS crisis is leading to new federal and state initiatives that extend Medicaid coverage to populations not previously included. In Cal- ifornia, individuals diagnosed with AIDS or AIDS-related complex are

272 TREATING DRUG PROBLEMS categorically eligible for Medicaid coverage, whether or not they are eligi- ble under other categories. If they quality in terms of the income criterion, these individuals may receive Medicaid reimbursement for covered hospital and physician services. In a related precedent, many states are using their Medicaid systems to disburse $30 million in federal formula grant funds for purchase of the prescribed AIDS medication ANT. These one-time emergency grants had no federal attachment to Medicaid, but many states have found it efficient and convenient to use their existing Medicaid billing, administrative, and disbursement systems to spend and document these funds, even though the medication is purchased largely by individuals who are not otherwise categorically eligible or are not recipients of Medicaid coverage. This experience demonstrates that existing Medicaid reimbursement mechanisms can be adapted to manage other reimbursements that are parallel to but not part of Medicaid under present state criteria. Finally, and most pertinently, recent legislation (P.L. 100 360) requires states to provide Medicaid coverage to pregnant women and their infants who meet or exceed the federal poverty level by up to 35 percent. This provision is limited to health services related to pregnancy and to conditions that threaten the well-being of the infant. Maternal drug abuse certainly threatens the health of the infant, but whether this provision leads to the induction of such women into appropriate forms of care remains to be seen. The committee's recommendations regarding expanded outreach to this population could be partially and increasingly over time supported through Medicaid reimbursement for those eligible.

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The large federal role in the drug treatment system was substantially reduced in the early 1980s, undercutting its ability to help communities respond to new challenges such as the crack-cocaine epidemic and the growing violence in drug markets.

How can drug treatment dollars be spent most equitably with the highest likelihood of beneficial results? With this basic question as its focus, Treating Drug Problems, Volume 1 provides specific recommendations on how to organize and fund the drug treatment system. Detailed attention is given to both public and private sources and their programs.

The book presents the latest data and analysis on these topics and more:

  • How specific approaches to drug treatment fit into drug policy, including the different perspectives of the medical and criminal-justice communities.
  • What is known about drug consumption behavior and what treatment approaches have proven most cost-beneficial.
  • What areas need further research—including specifications for increased study of treatment effectiveness and drug use by adolescents and young women.
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