Volume 39 | Number 2 | April 2004

Abstract List

Todd Olmstead, William D. White, Jody Sindelar


To examine the impact of managed care on the number and types of services offered by substance abuse treatment (SAT) facilities. Both the number and types of services offered are important factors to analyze, as research shows that a broad range of services increases treatment effectiveness.

Data Sources

The 2000 National Survey of Substance Abuse Treatment Services (NSSATS), which is designed to collect data on service offerings and other characteristics of SAT facilities in the United States. These data are merged with data from the 2002 Area Resource File (ARF), a county‐specific database containing information on population and managed care activity. We use data on 10,513 facilities, virtually a census of all SAT facilities.

Study Design

We estimate the impact of managed care (MC) on the number and types of services offered by SAT facilities using instrumental variables (IV) techniques that account for possible endogeneity between facilities' involvement in MC and service offerings. Due to limitations of the NSSATS data, MC and specific services are modeled as binary variables.

Principal Findings

We find that managed care causes SAT facilities to offer, on average, approximately two fewer services. This effect is concentrated primarily in medical testing services (i.e., tests for TB, HIV/AIDs, and STDs). We also find that MC increases the likelihood of offering substance abuse assessment and relapse prevention groups, but decreases the likelihood of offering outcome follow‐up.


Our findings raise policy concerns that managed care may reduce treatment effectiveness by limiting the range of services offered to meet patient needs. Further, reduced onsite medical testing may contribute to the spread of infectious diseases that pose important public health concerns.