The value of providing health interventions for heroin use: a cost benefit analysis

Date Commenced:
January 2013
Expected Date of Completion:
Project Supporters:

NHMRC Project Grant

Drug Type:
image - 1353904918 Cost Benefit Scale Square
Project Members
image - Michael Farrell 0
Professor Michael Farrell
image - Marian Shanahan
Conjoint Senior Lecturer
Ph 02 9385 0333
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Casual Academic
Ph 02 9385 0188
image - Jennifer Seddon Square
Dr Jennifer Seddon
Research Officer
Project Main Description

Heroin use and associated harms can be reduced through effective treatment. Past research has shown that treatment for heroin dependence can be relatively cost-effective, but not whether heroin treatment overall is a good investment. This study will estimate the net social benefit of heroin treatment, taking into account health, crime but importantly also social and family consequences.


Heroin use creates a significant burden. Treatment for heroin focuses on reducing both heroin use and the associated harms. Previous research on heroin treatment, such as pharmacotherapy maintenance, has demonstrated cost-effectiveness for specific interventions. But a comprehensive cost benefit analysis across all heroin treatments has never been undertaken. There are benefits over and above health and crime, such as social and family consequences, and despite acknowledgement that these are important outcomes they have not been included in previous economic evaluations. The benefits of heroin treatment accrue over a lifetime, requiring a long-term perspective for valuing costs and consequences. Thus, there are three aspects to this study:

  1. using a cost-benefit analysis (CBA) framework that provides a summative analysis across treatment types;
  2. valuing social and family consequences along with health and crime outcomes; and
  3. taking a lifetime perspective.

The research questions are:

  1. Does the current set of health interventions for responding to heroin use result in positive Net Social Benefit (NSB)?
  2. Under what assumptions does the total NSB change to greater or less than zero (i.e. indicate that this is an efficient/inefficient use of resources)?
Design and Method

The scope of the study will be New South Wales. The choice of a single jurisdiction over a national analysis is due to the diversity of jurisdictional differences in drug use, types of interventions provided, and how they are funded (personal versus government). As we are interested in the relationship between inputs, outcomes and consequences, the decision was made to construct the model with data for one jurisdiction.

Methods will include:

  1. Document and value the health interventions for heroin use/dependence: A list of interventions will be developed in conjunction with an Expert Group established for this project.
  2. Quantify and value the outcomes/benefits of heroin use: a combination of data sources will be used. For example, overdose (both fatal and non-fatal) will be quantified through administrative data from coronial systems, NSW Registry of Births Deaths and Marriages, hospital data, and the literature. The resource implications will be determined using data such as hospital cost data, Diagnoses Related Groups (DRG) case weights/costs, emergency department data and their cost weights, and ambulance data. The value of life lost will be estimated based on previously estimated values of a statistical life.
  3. Match outcomes/benefits and consequences to interventions: This involves establishing causal relationships between consequences and interventions over time and accommodating interactions. We will map this in a lifetime model.
  4. Exploring the efficiency of the health interventions: We will calculate the NSB by summing all the benefits and costs – as derived from the lifetime model described above.
Project Supporters

NHMRC Project Grant

Project Collaborators: External

Professor Pascal Perez
University of Wollongong

Dr Nagesh Shukla
University of Wollongong

Vu Lam Cao
University of Wollongong

Project Research Area
Drug Type
Project Status
Date Commenced
January 2013

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