Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Though data from broad household-based surveys indicate that illicit drug use in the U.S. has been steadily declining over the past two decades, more objective indicators of drug consumption show a reverse trend. The concern is that even if casual drug use is falling, drug abuse among heavy, hardcore users, imposing the heaviest costs on society, may be trending upwards. The cost effectiveness of treatment versus relying on the criminal justice system to reduce drug use has been supported by many studies. However, data from the Treatment Episodes Data Set (TEDS) indicate that per capita admissions into substance abuse treatment have been flat from 1992 through 2004 despite the increase among heavy users. An objective indicator, less likely to be plagued by reporting errors, substance abuse treatment admissions proxy the prevalence of drug use within a given city. As treatment may be less costly relative to increased enforcement spending, the outcomes are policy-relevant. This study investigates the effect of socio-economic and policy factors on the probability of seeking treatment for hard drug abuse using Poisson regression models. Data from TEDS are aggregated to the city level, yielding multiple city cross-sections spanning 13 years. Panel data econometric methodologies control for biases stemming from policy endogeneity and unobserved geographic confounders. The effect of drug prices which are impacted by interdiction and enforcement spending is also investigated. The estimates inform on the efficacy of further enforcement-driven price increases on the motivation to seek treatment by raising the cost of sustaining the drug habit. Models also investigate the effect of mental health parity laws, enacted by several states, on raising substance abuse treatment admissions by lowering the cost of treatment through cost-sharing. Identifying at-risk populations less likely to seek treatment and the potential economic factors affecting this decision can aid in designing effective incentives and policies to lead individuals into treatment.