$908K vs. $261K - You Do The Math On TCOC For Treating Addiction, Mental Health

In our study comparing the cost of care for young adults with mental health and addiction challenges, those who did not do residential treatment or traditional inpatient detox not only fared better than those who did, they got to recovery and stay in it, and at one-third of the total estimated cost of care. Our study began in 2022 and ended in 2024.

Cohort #1: 29 young adults followed over a 3 year period. This group paid about $750 a month for sober living for a year, or $9,000 per person, and joined a free local community club to help them with mental health and addiction to drugs and alcohol (the club’s primarily offered a mix of wellness sessions and physical activity as non-profit peer support groups). 7 relapsed at least once in this time, and 11 overall had either a relapse or a period of time where they were out of work and report being very depressed. Despite this, just 3 overall ended up in a hospital for 5 days, and overall 18 of the 29 or 62% never relapsed and as of the reporting of this story remain drug and alcohol free and describe their mental health as “up and down but manageable”. Total cost of care for mental health and addiction treatment and recovery for the entire cohort (factoring in the sober living + hospitalizations, but not doctor’s visits or medications) is estimated at $291,000 in total over the 3 years.

By contrast, cohort #2 featured 31 young adults followed over a 3 year period paying about $28,000 over a two month period for inpatient detox, residential treatment and outpatient visits for co-occurring addiction and mental health conditions. 17 of the 31 or 54% did not relapse during the 3 year period and report to be in average to good mental health as of today. 14 of the 31 relapsed at least one time, 4 of whom ended up in the hospital as a result for a 5-day average stay, leaving total cost of care for the entire cohort’s treatment and recovery over the 3 years at an estimated $908,000.

Limitations:

There were some limitations in this study as the 60 participants and their families “self reported” the information. There are some gaps we believe in the total number of hospitalizations reported from cohort 2 which may mean a slightly higher cost. The length of time cohort 1 spent in sober living was at most 1 year but in a few cases 6-9 months, which represents a likely lower overall cost. The study did not collect cost for prescriptions or visits to medical professionals, which may have skewed the results.

Employer Considerations

For employers, these findings matter since many workers are dealing with substance use disorder. “What employers do can save lives,” says Tracy McPherson, senior research scientist in the Public Health department at NORC at the University of Chicago. Many employees are not in treatment, but an increasing number of them are. The question now is does the treatment work. More often than not treatment doesn’t work and workers go in and out of a cycle of treatment and recovery. Employers need to support treatment and reduce stigma around those getting it, but they also need to embrace and encourage the “right treatment” and recovery models that prevent the cycle. NORC’s McPherson says workers actively in recovery help employers avoid about $8,2000 in turnover, replacement and healthcare costs.

For information or questions, contact me at thebehavioralhealthhour@gmail.com