Empirical evidence has demonstrated that psychological interventions can effectively treat a wide range of child and adult health problems. The focus of this review is on costing issues associated with psychological interventions, including cost-effectiveness and cost offset (i.e., a reduction in health care costs attributable to effective intervention). Recent evidence has demonstrated that psychological interventions can be more cost-effective than optimal drug treatment. For example, although having comparable effectiveness, cognitive-behavioural treatments for panic disorder and for depression have been estimated to cost approximately one-third less than pharmacological treatment. Furthermore, a recent meta-analysis of 91 research studies published between 1967 and 1997 found that average health care cost savings due to psychological intervention were in the range of 20-30% across studies, and 90% of the studies reported evidence of a medical cost offset. In conclusion, the evidence indicates that psychological treatments (i) can be cost-effective forms of treatment and (ii) have the potential to reduce health care costs, as successfully treated patients typically reduce their utilization of other health care services.
Based on decades of research on the effects of psychological interventions, there is clear and compelling evidence that there are psychological interventions that are effective in treating a wide range of child and adult health problems, including depression, generalized anxiety disorder, panic disorder, post-traumatic stress disorder, eating disorders, substance abuse, and chronic pain (Chambless & Ollendick, 2001; Nathan & Gorman, 1998; Roth & Fonagy, 1996; U. K. Department of Health, 2001). As research continues to progress, there is mounting evidence that there are also effective psychological treatments for diseases and disorders that are routinely seen in primary care medical practices but that are typically difficult to medically manage, including Type I diabetes (Hampson et al., 2000), chronic tension-type headaches (Holroyd et al., 2001), rheumatoid arthritis (Sharpe et al., 2001), chronic low-back pain (van Tinder et al., 2000), chronic fatigue syndrome (Whiting et al., 2001), and a range of medically unexplained physical symptoms (Nezu, Nezu, & Lombardo, 2001).
Evidence for the positive impact of psychological treatment is obviously important, but in the current context of accountability and cost containment, it is, on its own, insufficient (Mash & Hunsley, 1993). Psychologists involved in professional and public policy activities are well-aware of the critical need for data that address the costs associated with psychological services and the benefits - both in terms of health and economic factors - that are likely to result from these services (Dobson, 2002). Indeed, both national and provincial psychological associations have recently made submissions to government departments and commissions emphasizing the savings to the health care system that could result from greater accessibility to appropriate psychological services (e.g., Canadian Psychological Association, 2001; l'Ordre des Psychologues du Quebec, 2000; Manitoba Psychological Society, 2001; Saskatchewan Psychological Association, 2001).
The primary goal of this article is to better acquaint psychologists with the costing concepts that can be, and have been, applied to the realm of psychological interventions and with the results of this line of research. I begin by reviewing the current fiscal situation in Canada as it relates to health care costs in general and psychological services more specifically. Next, an introduction to costing concepts is provided and analytic strategies for evaluating health care costs are presented. The next two sections deal specifically with evidence regarding cost savings that are likely to result from psychological treatment. Evidence for the costeffectiveness of psychological intervention versus pharmacologic intervention is presented for the treatment of two common psychological disorders: panic disorder and depression. Following this, evidence that effective psychological intervention frequently results in costs savings for the health care system (i.e., medical cost offset) is summarized. Finally, the implications of these findings for the provision of psychological services in Canada are discussed and suggestions are made for further investigation of the economic impact of psychological services within the Canadian context.
HEALTH CARE COSTS IN CANADA
Before turning to the evidence on the cost-effectiveness and cost-offset of psychological services, it is necessary, as a backdrop, to be cognizant of health care expenditures in Canada (for a general overview of recent trends in the Canadian health care system, see Iglehart, 2000). The Canadian Institute for Health Information estimate for the year 2001 was that health care spending exceeded $102 billion, with approximately 73% attributable to public sector funding (Canadian Institute for Health Information, 2001b, 2001c). Additionally, for the past several years, of all provincial program expenditures, approximately onethird was targeted for health care spending. In Canada, the nature of federal, provincial, and territorial government data on health services is such that it is difficult to determine actual expenditures on psychological interventions. For example, although 20% of all expenditures on mental health services in Ontario are for psychotherapy, the extent to which this includes the whole range of behavioural health care interventions (i.e., psychological treatment for all diseases and disorders, not just services for conditions typically seen as mental health problems) cannot be determined (Sadavoy & Perry, 1999). Furthermore, as it has been estimated that the majority of consultations with psychologists occur outside of publicly funded institutions (Stephens & Joubert, 2001), even data on publicly funded health services would dramatically underestimate the true costs of psychological services in Canada
It is informative to contrast this state of affairs with recent conservative estimates of the costs of illness and health problems to the Canadian economy. A 1993 estimate indicated that the total annual cost to Canadian society of illnesses was almost $130 billion an amount equivalent to almost 15% of Canadian Gross Domestic Product, (Moore, Mao, Zhang, & Clarke, 1997). The health burden (including both direct costs of health care services and indirect costs due to lost productivity and death) of mental disorders and nervous system diseases - conditions for which psychologists routinely provide services accounted for 13.4% of these costs. In comparison, the most "costly" conditions were cardiovascular diseases and musculoskeletal diseases, which accounted for 15.2% and 13.8%, respectively. Of course, as most psychologists are aware, there are psychological services, both preventative and therapeutic, that are known to be effective in treating such diseases (e.g., Linden & Chambers, 1994; Linden, Stossel, & Maurice, 1996).
