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J Drug Issues. 2005 Jul 1;35(3):507-528.

Managed Care's Dual Impact on Outpatient Substance Abuse Treatment: Methadone Maintenance vs. Drug Free.

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professor of health economics at Yale's School of Public Health and has an appointment at Yale's Institution of Social and Policy Studies. She is also a research associate at the National Bureau of Economics Research and was previously associate dean of Yale's School of Public Health.


The number and type of services offered at substance abuse treatment (SAT) facilities are important aspects of the quality of care. Managed care (MC) is a growing presence in SAT and has been shown to affect the provision of treatment. We expand on earlier work and examine the impact of managed care on the number and type of services offered by methadone maintenance (MM) and drug-free (DF) outpatient treatment facilities. We use the econometric technique of instrumental variables to address the issue of endogeneity of MC and service offerings, thereby allowing a causal interpretation of results. Using data from the 2000 National Survey of Substance Abuse Treatment Services, we find that MC significantly increases the total number of services offered in MM outpatient facilities by four, yet decreases the number by two in DF outpatient facilities. We also show how the impact on specific services differs by modality and provide explanations for our findings.

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