The sensitivity of substance abuse treatment intensity to co-payment levels

Anthony T. Lo Sasso, John S. Lyons

Research output: Contribution to journalArticlepeer-review

11 Scopus citations


This study exploits variation in co-payment levels among different contractual arrangements within a regional managed behavioral health care organization to estimate the relationship between co-payment levels for substance use treatment services and the intensity of substance use treatment. The substance use treatment benefits involved a range of co-payment levels across nearly 400 employers during the years 1993 through 1998. Multiple regression techniques were used to estimate the effect of co-payment levels on treatment intensity. The results indicate that co-payment levels had a significant negative effect on outpatient and inpatient substance use treatment. For outpatient treatment the effect on intensity implied a co-payment elasticity of -O.18, implying that moving from a $10 co-payment to a $20 co-payment would result in, for example, a reduction from 5 to 4 outpatient visits per episode. However, the effect was larger for persons with combined alcohol and drug use disorders, as they exhibited a co-payment elasticity of -0.27. For inpatient days, the co-payment elasticity was considerably smaller at -0.017. Given the benefits of maintaining persons with substance use disorders in treatment, employers may have an incentive to take steps to minimize the barriers to treatment.

Original languageEnglish
Pages (from-to)50-65
Number of pages16
JournalJournal of Behavioral Health Services and Research
Issue number1
StatePublished - Jan 2004

Bibliographical note

Funding Information:
This research was financed by grant number 037157 from the Robert Wood Johnson Foundation's Substance Abuse Policy Research Program. The authors gratefully acknowledge helpful comments from Roland Sturm, Jenny Williams, Richard Lindrooth, and seminar participants at the Western Economic Association meeting s and the annual meeting of the Association for Health Services Research.

ASJC Scopus subject areas

  • Health(social science)
  • Health Policy
  • Public Health, Environmental and Occupational Health


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