A more recent and comprehensive estimate suggested that in 1998 the costs (direct and indirect) associated with depression and general psychological distress, alone, ran to over $14 billion (Stephens & Joubert, 2001).With respect to the financial burden of depression, these Canadian data are consistent with American data that suggest that the annual per capita health and disability costs of depression are greater than those associated with hypertension and comparable to those associated with heart disease, diabetes, and back problems (Druss, Rosenheck, & Sledge, 2000). In addition, recent American estimates of the societal costs for anxiety disorders - conditions not directly assessed in the data used by Stephens and Joubert (2001) - are that in 1990, the annual cost of anxiety disorders was US$42.3 billion (Greenberg et al., 1999). Based on the data estimates developed by Stephens and Joubert (2001), of the estimated $6 billion cost for treatment of depression and general psychological distress in Canada, less than $150 million was spent on services provided directly by psychologists. In light of (i) the consistent finding that appropriate psychological intervention for depression (especially cognitive-behavioural approaches) has comparable or superior effects to antidepressant medication (DeRubeis, Gelfand, Tang, & Simons, 1999) and (ii) indications of greater cost-effectiveness of such treatments relative to antidepressant medication (Antonucci, Thomas, & Danton 1997), such estimates can only be interpreted as a severe and costly underutilization of psychological services for the treatment of depression within the Canadian health care system.
Professional psychologists are no strangers to the issue of treatment costs, at least when considered in the usual practice context of third-party payments and operating costs. In contrast, though, few psychologists are well-versed in the broader costing concepts stemming from a health economics approach to health care service provision. As a result, relevant studies of the costs of psychological services are relatively scarce. Fortunately, this is beginning to change as researchers turn their attention to the economic factors relevant to the utilization of psychological services. The following overview of costing concepts is drawn from material presented by Hargreaves, Shumway, and Hu (1999) and Knapp and Healey (1999). For an in-depth treatment of these issues as they relate to psychological services, the interested reader is also directed to Hargreaves, Shumway, Hu, and Cuffel (1998), Miller and Magruder (1999), Spiegel (1999), and Yates (1996).
There are multiple analytic approaches for obtaining economic evaluations of health care services, each with its own range of convenience. The most commonly used are cost-benefit analysis, cost-effectiveness analysis, and cost-utility analysis. Although all provide economic estimates that can be used by policy-makers and administrators to guide their resource allocation decisions, they differ in significant ways. Cost-benefit analysis addresses the extent to which a specific treatment yields a socially desirable outcome. All costs and benefits are expressed in monetary terms and can, therefore, be directly compared. If the benefits of a treatment exceed its costs, this would indicate that there is merit (in fiscal terms) in implementing the treatment. In contrast, cost-effectiveness analysis focuses on the ratio of monetary costs to measures of treatment outcome (such as a reduction in symptoms or an increase in work productivity). Cost-effectiveness analysis is particularly suitable for comparing treatment options. Specifically, it can be used to determine (i) if two treatment options have equal costs, which has the greatest benefits or (ii) if two treatment options have equal benefits, which costs less.
Cost-utility analysis is similar to cost-effectiveness analysis except that the impact of the treatment is measured and converted to a standard valuing metric such as well years of life. Typically, this metric is standardized in terms of quality-adjusted life years (QALY). Operationally, this is defined as the number of years of life in which the individual would be expected to be completely free of symptoms or disability as a result of the intervention (i.e., the extent of improvement due to the intervention). This metric can also be used to quantify the deleterious effects of illness or disability. QALY scores are typically developed by first obtaining a rating from experts and/or patients of a state of functioning due to illness or disability on a 0 to 1.0 scale. This rating is then multiplied by the portion of a year that a patient either (i) remains in that state (for calculations of the effects of illness/disability) or (ii) is able to be symptom-free compared to normative estimates for the illness/disability (for calculations of the effects of intervention). For example, the costeffectiveness of installing driver-side airbags on automobiles was found to be US$24,000 per QALY (Graham, Thompson, Goldie, Segui-Gomez, & Weinstein, 1997) and the cost-effectiveness of deploying automated external defibrillators on commercial aircraft ranged from US$35,300 to US$94,700 per QALY (Groeneveld et al., 2001). Turning to an example focused on a psychological intervention, Toeus, Kaplan, and Atkins (1984) examined the impact of a cognitive-behavioural program designed to provide psychoeducational information and assist in lifestyle changes for patients diagnosed with chronic obstructive pulmonary disease. They found that the treated group, compared to the untreated control group, had better overall health even 18 months after the intervention. They calculated that the treatment cost required to produce a "well year" was under US$25,000.
