PA-01-013: ECONOMICS OF DRUG ABUSE TREATMENT AND PREVENTION SERVICES

Department of Health
and Human Services (HHS)

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ECONOMICS OF DRUG ABUSE TREATMENT AND PREVENTION SERVICES Release Date: November 7, 2000 PA NUMBER: PA-01-013 (This PA has been reissued, see PA-05-111) National Institute on Drug Abuse THIS PROGRAM ANNOUNCEMENT (PA) USES THE "MODULAR GRANT" AND "JUST-IN-TIME" CONCEPTS. IT INCLUDES DETAILED MODIFICATIONS TO STANDARD APPLICATION INSTRUCTIONS THAT MUST BE USED WHEN PREPARING APPLICATIONS IN RESPONSE TO THIS PA. PURPOSE This PA encourages research on the economics of drug abuse treatment and prevention services. Drug abuse and dependency was estimated to generate an economic burden of $110 billion in 1995, driven by the twin epidemics of cocaine and HIV/AIDS infection. The economic studies will be supported jointly by the Services Research Branch and the Prevention Research Branch of the Division of Epidemiology and Prevention Research as part of the Institute’s health services research program. This PA replaces, in its entirety, PA-096-075, Economics of Drug Treatment Services, published in the NIH Guide for Grants and Contracts, Volume 25, Number 32, September 27, 1996. HEALTHY PEOPLE 2010 The Public Health Service (PHS) is committed to achieving the health promotion and disease prevention objectives of "Healthy People 2010," a PHS- led national activity for setting priority areas. This PA, Economics of Drug Abuse Treatment and Prevention Services, is related to one or more of the priority areas. Potential applicants may obtain a copy of "Healthy People 2010" at http://www.health.gov/healthypeople/. ELIGIBILITY REQUIREMENTS Applicants may be submitted by domestic and foreign, for-profit and non- profit organizations, such as universities, colleges, hospitals, laboratories, units of State and local governments, and eligible agencies of the Federal government. Racial/ethnic minority individuals, women, and persons with disabilities are encouraged to apply as Principal Investigators. MECHANISM OF SUPPORT The PA will use the National Institutes of Health (NIH) research project grant (R01), small grant (R03), center core grants (P30), and specialized center (P50). Responsibility for the planning, direction, and execution of the proposed project will be solely that of the applicant. The total project years for an application submitted in response to this PA may not exceed five years. For the P30 and P50 mechanisms, applicants must follow the NIDA Guidelines for Center grants available at http://www.nida.nih.gov. RESEARCH OBJECTIVES Summary. Research is sought on (1) financing of drug abuse treatment and prevention services, including health insurance and/or payment mechanisms, (2) alternative delivery systems and managed care, (3) cost-benefit, cost- effectiveness, and cost-utility analysis, (4) cost and production of drug abuse treatment and prevention, and (5) methodological research. Background. Economic research on drug abuse treatment and prevention services informs decisions related to the allocation of resources and the desire to enhance efficiency and equity. With social experimentation and institutional change, many natural experiments are available for the application of economic analysis. In this environment, applied research on alternative payment systems, public and private financing systems, and the design of insurance must be grounded in sound microeconomic principles. Other economic research may build on treatment and prevention effectiveness studies or on randomized clinical trials. Economic research on HIV/AIDS as it relates to treatment and prevention of drug use, abuse, and dependency continues as a high priority. This PA calls for studies to fill the gap in knowledge about the economics of drug abuse services for treatment and prevention. Two resources may be found at the NIDA Web site: http://www.nida.nih.gov/hsr/hsrindex.html. First, there are separate bibliographies on the economics of drug abuse treatment and prevention services. Second, there is a summary of a scientific meeting held April 7, 1998, "Forging the Link: The Economics of Drug Abuse Prevention and Treatment Services," at which experts provided guidance on a health services research agenda. The economics of drug abuse services studies supply factors such as: (1) price of drug abuse treatment and prevention, (2) technology, (3) prices of resource inputs, (4) prices of related goods, (5) market organization, and (6) special influences such as government subsidies, insurance arrangements, and risk sharing. The economics of drug abuse services also studies demand factors such as: (1) price of drug abuse treatment and prevention, (2) average income of