Crystal ball gazing: Future spending for substance abuse treatment

Spending on substance abuse (SA) treatment is expected to increase from $20.5 billion in 2003 to $35.4 billion in 2014—averaging increases of 5% per year. Despite this growth, spending on SA treatment is anticipated to continue a long-term decline as a share of all health spending—from 2.1% in 1986 to just 1% by 2014, even though the effects of untreated SA on medical conditions are well known. Funding from private health insurance is down—forecasted at less in 2014 than in 1986; only 7% of spending is expected from private insurance, down from 30% in 1986. Almost two-thirds (64%) of SA treatment funding is projected come from State and local governments and Medicaid in 2014, up from 39% in 1986. In addition, about half (47%) of SA treatment spending is expected to be in specialty mental health and SA treatment centers in 2014. This presentation will discuss expected trends on spending for SA treatment suggested by these projections and explore the potential effects of laws and economic conditions that have emerged since the projections were created. Could increased dependence of financing on public sources alter the types of clients treated, change reimbursement, and impact provider sustainability? What are the possible ramifications of the current recession on SA treatment funding and how could the recently passed SA parity legislation affect private insurance coverage? What effect could the spread of “medical homes” have on the initiation and monitoring of substance use disorders?