For all economic evaluation approaches there is a common framework regarding how to estimate the societal cost of an illness or condition. It is critical, if the evaluation is to be complete, that all costs stemming from the illness or condition are accurately and fully estimated. In general terms, this requires consideration of both direct and indirect costs, or, in other words, the value of resources used and the value of resources lost. Direct costs may involve components such as treatment costs for the identified condition, costs stemming from the utilization of other health care system services, and other service costs (e.g., use of nontraditional health care services, involvement with the criminal justice system). In some cases, direct cost estimates may also include elements such as transportation costs to receive treatment, lost work productivity costs due to receiving treatment, time costs associated with waiting for treatment, administrative (transfer) costs associated with the treatment, and capital costs associated with the value of the property in which treatment is provided. Indirect costs, in contrast, typically involve costs due to lost productivity, absenteeism, underemployment, or unemployment that results from the condition itself and from possible early disability and death due to the condition. As would be imagined, indirect costs are notoriously difficult to fully estimate.
There is an important costing phenomenon that is distinct from those just described. As a result of an intervention or an improvement in the effectiveness of an intervention, usual costs to the health care system may be reduced or averted. Although perhaps better conceptualized as health care service offsets, such costs are typically described as medical cost offsets. The most likely example of a cost offset is when a condition that has been overlooked, misdiagnosed, or ineffectively treated is accurately recognized and treated. Although there are clearly direct costs associated with the treatment, there may be cost savings that result from a decrease in utilization of other health care services (e.g., discontinuation of unnecessary therapy or medication, reduced number of visits to a general medical practitioner or to emergency rooms). Furthermore, if the costs savings resulting from appropriate treatment are equal to or greater than the costs of the treatment itself, such a result is called a total offset.
As will be described in detail in a subsequent section, there is considerable research that indicates psychological interventions are often associated with medical cost offsets and, in many cases, even total cost offsets. Kashner and Rush (1999), among others, have posited that these cost offsets are likely due to multiple factors. For example, changes related to psychological intervention may make the patient more responsive to other health care treatment or may encourage the patient to be more willing to adhere to medical advice and treatment regimens (including medication prescriptions and diet and lifestyle recommendations). Additionally, psychological interventions may help the patient achieve better overall psychological and physical health, which would lead to a reduced need for health care services. Finally, it is very likely in many cases that there is a substitution effect at work, in which, as a result of receiving treatment from a specialist, visits to a general medical practitioner who was previously providing guidance or counselling are curtailed. It should not be simply assumed that the provision of psychological services will necessarily result in overall cost savings. Indeed, Kashner and Rush (1999) cautioned that health care costs may increase in some situations due to psychological intervention. This may result from the discovery of other illnesses or conditions that require care, greater valuing of attending to health care needs, and even increased longevity, which may result in increased health care costs for patients with chronic conditions. Cost-Effectiveness of Psychological Interventions
Although research on the cost-effectiveness and cost-- benefits of psychological intervention is relatively recent, there is growing evidence that supports the cost-effectiveness of interventions such as, for example, multisystemic therapy for distressed youth (Shoenwald, Ward, Henggeler, & Rowland, 2000), dialectical behavior therapy for borderline personality disorder (Linehan & Heard, 1999), and marital therapy as an adjunct to the outpatient treatment of alcoholism (O'Farrell et al., 1996). There are also indications that, compared to medical interventions for the same disease/disorder, psychological interventions may have comparable or superior cost-effectiveness (Miller & Magruder, 1999). Of course, in interpreting such findings it is important to remember that, per capita, there are far fewer psychologists available to provide psychological interventions than there are medical practitioners available to provide pharmacological interventions. Although there are three times as many psychologists providing health care services as there are psychiatrists in Canada (Canadian Psychological Association, 1999), for every 100,000 Canadians there are 185 physicians and only 40 psychologists (for comparison purposes, there are 54 dentists, 49 physiotherapists, and 16 chiropractors per 100,000 Canadians; Canadian Institute for Health Information, 2001a). The relative availability of service providers does not, however, provide an accurate indication of the public's access to appropriate and high-quality health care. As a case in point, Young, Klap, Sherbourne, and Wells (2001) found that patients with anxiety disorders and/or depression were four times more likely to receive appropriate treatment from mental health specialists than they were from primary care physicians (see also Wells, Sturm, Sherbourne & Meredith, 1996).
To illustrate the nature and results of recent costeffectiveness analyses, one example dealing with the treatment of anxiety disorders and one dealing with the treatment of depression will be presented. Costeffectiveness analyses of these disorders are especially important given that the health care costs associated with depression and anxiety disorders are substantial, due to the high medical service utilization rates of people with these disorders. Indeed, American estimates are that 15% of patients seen in primary health care settings suffer from these disorders and that average health care costs for such patients over a six month period are US$2,390, compared to US$1,397 for patients without such disorders (Simon, Ormel, Van Korff, & Barlow, 1995; see also Candilis & Pollack, 1997, and Greenberg et al., 1999). Although this difference is sizeable, less than 10% of the total costs were actually due to the costs of mental health treatments. Other American estimates suggest that the indirect societal costs of depression (including lost productivity and absenteeism) are at least three times as great as the direct treatment costs associated with the condition (Zhang, Rost, & Fortney, 1999) and are as great or greater than the indirect societal costs associated with common chronic medical conditions (Druss et al., 2000).