target populations, (3) population characteristics and the need for treatment and prevention, (4) prices of related goods, (5) preferences or tastes, and (6) special influences such as patient health, court interventions, family interventions, barriers to treatment, drug testing, insurance coverage, and benefit structures. Financing of drug abuse services is derived from federal, state, and local government funds, as well as private sector funds from health insurance, consumer out-of-pocket expenditures, and charity. The scientific inquiry into financing these services requires normative and positive economic analysis on allocation and distribution issues. For example, because different levels of government are involved in public financing, fiscal federalism is a central issue. Because indigent health status is a major concern, distributive issues must be addressed. Analysis of both public and private provision of health insurance is essential. The system of drug treatment and prevention service delivery is undergoing redesign, and studies about payment mechanisms are encouraged to examine implications and outcomes. The history of medical and behavioral health care delivery systems demonstrates a move from traditional fee-for-service to managed care alternatives. In the drug abuse treatment field, there has been the rise of behavioral health care organizations (BHOs). Usually for profit, BHOs administer the mental health, alcohol, and drug abuse treatment and prevention benefits in private or public health plans. BHOs employ managed care mechanisms to manage the quality, access, outcomes, and costs of drug services delivery. Managed care systems require research on principal-agent relationships and design of incentives, contracts, and regulations for drug abuse services. Cost-benefit, cost-effectiveness, and cost-utility analyses are collaborative activities by economic and drug abuse services researchers who investigate the effectiveness of innovative treatment therapies and prevention interventions, as well as effectiveness in real-world delivery systems. Methodological work is needed on outcomes, costs of services, as well as health and other non-health benefits. Economic analysis also has a role in interpreting the results of outcome monitoring to improve the quality, allocation, and distribution of resources and interventions within delivery systems. Costs have a spectrum reaching from direct and indirect treatment and prevention program costs to the broad sweep of social benefits and costs. Unfortunately, information on the unit services costs of drug abuse services has been rudimentary, which has hampered full cost pricing of service delivery for innovative and standard drug abuse services. This is particularly a problem with respect to prevention, where services often involve costs embedded in other systems such as schools, law enforcement, community services, or employee assistance programs (EAPs). Treatment costs for other disease disorders can be increased if a drug disorder is present, and cost savings (or cost-offsets ) are recognized as a consideration in integrated health care or community service networks. Conceptualizing and measuring the relationships among accounting cost, marginal cost, average cost, and total cost in drug treatment and prevention programs and service delivery systems has received little attention. Research in these areas is needed so that precise measurement of treatment and prevention costs can be established. Economic research is sought in the cost and production function for drug treatment and prevention services. Researchers are encouraged to develop rigorous designs for studies in the economics of drug abuse treatment and prevention services. The following are illustrative of problem areas that may be addressed under this announcement. The examples are not exhaustive, and submissions of other studies are anticipated. Financing of Drug Abuse Treatment and Prevention Services Fundamental questions must be examined: (1) What criteria should be applied in judging budget policies? (2) What are the social, political, economic, and historical forces that have formed the present funding pattern and that will determine contemporary and future patterns? and (3) What are the interactions between the private and public drug services sectors as various funding plans are devised? Financing issues are complex and besides analytical studies, these issues require descriptive studies to identify the sources of funding and their relationship to the organization and delivery of treatment and prevention services. Research topics in this broad area may be further refined into two subtopic areas. Health Insurance. The provision of private and public health insurance for drug abuse