Payment systems and payment incentives in outpatient substance abuse treatment

Though substance abuse treatment expenditures totaled more then 1.8 billion dollars in 1989, little is known about the financing and economic incentives of the treatment system. This paper examines the relationship between payment methods for substance abuse treatment and the length of client time in treatment. Data on payment methods, treatment sessions, and other treatment unit and staff characteristics were gathered in a phone survey from a nationally representative sample of 575 outpatient treatment units. The survey response rate was 85.6%. Results from multiple regression analyses generally support the view that different payment methods provide varying incentives for units to retain clients in treatment. Units with a higher percentage of revenue based on payments for number of clients and number of treatment visits are likely to provide more individual and group therapy sessions per client than units with higher percentages of revenue based on other payment methods.