Gould, Otto, and Pollack (1995) examined the costs for the treatment of panic disorder over a twoyear period, comparing cognitive behavioural treatment (CBT) to commonly prescribed medications (both antidepressants and high potency benzodiazepines). As a first step in cost-effectiveness analyses, there must be evidence regarding the relative effectiveness of the treatment options being considered. Thus, Gould et al. conducted a meta-analysis to compare the overall effect size of pharmacotherapy versus CBT. They used data from 43 studies published between 1974 and 1994 that used randomized controlled trials. In general, they found that the effect sizes for CBT and pharmacologic interventions were very similar, with effect sizes of treatment effects on panic frequency of 0.53 for drug treatments and 0.55 for CBT. Additionally, they found no significant difference when the effects of antidepressants and benzodiazepines were compared and no evidence that combining CBT with medication resulted in superior treatment outcomes compared to either intervention on its own.
Next, Gould et al. estimated the costs for a typical course of either CBT or medication. For CBT services, costs were estimated as US$90 per session for individual sessions, US$40 per session for group sessions, and US$60 per session for individual follow-up/booster sessions. In comparison, rates for pharmacologic treatment were estimated as US$60 for a session of pharmacological management, US$.0.60 for 1 mg of generic alprazolam, US$0.09 for 50 mg of generic imipramine, and US$1.93 for 20 mg of branded fluoxetine (Prozac). Both psychological and drug treatments were assumed to commence with a single evaluation session of equal costs. CBT costs were computed based on 15 sessions, with I additional session during the first year of treatment and 4 additional sessions during the second year. Pharmacologic treatments costs were computed based on 2 sessions for the first month, monthly sessions for the next three months, 3 additional sessions during the first year, and 4 additional sessions during the second year. Medication dosages were selected to reflect typical dosages in clinical trials. No estimates were made for transportation costs, costs associated with lost productivity due to attending treatment sessions, or administrative costs.
Based on these treatment component estimates, Gould et al. calculated that a course of individual CBT treatment cost US$1,650 over two years; the comparable total treatment cost for group treatment was US$840. In contrast, treatment with alprazolam ranged from US$1,800 to US$3,312, depending on dosage, treatment with imipramine cost US$912, and treatment with branded fluoxetine cost US$3,504. This information, when combined with the aforementioned effectiveness results, indicates that CBT interventions are comparable in effectiveness to commonly used medications but are much less expensive than most available pharmacologic options. Although this cost-effectiveness analysis is informative, it is important to note that it is incomplete, as only direct costs of providing treatments were included in the cost analysis.
A more complete cost-effectiveness analysis was conducted by Antonuccio, Thomas, and Danton (1997) in their study of treatments for depression. As they noted, several meta-analytic studies published in both psychiatry and psychology journals have found that (i) psychological intervention (especially CBT) can produce comparable or superior outcomes to medication in the treatment of depression, (ii) combined psychological and medication intervention is not superior to either treatment option on its own, and (iii) pharmacotherapy has substantial larger drop out rates than does psychological intervention. Based on these meta-analytic evaluations, it is evident that CBT is at least as effective as commonly prescribed antidepressant medication in the treatment of depression.
Antonuccio et al. developed a comprehensive costeffectiveness model that included direct treatment costs to the patient or the third-party provider (health care provider costs, medication costs, lost wages, travel costs, and comorbidity costs), direct costs to the community (economic multiplier effect from lost wages, reduced taxes due to lost wages, and reduced community service work by patients), and indirect costs to society (lost productivity during treatment, economic multiplier effect from lost productivity, reduced taxes due to lost productivity, and lost income potential from suicide). In their model, costs were estimated for treatment over a two-year period, and estimates for relapse rates, drop-out treatment costs, and subsequent treatment costs were also calculated. Although they pointed out the importance of factoring in costs associated with treatment side effects, the researchers were unable to obtain sufficient data to allow for quantification and inclusion in their cost-effectiveness model. All estimates used data stemming from peerreviewed journal publications and from state economic information (from the researchers' home state of Nevada). Given the complexity and the scope of their model, specific cost estimates for each cost item will not be presented here. Instead, the focus is on the general findings when their model was applied to the treatment options for depression.
