Study: Treatment Saves
Medicaid Funds

---

Medicaid patients who received addiction treatment experienced a 30 percent decrease in their overall medical costs under the program, according to a new study from researchers at Kaiser Permanente.
Dr. Lawrence Walter and colleagues in Kaiser’s Division of Research compared a group of 197 Medicaid patients with a group of non-Medicaid patients. Each group was tracked for one year before and three years after receiving addiction treatment at Kaiser’s Vallejo Chemical Dependency Recovery Program in Oakland, Calif. They found that patients who received treatment through a managed behavioral health program saw their Medicaid costs fall from an average of $5,402 per year to an average of $3,627 per year. The researchers also calculated that Medicaid patients with substance use disorders had medical costs that were 60 percent higher than non- Medicaid patients prior to entering treatment.

“Previous studies have shown similar reductions in health care costs as a result of providing substance abuse treatment, but this study also showed that the reductions in medical costs are across all areas, including hospital stays, visits to the emergency room, and medical clinics,” said Dr. Walter, adding that “The reductions in cost are not because of a shift in costs from one area to another.”

The study, which was funded by the Robert Wood
Johnson Foundation, is reported in the July 2005 issue of the Journal of Behavioral Health Services and Research.