Substance Abuse Economics

We provide economic analyses of the benefits and costs of treatment programs and health interventions targeting substance abuse problems such as smoking, alcohol, and illicit drug use. These analyses include cost-of-illness, cost-effectiveness, cost-utility, and benefit-cost analyses to help policy makers evaluate policy alternatives for behavioral health interventions. We also provide econometric expertise to examine important policy and research questions pertaining to the relationship between substance abuse and economic disincentives as well as the relationship between substance abuse and health care expenditures.

Substance Abuse Services Cost Analysis Program (SASCAP)

Our economists have developed the Substance Abuse Services Cost Analysis Program (SASCAP) to reliably estimate costs of substance abuse treatment services without excessive burden on treatment programs. The SASCAP method is desirable because it collects information on the resources needed by treatment programs to provide specific services and how these resource needs may differ across treatment services.

The SASCAP method offers a new, less burdensome way to identify the costs of specific treatment services than previous drug abuse treatment services cost methods. Policy makers and treatment providers should find the SASCAP method to be a useful tool in estimating treatment services costs and in helping to identify the mix of treatment services that produces the most cost-effective outcomes.

SASCAP Components

The SASCAP method includes two components:

  • SASCAP Cost: a cost survey that collects data on program costs and revenue
  • SASCAP Labor: a labor allocation survey that collects data on staff time allocated across various treatment services

By using the data collected in both components, the costs of discrete treatment services can be estimated (as can be average costs per person). This new approach to treatment services cost estimation yields service cost estimates that include not only the cost of direct labor but also the cost of indirect labor and nonlabor resources. The indirect labor costs explicitly include the program’s costs of administrative services provided by a parent organization (e.g., human resources, legal fees, billing, marketing).

More Information


Gary A. Zarkin
Vice President, Behavioral Health and Criminal Justice
Laura J. Dunlap
Director, Behavioral Health Economics Program