Rather than presenting a range of treatment options as Gould et al. (1995) did, Antonuccio and colleagues compared individual CBT for depression (estimating 20 sessions over a two-year period) with fluoxetine (involving 40 mg of medication per day and management appointments with psychiatrists every six weeks). Factoring in all the cost elements described previously, these researchers estimated that the total treatment costs for individual CBT were US$23,696 over a two-year period (US$7,268 direct treatment costs to the patient/provider, US$1,253 direct costs to the community, and US$15,174 indirect costs to society). In comparison, pharmacologic treatment cost a total of US$30,733 over two years, or 30% more than individual CBT. The components of this total included US$12,738 direct treatment costs to the patient/provider (i.e., 75% more than the same category of costs for individual CBT), US$946 direct costs to the community, and us$17,049 indirect cost to society. Finally, the combined treatment option was slightly more expensive than the fluoxetine alone option (US$31,245). The reason for such a slight cost increase for the combined treatment was that the researchers assumed that the treating psychiatrist would be competent to provide both treatments and that both medication management and CBT interventions would be included in the same sessions. Of course, treatments provided by two independent practitioners (one for the medication and one for the psychological treatment) would increase the costs of the combined treatment substantially. In sum, then, individual CBT was the most cost-effective option available for the treatment of depression, and was, therefore, recommended by the researchers as the treatment of first choice for dealing with unipolar depression.
Medical Cost Offset
One of the first studies examining the link between the psychological intervention and subsequent health care utilization was conducted by Follette and Cummings (1967). The medical records of 152 randomly selected adults seeking psychological services through the Kaiser Foundation Health Plan in northern California were examined and data were collected on their utilization of health services one year prior to starting treatment and for the five years following the beginning of treatment. Of these patients, 80 were seen for one consultation session only, 41 were seen for between two and eight sessions, and 31 were seen for nine or more sessions (M = 34 sessions). A comparison group of adults were obtained by searching medical records for patients who had never received psychological services but who were matched to the treatment sample on age, sex, socioeconomic status, and medical utilization rates (for the year prior to the start of treatment for the treated patients). Follette and Cummings found that, for the comparison group who did not receive treatment, the utilization of health care services increased over the period encompassed by the study. In contrast, there were significant declines in the utilization rates of those who received treatment, with the most significant declines occurring in the second year following termination of treatment. Even the patients who received "long-term" treatment (i.e., nine or more sessions) experienced some declines in utilization. Although this group's use of outpatient services did not decline, their use of inpatient services did - at the start of the study period these patients had an annual average of 5 days of hospitalization, but by the end of the study period this had decreased to .7 days per year (the plan average was .8 days in hospital).
In the years following this research, numerous other investigators began to examine possible medical cost offsets due to the provision of psychological interventions. Medical cost offsets have been found for an incredibly broad range of health problems. The following paragraphs provide just a small sample of this literature.
In a three-year study of patients diagnosed with ischaemic heart disease, hypertension, diabetes, or airflow limitation disease, Schlesinger, Mumford, Glass, Patrick, and Sharfstein (1983) tracked the adjustment and health care utilization of 700 patients who received psychological interventions and 1,300 patients who did not receive such services. Compared to the untreated patients, those who received psychological treatment evidenced a 40% reduction in annual medical costs (US$950 and US$570, respectively). Once the cost of psychological intervention was taken into account, there was still a 5% net saving for the group who received treatment. Similar results were reported by Fahrion, Norris, Green, and Schnar (1987) in their study of hypertension. Using stress management interventions, the symptoms of over 50% of patients were well controlled without the need to resort to pharmacological treatment and the average total medical costs saved per patient over a fiveyear period was over US$1,300.
Rehabilitation programs for injuries and disabilities are increasingly provided as part of the health care system. Not surprisingly, therefore, there have been many evaluations conducted to examine the costs and benefits of these services. Although the figures vary depending on the nature of the problems treated and the type of intervention, there is consistent evidence of cost offset. For example, in a study of hospital costs five years prior to and following psychological treatment for stress-related disabilities, Gonick, Farrow, Meier, Ostmand, and Frolick (1981) found that every dollar spent on psychological treatment resulted in a saving of five dollars. Successful treatment of chronic pain conditions have also been found to result in substantial savings to the health care system. As an illustration of this type of finding, Jacobs (1987, 1988) reported that one year after successful treatment, patients' use of inpatient services had decreased by 7281% and their use of outpatient services had decreased by 41-50%.
Some cost-offset studies have been conducted in Canada. Based on a retrospective analysis of patients' medical records six months prior to receiving psychological treatment, during treatment, and six months following treatment, Golden (1997) investigated whether a course of psychological treatment reduced the use of medical services. Thirty-three adults at a family medical centre in London, Ontario, were provided treatment, with a median duration of treatment of 12.5 hours. Data from the file review indicated that the frequency of appointments with family physicians decreased both during and following treatment. Indeed, compared to the period prior to treatment, there was a 50% reduction in medical appointments following the brief intervention. Simpson, Carlson, and Trew (2001) recently reported on the effect on health care utilization of brief group intervention (six 90-minute sessions) for women with breast cancer. In this study at the Tom Baker Cancer Centre in Calgary, Alberta, 89 women who had completed medical treatment for stage 0, I, or II breast cancer were randomly assigned to receive either no further intervention (beyond the usual psychosocial care available to patients at the Centre) or the structured group therapy intervention. Psychological adjustment data and Alberta healthcare billing records were obtained for two years after the psychological intervention. Overall, the intervention was effective in improving the adjustment and quality of life of those in the treated group compared to the untreated group, and this effect was still evident two years post-intervention. Additionally, the average amounts billed to the provincial heap care system for the two years following intervention were 23% less for the intervention group compared to the control group, for an average savings of almost $150 per patient. The investigators estimated that the cost of the group intervention per patient was approximately $100, thus the intervention entirely paid for itself (and more) in terms of overall costs savings to the provincial system.
