To determine whether drug abuse treatment services are cost-effective, policy makers need accurate estimates of the cost of treatment services. The objective of our analysis was to develop a new method for estimating the costs of specific drug treatment services and to apply that method to 170 methadone treatment clinics that participated in the Center for Substance Abuse Treatment's Evaluation of the Methadone/LAAM Treatment Program Accreditation Project.
Our method extends previous research by including both indirect labor and nonlabor resources in service cost estimates. We found that service cost estimates that included indirect labor and nonlabor resources were two to three times higher than those that only included direct labor costs. Service costs ranged from $8 per patient per week for ongoing medical services to $106 for a session of initial patient assessment and treatment planning. Over all services, indirect labor and nonlabor costs combined accounted for between 41 and 69% of the estimated total service costs. We conclude that studies that only include direct labor costs are seriously underestimating the true costs of providing treatment services. Our services cost estimation method is applicable not only to the cost estimation of other drug treatment modalities but also to the cost estimation of other health care services. (C) 2004 Elsevier Ltd. All rights reserved.