Unit cost of counseling and patients length of stay in a residential drug treatment setting.

BACKGROUND Many published reports on cost of counseling give a fixed cost per hour of service. These estimates may be flawed. AIMS OF THE STUDY The purpose of this study is to show, by way of an example, how cost of an hour of counseling depends on the nature of the patient, in general, and length of the patient s stay, in particular. Even though the health care professional provides the same hour of work, the cost of the hour is different for short-stay and long-stay patients. METHODS We identified 5-short and 5 long stay patients in a residential treatment program. For each group, we asked the counselors to review the medical records and measure the patients utilization of various service units. We estimated the cost of a unit of service by dividing cost of an average patient by the program utilization of short and long-stay patients. RESULTS The cost of an hour of counseling for long stay patients was 2/3 less than the cost of short-stay patients. Similar large changes in unit cost of treatment were observed for cost of group counseling or other components of substance abuse treatment. DISCUSSION Our data was limited to one case study and may not indicate similar patterns in other treatment programs. The paper suggests that methods of studying cost of treatment should be adjusted to reflect case mix of patients and their expected length of stay. IMPLICATIONS FOR HEALTH POLICIES Our analysis shows that higher rates should be set for patients at risk for short stays; conversely lower rates should be set for patients likely to complete treatment. Without adjusting the rate for the case mix of patients, health care institutions have an incentive to avoid the difficult cases and concentrate on long stay cases. IMPLICATIONS FOR FURTHER RESEARCH A number of instruments that measure severity of illness or difficulty of treatment can be used to anticipate patients length of stay. Then the rate for units of treatment can be set based on patients expected length of stay. This paper presents a questionnaire that can be used to collect cost data and estimate cost per unit of treatment adjusted for expected length of stay.