In the past three decades, there have been several reviews of the medical cost-offset phenomenon, all of which have concluded that offset occurs for most psychological interventions.
In the first review of this literature, Jones and Vischi (1979) reported that there were 30 studies that had found cost offsets due to the provision of psychological interventions to alcoholism, drug abuse, and various mental health problems. Groth-Marnat and Edkins (1996) found evidence for cost savings resulting from psychological services for preparing patients for surgery, enhancing adherence to medical regimens, smoking cessation, rehabilitation programs, chronic pain disorders, cardiovascular disorders, and general somatic complaints without organic causes. Limiting their review to research on the impact of providing psychological treatment for psychological disorders on the costs of medical care, Gabbard, Lazar, Hornberger, and Spiegel (1997) found that 80% of published studies using randomized controlled trials and 100% of published studies without random assignment reported total cost offsets due to the provision of psychological intervention.
In the most widely cited review of this literature, Mumford, Schlesinger, Glass, Patrick, and Cuerdon (1984) conducted two meta-analyses, one based on the claims files for the Blue Cross and Blue Shield U.S. Federal Employees Plan for the years 1974-1978 and one based on the results of 58 published controlled studies. Their general conclusion was that cost-- offset effects were typically found for psychological interventions (in approximately 85% of studies), but that the clearest effects occur in the reduction of inpatient service costs (e.g., surgery, hospitalization for chronic conditions such as cancer, cardiovascular diseases, or diabetes). Their data also indicated that cost offsets were greater for older patients (over 55 years of age) than they were for younger patients.
A more recent and more comprehensive metaanalysis of the cost-offset literature was conducted by Chiles, Lambert, and Hatch (1999). Their meta-analysis used data from 91 studies published between 1967 and 1997, and included patient groups such as those undergoing surgery, patients with a history of health care system overutilization, and patients receiving treatment specifically for psychological disorders (including substance abuse). Additionally, Chiles et al. examined whether the extent of offset was moderated by such factors as the type of psychological intervention and a focus on inpatient versus outpatient services. Overall, cost savings due to psychological intervention were in the range of 20-30% across studies, and 90% of studies reported evidence of cost offset. Among the studies that included a description of estimated cost savings, only 7% reported that the costs of psychological treatment exceeded the cost savings that resulted from the intervention.
Because of the possibility that published research is not representative of research conducted on a topic (i.e., that studies finding statistically significant results are more likely to be published than are studies with statistically nonsignificant findings), meta-analysts typically conduct an analysis of the robustness of their obtained results. Chiles et al., unfortunately, did not conduct such an analysis, and the level of detail they reported in their article does not allow for a precise estimate of the "file drawer effect" (i.e., the number of unpublished non significant results that would be required to reduce the results of the meta-analysis to an effect size of zero). However, it is possible to address this important issue with some approximalions, following equations given by Rosenthal (1984) for the calculation of the file drawer effect. Chiles et al. reported the weighted effect size (ES) for 40 treatment-comparison group studies to be .34. Substituting these data and a conservative estimate for the average sample size per study of 40 (i.e., 20 patients in both of the two conditions) into Rosenthal's equations 2.2 and 5.17, one obtains a value of 2,694. In other words, in order to reduce the effects found in the meta-analysis to ES = 0, there would need to be 2,694 studies averaging null effects in order to conclude that results obtained in the Chiles et al. meta-analysis were due to sampling bias. Assuming an average study sample size of 20, the number of file drawer studies falls to 1,327; assuming an average study sample size of 60 raises the number to 4,081. Rosenthal (1984) suggested that a tolerance level for the number of required nonsignificant studies can be calculated by multiplying the number of studies used in the meta-analysis by 5 and then adding 10. In the case of the Chiles et al. meta-analysis, this yields a tolerance level of 210 studies. In other words, based on the above approximate calculations for a subset of the studies used in the meta-analysis, it is exceedingly unlikely that the results obtained by Chiles et al. are affected by any publication bias and therefore they are likely to be good estimates for research conducted on medical offsets.