treatment and prevention affects many participants in treatment and prevention service delivery systems. Examples of research topics include: o Incentives, structure, and behavior of private and public insurers, patients with insurance coverage, and patients without insurance coverage, o Analysis of market functioning, moral hazard, adverse selection, risk pools, and reinsurance, o Design of drug abuse treatment and prevention benefits in public and private health plans, and economic evaluation of benefit parity and state mandates, o Analysis of the prevalence of drug treatment insurance coverage and types of coverage among the insured, underinsured, as well as studies about the uninsured in need of treatment, and o Insurance studies related to patients with HIV/AIDS or at high risk for infection. Payment Mechanisms. Payment mechanisms affect the delivery, access to services, utilization, and quality of drug abuse treatment and prevention services. Examples of such studies include: o Federal and state health care reform: prepayment, fee-for-services, capitation, and price regulation, o Risk adjustment methods (case-mix or severity) and reinsurance, o Reimbursement levels and service adjustments, and o Carve-outs, risk contracting, and performance contracting. Alternative Delivery Systems and Managed Care Studies of managed care and behavioral health care organizations on quality, access, outcomes, and costs of service delivery examine an area where much change is experienced. Such studies include: o Economic evaluation of well-defined (public and private) managed cared systems on quality, access, outcomes, and costs of service delivery, o Economic evaluation of prevention programs under managed care, o Managed care effects on clinical decision making and on the structure and function of the treatment provider organization, o Organization of drug abuse treatment delivery that is either carved-out of or integrated into a managed care system, o Economic evaluation of HIV/AIDS services under managed care systems, and o Economic evaluation of employee assistance programs. Cost-Benefit, Cost-Effectiveness, and Cost-Utility Analysis The analysis of the economic costs and benefits of drug abuse treatment and prevention has usually been derived in conjunction with effectiveness studies. Cost-effectiveness studies are useful in comparing novel treatment and prevention interventions to standard interventions. Cost-utility studies have not been done in conjunction with substance abuse services. Studies in this area include evaluations of: o Innovative treatment and prevention methods targeted at special populations of injection drug users--women, pregnant women, women with children, corrections populations, adolescents, patients with co-occurring disorders, and patients with or at high risk for HIIV/AIDS, o Prevention interventions in various community settings and delivery systems, o Utilization of new or alternative medications for treating drug disorders and other brain and behavioral disorders, o Service integration and linkages, o Drug abuse services within criminal justice settings, and o Benefits using willingness-to-pay methods. Cost and Production of Drug Treatment and Prevention Services A strong conceptualization and measurement of economic costs is needed to support economic evaluations of drug and prevention programs as well as studies of the economic costs to society of drug abuse and dependency. Production function studies are a key complement to drug treatment and prevention cost studies and have not been done. Examples of such cost and production research include: o Estimation of the direct and indirect costs of drug abuse services, as well as cost of ancillary services, o Estimation of component unit service costs and full costs of drug abuse services that comprise standard and innovative interventions, and o Studies of technology, elasticity of substitution, and returns to scale. Methodological Research Research is encouraged that will develop and test the application of new methods of economic analysis in drug abuse services research. Examples include: o Advancing health insurance theory related to drug abuse services, o Improving assessment of alternative delivery systems and managed care, o Developing new statistical methods associated with economic analysis of drug abuse services, o Developing simulation models that advance analysis of drug abuse services financing, o Improving methodologies of cost-benefit, cost-effectiveness, and cost- utility analysis, o Incorporating dynamic models of disease, prevention, and treatment progression into economic models, and o Transferring information from research to practice. INCLUSION OF WOMEN AND MINORITIES IN RESEARCH INVOLVING HUMAN SUBJECTS - Updated August 2, 2000 It is the policy of the NIH that women and members of minority groups and their subpopulations must be included in all NIH supported biomedical and behavioral research projects involving human subjects unless a clear and compelling rationale and justification are provided that inclusion is inappropriate with respect to the health of the subjects or the purpose of the research. This policy results from the NIH Revitalization Act of 1993 (Section 492B of Public Law 103-43). All investigators proposing research involving human subjects should read the UPDATED "NIH Guidelines for Inclusion of Women and Minorities as Subjects in Clinical Research," published in the NIH Guide for Grants and Contracts on August 2, 2000, (http://grants.nih.gov/grants/guide/notice-files/NOT-OD-00-048.html) , a complete copy of the updated Guidelines is available at http://grants.nih.gov/grants/funding/women_min/guidelines_update.htm. The revisions relate to NIH defined Phase III clinical trials and require: a) all applications or proposals and/or protocols to provide a description of plans to conduct analyses, as appropriate, to address differences by sex/gender and/or racial/ethnic groups, including subgroups if applicable, and b) all investigators to report accrual, and to conduct and report analyses, as appropriate, by sex/gender and/or racial/ethnic group differences. INCLUSION OF CHILDREN AS PARTICIPANTS IN RESEARCH INVOLVING HUMAN SUBJECTS It is the policy of NIH that children (i.e., individuals under the age of 21) must be included in all human subject research, conducted or supported by the NIH, unless there are scientific and/or ethical reasons not to include them. This policy applies to all initial (Type 1) applications submitted for receipt dates after October 1, 1998. All investigators proposing research involving human subjects should read the "NIH Policy and Guidelines on the Inclusion of Children as Participants in Research Involving Human Subjects" that was published in the NIH Guide for Grants and Contracts, March 6, 1998, and is available at the following URL address: http://grants.nih.gov/grants/guide/notice-files/not98-024.html. Investigators also may obtain copies of these policies from the program staff listed under INQUIRIES. Program staff may also provide additional relevant information concerning this policy. NATIONAL ADVISORY COUNCIL ON DRUG ABUSE RECOMMENDED GUIDELINES FOR THE ADMINISTRATION OF DRUGS TO HUMAN SUBJECTS The National Advisory Council on Drug Abuse recognizes the importance of research involving the administration of drugs to human subjects and has developed guidelines relevant to such research. Potential applicants are encouraged to obtain and review the recommendations of the Council before submitting an application that will administer compounds to human subjects. The Guidelines are available on NIDA"s Home Page at http://www.nida.nih.gov under Funding or may be obtained by calling (301) 443-2755. URLS IN NIH GRANT APPLICATIONS OR APPENDICES All applications and proposals for NIH funding must be self-contained within specified page limitations. Unless otherwise specified in an NIH solicitation, internet addresses (URLs) should not be used to provide information necessary to the review because reviewers are under no obligation to view the Internet sites. Reviewers are cautioned that their anonymity may be compromised when they directly access an Internet site. APPLICATION PROCEDURES Applications are to be submitted on the grant application form PHS 398 (rev. 4/98) and will be accepted at the standard application deadlines as indicated in the application kit. Application kits are available at most institutional offices of sponsored research and may be obtained from the Division of Extramural Outreach and Information Resources, National Institutes of Health, 6701 Rockledge Drive, MSC 7910, Bethesda, MD 20892-7910, telephone (301) 710-0267, E-mail: GrantsInfo@nih.gov. Applicants planning to submit an investigator-initiated new (Type 1), competing continuation (Type 2), competing supplement, or any amended/revised version of the preceding grant application types requesting $500,000 or more in direct costs for any year are advised that he or she must contact the Institute or Center (IC) program staff before submitting the application, i.e., as plans for the study are developed. Furthermore, the applicant must obtain agreement from the IC staff that the IC will accept the application for consideration for award. Finally, the applicant must identity, in a cover letter sent with the application, the staff member and the Institute or Center who agreed to accept assignment of the application. This policy requires an applicant to obtain agreement for acceptance of both