The opioid epidemic claimed more than 100,000 American lives in 2021, said Richard Frank, the Margaret T. Morris professor of health economics emeritus at Harvard Medical School and Senior Fellow at the Brookings Institution. Only about 20 percent of the people who need care receive it, and of those only about one-third receive evidence-based treatment. Expanding the use of opioid agonist treatment is a priority as a response to the epidemic, said Frank. Achieving this will require analysis and revision of policies and regulations as well as economic evaluation of potential policy changes.
To facilitate workshop discussions on how best to identify policy measures that would most effectively expand the use of methadone, Frank proposed a seven-step policy analysis framework, focusing this framework on regulations that affect the supply of methadone and accompanying policies that might be changed to improve health and well-being by reducing harms associated with opioid use disorder (OUD).
Step 1. Define the policy problem. As the first step in his policy analysis, Frank defined the problem as policies that have resulted in unacceptably low treatment rates, unmet needs, and access challenges for certain population segments, such as racial and ethnic minorities, LGBTQIA+ persons, and rural populations. Contributors to these treatment access problems are the settings where policies will apply, including prisons and jails, local
health and human services infrastructures, communities, and different types of housing and living arrangements. Characterizing these different components with data is necessary to understand the heterogeneity of the populations for which policy alternatives will be designed, he said.
Step 2. Set out the policy alternative. Some of the alternatives proposed by individuals throughout the workshop include expanding organizational settings where methadone can be prescribed and dispensed, changing supervision administration rules, and altering insurance coverage and payment policies, said Frank. He noted that specific policy alternatives vary by setting and population segment. For example, the interaction of Medicaid and prison policy is a classic case of how a large national payment policy structure interacts with a particular context and specific setting, he said.
Frank suggested that the policy alternatives most likely to succeed are bundles of complementary policies designed specifically to address desired outcomes, but with appropriate attention to potential unintended consequences, implementation uncertainty, and potential community resistance. “Too often we try to effect change by changing one important policy element, and then are frequently disappointed when the desired outcomes are not realized.… Creating policies that can be dialed up or down is critically important,” he said, so that policy makers can make corrections if needed. With regard to methadone treatment, such flexible policies could also enable providers to tailor delivery of take-homes, for example, in order to mitigate harms or anticipated harms, he said.
Step 3. Assemble the relevant evidence. The third step, said Frank, is to assemble evidence that will inform tradeoffs among alternatives. This may involve conducting experiments or studying natural experiments to see, for example, how allowing pharmacists to dispense methadone works, or analyzing how changes in Medicaid coverage or payment policies might affect methadone use and health impacts. During this evidence-collecting period, Frank said it is also important to consider how likely it is that a policy will be implemented as designed or how it might veer away from the original design; how different stakeholders are likely to respond to various policy alternatives; and what the potential is for unintended consequences. He added that outcome projections should include reporting on the sensitivity of outcomes to modest changes in assumptions or altered circumstances.
Step 4. Set out value judgments that underpin the choice of best alternatives. The fourth step in Frank’s policy framework requires making value judgments about how to weigh outcomes when tradeoffs need to be made.
Step 5. Project the policy impacts of different alternatives.
Step 6. Consider the tradeoffs. Frank said this is the most difficult. It requires putting together all the evidence about how the various alternatives will work with respect to impacts, implementation, feasibility, political acceptability, and community support. For example, if a policy is designed
to expand access and continuation in treatment, one must consider the likelihood that those benefits will be realized, the risks of negative outcomes in certain communities and the tolerance of those communities for the risk, and the costs of one alternative compared to others.
Step 7. Build a narrative. Frank said the last and most important feature of this policy analysis is building a narrative and communicating with a wide range of stakeholders about what has been learned through the process. He noted that conducting this policy analysis will not be easy, in light of the limited evidence available on different approaches to methadone in the United States. “We have very few data points on [which] to build an evidentiary basis for playing with different types of policy designs in building up the alternatives and bringing evidence to them,” said Frank, noting however that pandemic regulatory relief offers some opportunities to begin building a U.S.-specific evidentiary foundation. For example, evidence now exists regarding the consequences of expanding Medicaid generally and specifically for addiction treatment, yet there is far less data concerning other regulatory provisions, such as changing Medicaid rules for incarcerated populations, he said.
Creating policies that make meaningful change in the capacity to address medications for OUD requires policy makers to understand all the different levers that need to be pulled rather than looking at each policy in isolation, said Frank. This includes economic levers, he said, “and there are probably five or six hidden levers inside that.” For example, building capacity to treat people with methadone may require going beyond asking the federal government to invest in solutions. Rather, he said, a combination of federal and market investments may be needed. Venture capital is one potential resource, but raises concerns about whether those resources will be deployed in a way that maximizes social benefits in an equitable way. “You need to anticipate those unwanted responses and create regulations, accountability, and metrics so that you can monitor and manage those issues,” said Frank.