In examining moderating effects on offset due to study and sample characteristics, Chiles et al. observed several statistically significant patterns. First, greater effects were found in inpatient settings than in outpatient settings (ESs = .53 and .23, respectively). Accordingly, Chiles et al. suggested that patients undergoing inpatient medical procedures (such as surgery, oncology services, cardiac rehabilitation services) may account for a larger portion of the overall cost offset than do patients who are receiving outpatient services (such as general practitioner visits for accidents, illness, or infections). Second, greater effects were found for structured psychological interventions that were specific to the patient's condition or complaint than for traditional generic psychotherapy (ESs = .52 and .21, respectively). Third, the mean effect size for studies published during the past 15 years was smaller than was found for earlier studies (ESs = .49 and .23, respectively). Finally, there was some weak evidence that (i) patients older than 65 years had a larger medical cost offset due to psychological intervention than did younger adult patients and (ii) offset was evident for child patients as well as adult patients. In sum, although this recent and comprehensive quantitative review clearly demonstrates the robustness of the medical cost-offset phenomenon, it also demonstrates that there are specific patient and treatment characteristics that are most likely to be associated with cost savings to the health care system.
Future Directions for Cost Analysis Research
Although there are relatively few cost-effectiveness studies of psychological intervention currently available, there are recurrent calls for conducting costeffectiveness studies of psychological services (e.g., Hofmann & Barlow, 1999; Krupnick & Pincus, 1992; Yates, 1997). In order for costing elements to be appropriately included in treatment outcome research, it is essential that cost analysis factors are fully considered in the design of studies. For example, power and sample size calculations must take into account factors related to cost elements, not just clinical outcome variables (Briggs & Gray, 1998). If this is not done, studies may be underpowered in the ability to detect meaningful differences in treatment costs, as was the case in a recent British study examining treatment options for depression (Bower et al., 2000). Additionally, it is crucial that cost-effectiveness analyses include all costs associated with the condition, both direct and indirect. A restricted focus on treatment costs alone can result in misleading conclusions. For example, in comparing total costs associated with the treatment of depression by either mental health specialists or general medical practitioners, Zhang, Rost, and Fortney (1999) reported that specialist care was more costly. However, they found evidence for a cost offset in that the more expensive specialist care more than paid for itself in terms of reductions in lost earning to patients compared with the treatment provided by general practitioners. Finally, to remain current, cost-effectiveness studies will need to be regularly updated in order to take into account changes in the pharmacological and psychological treatment of disorders. Changes in prescription patterns, the relative utilization (and costs) of generic and patented medications, the availability of appropriate psychological services in publicly and privately funded systems, and alterations in professional fees all have the potential to significantly affect the costs and cost-effectiveness of psychological intervention.
With respect to cost-offset research, despite encouraging evidence for the economic benefits of psychological intervention, there are several important methodological problems typically found in this literature. The most important methodological limitation is that the overwhelming majority of studies have not used random assignment of patients to treatment. Instead, quasi-experimental designs have been used to match treated and untreated match patient groups or to allow for comparisons of health care utilization between time periods prior to and following the psychological intervention. Without randomization, it is not possible to completely rule out the possibility that apparent cost-offset effects are largely due to the selective utilization of psychological services by individuals who are highly motivated to improve their functioning (Miller, 1998). If this is the case, then the claims in the literature for the size or extent of cost offset are overly optimistic. Simply because a cost saving can be realized for a select group of patients does not mean that comparable savings would result if other, less motivated, patients were offered the psychological service.
Another issue that must be considered when attempting to evaluate cost-offset studies in order to specify the nature of the cost savings is that speciality services such as psychological interventions are likely to be more costly than routine care from general medical practitioners. Although some researchers have found that this extra cost is outweighed by the other savings associated with specialist care (e.g., Zhang et al., 1999), this is not always the case. In a study of the collaborative treatment of depression, Von Korff et al. (1998) found that having psychologists provide brief cognitive-behavioural intervention in addition to routine primary care by physicians resulted in a small increase in the cost-effectiveness of the collaborative treatment. However, overall treatment costs rose across patients and a cost offset was observed for other speciality mental health services but not for general medical services.
Despite decades of research, relatively little is currently known about which forms of psychological interventions for which patients are likely to be costeffective and/or to provide optimal cost-offsets. This is largely due to the nonprogrammatic and nonexperimental nature of most of the medical cost-offset literature. For this line of research to advance, much more attention will need to be given to basic design factors such as randomization and patient sampling, and research efforts that include costing components must be comprehensive, including both direct treatment costs and indirect costs. Without this comprehensive coverage, it is unlikely that the true economic impact of psychological intervention will be apparent. Furthermore, given the substantial differences among Canadian and American health care systems, an overreliance on American data can be problematic. In order to ensure the validity and relevance of findings to the Canadian context, much more information is needed about psychological treatment costs and opportunities associated with our own national health care system.
With the ongoing modifications to health care systems in all Western countries, it becomes increasingly difficult to generalize the results of prior studies to new systems of care. For example, as inpatient services are reduced and streamlined for many surgical procedures, the added value of presurgical preparation services on patient anxiety and postoperative pain are less likely to be apparent as reductions in total inpatient costs. As a result, it will be important for researchers to focus on the potential impact of both inpatient and outpatient/community-based psychological services on subsequent health care costs, including elements such as subsequent medication and rehospitalization costs.
