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

image - 1353904918 Cost Benefit Scale Square
Date Commenced:
Expected Date of Completion:
Project Supporters:

NHMRC Project Grant

Drug Type:
Project Members: 
image - Michael Farrell 0
Ph EA Tori Barnes: 02 9385 0292 / t.barnes@unsw.edu.au
image - Marian Shanahan
Dr Marian Shanahan
Honorary Senior Lecturer
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Dr Phuong Hoang
Casual Academic
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.

Project Collaborators: External: 

Professor Pascal Perez
University of Wollongong

Dr Nagesh Shukla
University of Wollongong

Vu Lam Cao
University of Wollongong


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 original 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.

This unique study will undertake a cost-benefit analysis (CBA) of health interventions for heroin dependence. 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 is 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.

An Individual Sampling Model (ISM) was used to construct heroin careers for the population of NSW heroin users.The model represented 42 years of a heroin user’s career (ages 18 to 60), with individuals cycling into and out of heroin using states (including abstinence), as well as treatment and prison states. The model platform was an Individual Sampling Model (micro-simulation), with 9 states, and 111,400 individuals each with age, gender, HIV and HCV status, and treatment history. Probabilities associated with crime commission and individually calculated lengths of stay in each state were determined from multiple datasets. Costs for the calculation of Net Social Benefit included the costs of treatment provision, healthcare services, blood borne virus treatment, criminal activity, life years lost, and family benefit of treatment. 

  1. Hoang, V.P., Shanahan, M., Shukla, N. Perez, P., Farrell, M. & Ritter, A. (2016) A Review of Modelling Approaches in Economic Evaluations of Health Interventions for Drug and Alcohol Problems. BMC Health Services Research, 16:127 DOI: 10.1186/s12913-016-1368-8
  2. Ritter, A., Shukla, N., Shanahan, M., Van Hoang, P., Cao VL., Perez, P. Farrell, M. (in press) Building a Microsimulation Model of Heroin Use Careers in Australia. The International Journal of Microsimulation
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