NDARC Technical Report No. 203


Heroin use results in a significant social burden. In addition to the wider social impact, heroin use represents a serious public health concern creating many challenges for policy makers and treatment providers alike. This health burden comes at some cost; heroin dependence accounts for a significant proportion of the total burden of disease and injury related to illicit drugs in Australia. Despite this, there is little information on either the use of health care services generally, or more specifically the use of drug treatment services over extended periods of time, by heroin users in Australia.

This report documents economic costs of treatment for heroin and other health services using data from the Australian Treatment Outcome Study. The aims of this report are to:

  1. Determine patterns of treatment for heroin dependence and other health services use among heroin users
  2. Determine the costs of treatment and other health services use.

This current report presents 12 month cost data from New South Wales, South Australia and Victoria.

Seven hundred and forty five individuals entering treatment and 80 heroin users not seeking treatment were recruited into the study and interviewed by trained research staff using a structured questionnaire. A total of 649 individuals, who were followed up at 12 months and for whom there was complete resource use information are included in the report. Data was collected on all treatment experiences (type, and number of days of treatment) over the 12-month follow-up, use of other health care services, as well as their heroin and other drug use, mental health and criminal activity. Treatment and other health services use were costed using a set of standard prices.


Index treatment

  • The costs of index treatments over the 12-month follow-up period totalled $1,894,861 for the 649 subjects. On average the index treatment costs were $2,920 per person with an average of 83 days in treatment or an average cost per day of $35 (range $10 to $203).

Non-index treatments

  • In addition to the index treatment, the sample received other drug treatments during the 12 months. The total cost of this other drug treatment was $2,120,283 with a mean of $3,267. Seventy percent of the sample reported at least one episode of non-index treatment during the 12 months with 41.6% of the sample having some form of maintenance therapy, 19.6% residential rehabilitation and 25.6% detoxification with clear differences across the original treatment groups.

Total treatment (combining index and non-index treatment)

  • The total treatment (index and non-index) costs at 12 months were $4,015,363 for the 649 individuals, with a mean of $6,187. Overall, the mean length of stay was 179.5 days over an average of 2.6 episodes of care.
  • As is common in health care expenditures, the distribution of the total costs is skewed, with 25% of individuals accounting for only 6% of the costs, and 25% of individuals accounting for 60% of total treatment expenditures.

Other health system utilisation and costs

  • The expenditure for the whole sample on non-treatment health services use (HSU) for one month at baseline was $252,862 and for one month at 12 months was $298,843, an 18% increase. The mean expenditures increased in all groups except for the residential rehabilitation group where the mean expenditures declined from $777 at baseline to $473 at 12 months. Hospital/ambulance expenditure accounted for more than half the expenditures at both baseline and the 12-month follow-up, at 57.8% and 63.6% respectively.
  • As with the treatment expenditures, a small proportion of the ATOS cohort incurred the majority of the HSU expenditures. At baseline, 19% of individuals consumed no HSU resources, while 15% of the group consumed 74% of the resources. A similar pattern is seen at the 12-month follow-up interview, where 23% reported no additional use of health care services, and 79% of the resources were used by 14% of individuals.

It is beneficial to consider what the $6,187 of drug treatment purchased. There was, on average, 15.3 more heroin free days per month at twelve months, a 76% improvement. There was a 55% improvement in rates of abstinence and a 52% decrease in the numbers who committed a crime in the previous month. In this study, the cost savings related to decrease in crime were not estimated, however results from NTORS in the UK determined that the cost of crime decreased by 50% in two in two years post treatment compared to the year prior to treatment. This suggests that the purchase of the drug treatment provides substantial benefit to society in terms of decrease in heroin use, both in terms of abstinence and harm reduction and a decrease in crime.

Citation: Shanahan, M., Havard, A., Mills, K., Williamson, A., Ross, J., Teesson, M., Darke, S., Ali, R., Cooke, R. and Lynskey, M. (2004) Health services use and treatment costs over 12 months among heroin users: Findings from the Australian Treatment Outcomes Study (ATOS), Sydney: National Drug and Alcohol Research Centre.



M. Shanahan, A. Havard, K. Mills, A. Williamson, J. Ross, M. Teesson, S. Darke, R. Ali, R. Cooke, M. Lynskey
Date Commenced
29 Oct 2004
Resource Type
Technical Reports