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Med Care Res Rev. 2012 Oct;69(5):540-59. doi: 10.1177/1077558712447075. Epub 2012 May 22.

Evaluation of an innovative Medicaid health policy initiative to expand substance abuse treatment in Washington State.

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1
Division of Health Services Management and Policy, College of Public Health, The Ohio State University, Columbus, OH 43210, USA. twickizer@cph.osu.edu

Abstract

State health policy making is rarely based on evidence derived from empirical analysis. An exception is an innovative policy established in 2005 in Washington State (Senate Bill [SB] 5763) to provide funding (approximately $30 million) to expand access to substance abuse (SA) treatment for Medicaid beneficiaries. The authors analyzed Medicaid claims data and other administrative data over a 7-year period, July 2001 through June 2008, for three cohorts of welfare clients (n ≈ 44,000) to assess the effect of SA treatment on health care expenditures. Regression analysis showed SA treatment to be associated (p < .001) with per member per month expenditure savings of approximately $160 to $385 depending on the welfare cohort. The aggregate annualized estimated saving ($16.8 million) equaled the cost-saving goal of SB 5763. While it may be tempting for policy makers to cut funding for SA treatment, this may be counterproductive and in the long-run increase Medicaid costs.

PMID:
22618867
DOI:
10.1177/1077558712447075
[Indexed for MEDLINE]
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