Economic evaluation of addiction treatment is a relatively recent practice, in part because some of the techniques used for evaluating traditional physical health care interventions do not translate well to addiction programs, which are concerned not just with the patient, but with society as well, said Michael French, professor and chair of the department of health management and policy at the Miami Herbert Business School, University
of Miami. He added that economic evaluation provides just one data point that, along with clinical and programmatic evaluations, goes into a policy maker’s decision-making process.
Like Frank, French presented a framework for conducting an economic evaluation rather than results from specific studies. A cost analysis is nearly always the first step, he said, adding that economists think about costs not just in terms of dollars, but also in terms of the value of various resources. Hidden costs, such as patient travel time and the costs associated with program volunteers and overhead resources, are also important to include, said French. These hidden costs can make even “free” treatment too costly for patients. To aid in the collection of information on resources used in delivery of treatment for substance use disorder, French and colleagues developed an instrument called DATCAP—the Drug Abuse Treatment Cost Analysis Program.1
Another type of evaluation that helps determine if investing in a certain resource or treatment will lead to cost savings down the road is called cost-offset analysis, said French. This type of analysis is particularly useful for harm reduction programs, he said. For example, investing in needle exchange programs can help avoid future costs in terms of hepatitis C infection, HIV, and overdoses.
A challenge in this regard is that the agencies that deal with health and those that deal with crime are not connected and may have very different priorities, said French. For example, when he and his colleagues conduct treatment evaluations in criminal justice settings, they provide a full and comprehensive examination of outcomes, including societal outcomes. However, the interest of the correctional facility may be limited to the cost of delivering treatment in prison and, perhaps, recidivism. That is a very narrow perspective, which ignores potential benefits beyond just not committing crimes, said French. His solution is to present a narrow perspective to the agency sponsoring the research, and then augmenting that with a societal analysis for people and agencies interested in ancillary outcomes.
Cost-effectiveness analysis is used to assess the incremental cost of an intervention compared to something else, which could be an alternative intervention, usual treatment, or even doing nothing, said French. He added that if doing nothing leads to an outcome, however modest, that also needs to be subtracted from the outcome of the interventions. Some of the possible outcomes that could be assessed for the two alternatives include number of drug-using days, success in obtaining employment, and arrests, among others, said French. A challenge with conducting a cost-effectiveness analysis in this area is the lack of consistent benchmarks for acceptable
costs for achieving a certain outcome. For example, said French, “If I said to you that an intervention achieved a drug-free week at a cost of $50, most people would say that seems pretty reasonable. But if was $500 or $5,000, now a debate starts.”
Another limitation of cost-effectiveness analysis is that it can only examine one outcome at a time, which does not fit well with addiction interventions because the outcomes are multidimensional, spanning both individual and societal issues, he said. Economists call these externalities, said French. For example, substance use can lead an individual to commit crimes to pay for the drugs, or it can cause family discord, job loss, or educational disruption, all of which can be considered costs.
A third challenge with regard to cost-effectiveness analysis, said French, is that while economists have various ways of incorporating uncertainty into their analyses to come up with estimates that are somewhat imprecise with big confidence intervals, decision makers want very specific point estimates.
French said the most common economic analysis approach used in the medical literature is cost-utility analysis, which is an extension of-cost effectiveness analysis, but with an outcome that takes into account improvements in both the quality and duration of life, such as quality-adjusted life years. Like cost-effectiveness analysis, cost-utility analysis does not adequately capture the benefits of addiction treatment beyond patient well-being and duration of life.
A final economic analysis approach is called benefit–cost analysis, which incorporates all the outcomes that are applicable to an addiction intervention, said French. It is much more comprehensive, complicated, and costly, but provides policy makers with information that is easily understood and makes dollar-to-dollar comparisons, he said. For example, if a program has a benefit–cost ratio of four to one, it is returning $4 for every $1 invested, said French. The results of this analysis can also be reported as net benefits, namely, the total benefit minus the total cost.
The advantage of economic analysis, according to French, is rather than saying a treatment works—which could mean that it works sometimes, but not always—this analysis quantifies the benefit of a treatment in comparison to other alternatives. He listed several recommendations for researchers considering an economic evaluation:
- Develop a concise research question or hypothesis.
- Recruit a team of researchers that can initiate the economic analysis at the beginning of your project.
- Define every alternative program or intervention.
- Clearly define the perspective of the analysis (e.g., patient, society, taxpayers, treatment facility, insurance company, criminal justice agency, etc.).
- Include all externalities, pain and suffering, shared resources, and hidden costs.
- Assess the generalizability of the study findings.
- Base your decisions on marginal (i.e., the cost to produce one additional service or product) rather than average costs and benefits.
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