Even if published estimates of medical cost offset are accurate and generalizable, the realities of the health care system may mitigate against service providers fully capitalizing on the benefits of psychological intervention. Rarely is it possible for a patient to receive truly integrated psychological and medical care, either at the primary care level or at the level of speciality care. Factors such as the availability of trained psychological service providers, organizational/institutional structures, and mutually exclusive funding corridors or budget categories may make it almost impossible for patients to routinely obtain the integrated care that appears to be optimal for both improving health and reducing overall costs. The fact that medical utilization rates decreased in, for example, the Canadian studies by Golden (1997) and Simpson et al. (2001) may be largely due to the integration of the psychological services into the overall structure of the medical centres. Without true integration of all health care services, both at the level of professional collaboration and budget management, it may not be possible for a health care system to fully benefit from the availability of psychological interventions (cf. Budman, 1999; Moran, 1999). Researchers need to address this possibility by examining costs and cost savings that may occur in various health care delivery formats.
Finally, caution must be exercised in attempts to extrapolate from the research data to psychological interventions in general. Simply because research demonstrates that some psychological interventions can yield cost savings it does not necessarily follow that all psychological interventions will yield savings. The type of intervention, the nature of the condition being treated, and the age of those receiving treatment all influence the extent of cost offsets. Although cost offset due to psychological intervention does seem to be a robust phenomenon, the possibility of cost savings to the health care system, like the value of psychological intervention itself, must not be oversold (cf. Jacobson, 1995).
As indicated at the beginning of this article, there is clear and compelling evidence that psychological interventions can effectively treat a wide range of child and adult health problems. It cannot be emphasized enough that this fact must not be lost in efforts to examine costs associated with these interventions. Indeed, it is likely that many effective psychological services do result in a net cost to the health care system. This is as it should be in any health care system that truly aims to improve the health of the population through effective treatments to reduce pain, distress, suffering, and disability. Thus, although cost elements are important in our current health care environment, they should not be the only elements that influence health care policy decisions. Psychological interventions work for an enormous range of health problems and, although attempts to promote greater access to these services must include arguments based on cost-effectiveness and cost offsets, they should not be (and have not been) totally reliant on economic arguments.
With this being said, it is evident that psychological treatments can be very cost-effective forms of treatment and may even be more cost-effective than commonly used pharmacological interventions. Beyond this, psychological interventions also appear to have the potential to reduce health care costs, as successfully treated patients frequently reduce their utilization of other health care services. In some instances, the reduced cost to the health care system may actually be greater than the cost of the psychological service, thus resulting in a total cost offset to the system.
Obviously it is the advantage of all Canadians, not just to the psychological service providers, that these evidence-based conclusions are considered and incorporated into our health care system (cf. Dobson, 2002). This is true both for the health of Canadians and for the financial stability of our health care system. With the growing societal costs of health care, any service that can provide improved health status and the possibility of substantial cost savings should be closely examined by health care policy analysts. All of this would appear to provide a very firm basis for expanding options for public funding of psychological services. Unfortunately, although the Canada Health Act permits the public funding of psychological services outside the context of publicly funded hospitals and institutions, no province or territory has seriously considered the possibility of developing funding mechanisms or formulae for psychological services delivered in other health service settings. The recent recommendation to examine the feasibility of provincial funding for psychological services from the New Brunswick Health Services Review Committee (2002) is encouraging, but continued lobbying efforts by provincial and national psychological associations are critical to bring to the attention of governments the likely benefits that could result from greater inclusion of psychological services in primary health care.
Preparation of this manuscript was supported by a contract from the Canadian Psychological Association. Correspondence concerning this manuscript should be addressed to John Hunsley, School of Psychology, University of Ottawa, Ottawa, Ontario, Canada KIN 6N5 (E-mail: firstname.lastname@example.org).
Des etudes empiriques ont demontre que les interventions psychologiques permettent de traiter efficacement une vaste gamme de problemes de same chez l'enfant et l'adulte. Le present compte rendu porte principalement sur les questions de coats associes aux interventions psychologiques, y compris l'efficacite en termes de coats et la compensation des coats (c.-a-d. une reduction des coats des soins de same attribuable a une intervention efficace). Des etudes recentes demontrent que les interventions psychologiques peuvent etre plus efficaces en termes de colts que le traitement pharmacologique optimal. Par exemple, meme s'ils ont une efficacite comparable, on estime que les traitements cognitivo-comportementaux du trouble panique et de la depression sont environ le tiers moins couteux que le traitement pharmacologique. Par surcroit, une meta-analyse recente dans 91 etudes publi&es entre 1967 et 1997 a revele que les economies moyennes de coats des soins de same realisees A cause des interventions psychologiques etaient de l'ordre de 20 A 30 pour cent pour toutes les etudes et que 90 pour cent des etudes etablissaient qu'il y avait effectivement une compensation des coats. En conclusion, l'ensemble des etudes indique que les traitements psychologiques i) peuvent etre des formes de traitement efficaces en termes de coats et ii) ont le potentiel de reduire les coats des soins de same, etant donne que les patients bien traites reduisent habituellement leurs recours A d'autres services de soins de same.
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