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Department of Economics, Wayne State University, Detroit, MI 48202.
Alcoholism treatment (AL) changes usage and/or spending on non-alcoholism treatment (NA). Yet there has been little economic analysis of the effect of AL on individuals' uses of health services and total health care costs. Our model yields both cost and usage impacts. A 1% increase in short-term AL events implies a 1.9% increase in costs; subsequent AL increases costs by .6%. A 1% increase in short-term NA events implies a 1.3% increase in costs; subsequent NA increases costs by 1.5%. Initiation of AL directly lowers NA, but indirectly increases NA usage (and hence, costs) in subsequent treatment. Overall, a 10% increase in AL leads to a 9.2% increase in health care costs.
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