Willingness to pay for drug rehabilitation: Implications for cost recovery

D. Bishai, J. Sindelar, E. P. Ricketts, S. Huettner, L. Cornelius, J. J. Lloyd, J. R. Havens, C. A. Latkin, S. A. Strathdee

Research output: Contribution to journalArticlepeer-review

18 Scopus citations


Objectives: This study estimates the value that clients place on methadone maintenance and how this value varies with the effectiveness of treatment and availability of case management. We provide the first estimate of the price elasticity of the demand for drug treatment. Methods: We interviewed 241 heroin users who had been referred to, but had not yet entered, methadone maintenance treatment in Baltimore, Maryland. We asked each subject to state a preference among three hypothetical treatment programs that varied across three domains: weekly fee paid by the client out-of-pocket ($5-$100), presence/absence of case management, and time spent heroin-free (3-24 months). Each subject was asked to complete 18 orthogonal comparisons. Subsequently each subject was asked if they likely would enroll in their preferred choice among the set of three. We computed the expected willingness to pay (WTP) as the probability of enrollment times the fee considered in each choice considered from a multivariate logistic model that controlled for product attributes. We also estimated the price elasticity of demand. Results: The median expected fee subjects were willing to pay for a program that offered 3 months of heroin-free time was $7.30 per week, rising to $17.11 per week for programs that offered 24 months of heroin-free time. The availability of case management increased median WTP by $5.64 per week. The price elasticity was -0.39 (S.E. 0.042). Conclusions: Clients will pay more for higher rates of treatment success and for the presence of case management. Clients are willing to pay for drug treatment but the median willingness to pay falls short of the estimated program costs of $82 per week. Thus a combined approach of user fees and subsidization may be the optimal financing strategy for the drug treatment system.

Original languageEnglish
Pages (from-to)959-972
Number of pages14
JournalJournal of Health Economics
Issue number4
StatePublished - Jul 2008

Bibliographical note

Funding Information:
Funding for this research was provided by grant number R01-DA09225 funded by the National Institute on Drug Abuse. In addition, the authors would like to thank study participants and staff of the Baltimore Needle Exchange Project. The authors gratefully acknowledge research support for JS from the National Institute on Drug Abuse to Yale (Grant No. R01-DA14471).


  • Addiction
  • Drug treatment
  • Heroin
  • Methadone
  • Willingness to pay

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health


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