Spending on substance abuse treatment providers, 1986 to 2005

Overall, SA treatment is small —just $23.7 billion in 2005, up from $9.3 billion in 1986. It is also small as a share of total health spending ─ about 1.3% in 2005—and has grown more slowly than all health spending over the past two decades. Moreover, the share of spending for SA outpatient treatment has risen while the share of spending on inpatient treatment has declined. Hospital care, once the gold standard for SA treatment, has fallen substantially, as inpatient hospital treatment shifted to predominantly detoxification and rehabilitation services were relegated to outpatient settings.

The vast majority of substance abuse expenditures—81% in 2005—went to specialty providers, with the most significant share (41%) for treatment in specialty substance abuse centers. Specialty hospitals comprised 5% of expenditures in 2005, and specialty units in general hospitals were another 12%. Other SA professionals (psychologists and social workers) accounted for 13% of 2005 SA spending, and psychiatrists and multi-service mental health organizations captured a combined 10% of SA treatment spending in 2005.

For non-specialty providers, the largest share of spending was in non-specialty units of general hospitals (6%). Few SA treatment dollars (1%) are spent on retail prescription drugs, a far smaller share than the 30% of mental health expenditures on retail prescription medication.

These trends suggest important issues, including how to ensure reliable follow-on care after inpatient detoxification in hospitals and the quality of SA treatment received in non-specialty general hospital units.