any such application and any such subsequent amendment. Refer to the NIH Guide for Grants and Contracts, March 20, 1998, at: http://grants.nih.gov/grants/guide/notice-files/not98-030.html. SPECIFIC INSTRUCTIONS FOR MODULAR GRANT APPLICATIONS BUDGET INSTRUCTIONS Modular Grant applications will request direct costs in $25,000 modules, up to a total direct cost request of $250,000 per year. (Applications that request more than $250,000 direct costs in any year must follow the traditional PHS 398 application instructions.) The total direct costs must be requested in accordance with the program guidelines and modifications made to the standard PHS 398 application instructions described below: PHS 398 o FACE PAGE - Items 7a and 7b should be completed, indicating Direct Costs (in $25,000 increments up to a maximum of $250,000) and Total Costs [Modular Total Direct plus Facilities and Administrative (F&A) costs] for the initial budget period. Items 8a and 8b should be completed indicating the Direct and Total Costs for the entire proposed period of support. o DETAILED BUDGET FOR THE INITIAL BUDGET PERIOD - Do not complete Form Page 4 of the PHS 398. It is not required and will not be accepted with the application. o BUDGET FOR THE ENTIRE PROPOSED PERIOD OF SUPPORT - Do not complete the categorical budget table on Form Page 5 of the PHS 398. It is not required and will not be accepted with the application. o NARRATIVE BUDGET JUSTIFICATION - Prepare a Modular Grant Budget Narrative page. (See http://grants.nih.gov/grants/funding/modular/modular.htm for sample pages.) At the top of the page, enter the total Direct Costs requested for each year. This is not a Form page. o Under Personnel, list all project personnel, including their names, percent of effort, and roles on the project. No individual salary information should be provided. However, the applicant should use the NIH appropriation language salary cap and the NIH policy for graduate student compensation in developing the budget request. For Consortium/Contractual costs, provide an estimate of total costs (Direct plus F&A) for each year, each rounded to the nearest $1,000. List the individuals/organizations with whom consortium or contractual arrangements have been made, the percent effort of all personnel, and the role on the project. Indicate whether the collaborating institution is foreign or domestic. The total cost for a consortium/contractual arrangement is included in the overall requested Modular Direct Cost amount. Include the letter of intent to establish a consortium. Provide an additional narrative budget justification for any variation in the number of modules requested. o BIOGRAPHICAL SKETCH - The Biographical Sketch provides information used by reviewers in the assessment of each individual"s qualifications for a specific role in the proposed project, as well as to evaluate the overall qualifications of the research team. A biographical sketch is required for all key personnel, following the instructions below. No more than three pages may be used for each person. A sample biographical sketch may be viewed at: http://grants.nih.gov/grants/funding/modular/modular.htm. - Complete the educational block at the top of the form page, - List position(s) and any honors, - Provide information, including overall goals and responsibilities, on research projects ongoing or completed during the last three years, and - List selected peer-reviewed publications with full citations. o CHECKLIST - This page should be completed and submitted with the application. If the F&A rate agreement has been established, indicate the type of agreement and the date. All appropriate exclusions must be applied in the calculation of the F&A costs for the initial budget period and all future budget years. o The applicant should provide the name and phone number of the individual to contact concerning fiscal and administrative issues if additional information is necessary following the initial review. The title and number of the PA must be typed on line 2 of the face page of the application form and the YES box must be marked. Submit a signed, typewritten original of the application, including the checklist, and five signed photocopies in one package to: CENTER FOR SCIENTIFIC REVIEW NATIONAL INSTITUTES OF HEALTH 6701 ROCKLEDGE DRIVE, ROOM 1040 MSC 7710 BETHESDA, MD 20892-7710 BETHESDA, MD 20817 (for express/courier service) REVIEW CONSIDERATIONS Applications will be assigned on the basis of established PHS referral guidelines. Applications will be evaluated for scientific and technical merit by an appropriate scientific review group convened in accordance with the standard NIH peer review procedures. As part of the initial merit review, all applications will receive a