Cost Savings in Medicaid Medical Expenses: An Outcome of Publicly Funded Chemical Dependency Treatment in Washington State

This research involved a five year follow-up study of 557 clients receiving chemical dependency treatment under the Alcohol and Drug Addiction Treatment and Support Act (ADATSA). The question of whether chemical dependency treatment reduces Medicaid expenses is examined by comparing Medicaid medical costs for those who received chemical dependency treatment in 1989-90 (n=344) with a similar group who were eligible but did not receive treatment in the same time period (n=213). Treated clients were found to be less costly, on average $4,500 less for medical care alone than untreated clients. Treatment had the largest effect, and produced the largest savings, for those who had Medicaid medical expenses prior to treatment cost, on average $7,900 less than a similar group of untreated clients over the five year follow-up period.