Thomas L. Wilkinson.

Program administrators, funding sources and the general public want to know: How effective is the program at helping graduates to re-assimilate into society and remain drug and arrest free, and at what cost was this obtained?

In designing an outcome analysis, the type and amount of cost data to be collected, the method(s) to be used to collect the data, and the frequency of collection should be determined.. Some basic cost categories are:

• Personnel (social worker supervisors, regional clinical supervisors, managers clinical social workers, counselors and administrative personnel, etc.)

• Volunteer personnel

• Both direct and indirect space used

• Furniture and equipment and supplies (including any donated materials)

• Transportation

• Communication services (telephone, email, security, etc.)

• Vendor services (drug tests, accounting, security, etc.)

• Insurance (such as professional liability) and finance

• The development of a cost spread sheet will allow for the routine collection of this data.

• Other factors that might be considered are:

• Ensuring that volunteer personnel and donated equipment or supplies are priced at the cost associated with having to purchase these services.

• Stating indirect costs as a percentage of direct costs. Examples of indirect costs are overhead, advertising costs, and shared costs with the facility, such as utilities. Indirect costs can be allocated as a percentage cost per client.

• Determining the amount of program space used and its cost. Remember to include the cost of furniture and accessories as well as the portion of utilities associated with the space.

• Calculating the usage cost by multiplying the amount of time the space is used by the cost of the space.

• Including the percentage of program time utilized by inmates who were discharged from the program, when determining the number of clients served. It is tempting to exclude from evaluations of treatment outcomes data, inmates who were put out of the program before completion.

• Breaking down total costs into cost per client This can be done by dividing the total cost of the program by the number of clients served. This is usually done at a point in time, that is the total cost and client count on a given day

Cost analysis provides a basis for developing the cost-effectiveness (relationship between program cost and program effectiveness) and cost-benefit analysis (measurement of both costs and outcomes in monetary terms) of the program.

• Drug-free days

• Employed days

• Number of recidivists within first year, two years, etc.

• Number of arrests within first year, two years, etc.

Outcomes after treatment can be: compared with before treatment experiences, or with a control group who has not received the treatment. However it is important to note that:

• before and after comparisons of outcome may exaggerate the impact of treatment, since treatment often is started because a client’s behavior became progressively more severe, which is what got him /her into jail/prison in the first place; and

• in comparing to a control group, one must be sure that the control group norm is similar to the treatment group norm. For instance, criminal behavior tends to reduce with age, so ages should be similar.

Graphs conveniently show the relationship between costs and outcomes. Microsoft Excel, Quattro Pro or Lotus 123 are all excellent for this purpose. As an example, the cost of treatment can be compared to drug-free days upon release.

Methods for analyzing outcomes are the following:

• The cost-outcome ratio for clients is obtained by dividing the average total cost per client by one outcome measure or by a composite of all the outcome measures made.

• A second method would be to divide the total cost of treatment by one outcome measure or by a composite of all the outcome measures made.

• New income generated. This is a weak measure because often employment for ex-offenders who are also substance abusers is very difficult.

• Cost savings to society or taxpayers.. These cost savings include: funds otherwise spent in the illicit economy of drugs; criminal justice services not required; and social and health services no longer needed.

Measures of these are the following:

• Decreases in clients involved in driving while intoxicated or driving under the influence.

• Decreases in client’s families who sought counseling.

• Reduced crime and use of the judicial and criminology systems.

• Decrease in involvement in accidents.

• Increased participation in aftercare programs.

• Reduction in the use of social services.

The reduction in criminal activity following substance abuse treatment may not produce a corresponding reduction in actual costs to society. Although costs to citizens drop in direct proportion to reductions in criminal acts perpetrated on those citizens, public expenses for criminal justice services may not decline in a similar manner. Typically, police courts and other components of the criminal justice services are on a fixed budget, while the need for criminal justice services greatly surpasses the ability to deliver those services. For this reason, the impact of substance abuse treatment on criminal justice resources saved because of a reduction in crimes committed by former substance abusers may be diverted to other criminal justice services. The entire budget for criminal services probably will still be spent.

Similar problems may occur when cost savings benefits are measured for reduced health, mental health, and future drug treatment services. Because resources in these services typically are very limited, the actual reduction in expenditures may not be as much as might be expected from the reduction in patient use of services.

Nevertheless, transforming effectiveness findings into estimated cost savings still may have considerable value for a program evaluator. In particular, cost savings estimates can show the magnitude of criminal justice and treatment resources that are now available to help other drug abusers who previously could not be helped because of budget restrictions.

The following tables show ways to calculate types of costs and potential cost savings for benefit analysis, along with potential benefits that can be obtained.