written critique and undergo a process in which only those applications deemed to have the highest scientific merit, generally the top half of the applications under review, will be discussed, assigned a priority score and receive a second level review by the appropriate national advisory board or council. Review Criteria The goals of NIH-supported research are to advance the understanding of biological systems, improve the control of disease, and enhance health. In the written comments, reviewers will be asked to discuss the following aspects of the application in order to judge the likelihood that the proposed research will have a substantial impact on the pursuit of these goals. Each of these criteria will be addressed and considered in assigning the overall score, weighting them as appropriate for each application. Note that the application does not need to be strong in all categories to be judged likely to have major scientific impact and thus deserve a high priority score. For example, an investigator may propose to carry out important work that by its nature is not innovative but is essential to move a field forward. (1) Significance: Does this study address an important problem? If the aims of the application are achieved, how will scientific knowledge be advanced? What will be the effect of these studies on the concepts or methods that drive this field? (2) Approach: Are the conceptual framework, design, methods, and analyses adequately developed, well integrated, and appropriate to the aims of the project? Does the applicant acknowledge potential problem areas and consider alternative tactics? (3) Innovation: Does the project employ novel concepts, approaches, or methods? Are the aims original and innovative? Does the project challenge existing paradigms or develop new methodologies or technologies? (4) Investigator: Is the investigator appropriately trained and well suited to carry out this work? Is the work proposed appropriate to the experience level of the principal investigator and other researchers (if any)? (5) Environment: Does the scientific environment in which the work will be done contribute to the probability of success? Do the proposed experiments take advantage of unique features of the scientific environment or employ useful collaborative arrangements? Is there evidence of institutional support? In addition to the above criteria, in accordance with NIH policy, all applications will also be reviewed with respect to the following: o The adequacy of plans to include genders, minorities, and their subgroups, and children as appropriate for the scientific goals of the research. Plans for the recruitment and retention of subjects will also be evaluated. o The reasonableness of the proposed budget and duration in relation to the proposed research. o The adequacy of the proposed protection for humans, animals, or the environment, to the extent they may be adversely affected by the project proposed in the application. AWARD CRITERIA Applications will compete for available funds with all other recommended applications. The following will be considered in making funding decisions: Quality of the proposed project as determined by peer review, availability of funds, and program priority. INQUIRIES Inquiries are encouraged. The opportunity to clarify issues or questions from potential applicants is welcomed. Direct inquiries regarding programmatic issues to: William S. Cartwright, Ph.D. Division of Epidemiology, Services, and Prevention Research National Institute on Drug Abuse 6001 Executive Blvd, Room 4222, MSC 9565 Bethesda, Maryland 20892-9565 Telephone: (301) 443-4060 Fax: (301) 443-6815 E-mail: wc34b@nih.gov Direct inquiries regarding review issues to: Teresa Levitin, Ph.D. Office of Extramural Affairs National Institute on Drug Abuse 6001 Executive Boulevard, Room 3158, MSC 9547 Bethesda, MD 20892-9547 Telephone: (301) 443-2755 FAX: (301) 443-0538 Email: tlevitin@nida.nih.gov Direct inquiries regarding fiscal matters to: Gary Fleming, J.D., M.A. Grants Management Branch Office of Planning and Resource Management National Institute on Drug Abuse 6001 Executive Boulevard, Room 3131, MSC 9541 Bethesda, MD 20892-9541 Telephone: (301) 443-6710 FAX : (301) 594-6847 E-mail: gf6s@nih.gov AUTHORITY AND REGULATIONS This program is described in the Catalog of Federal Domestic Assistance No. 93.279. Awards are made under authorization of sections 301 and 405 of the Public Health Service Act as amended (42 USC 241 and 284) and administered under NIH grants policies and Federal Regulations 42 CFR 52 and 45 Parts 74 and 92. This program is not subject to the intergovernmental review requirement of Executive Order 12372 or Health Systems Agency review. The Public Health Service (PHS) strongly encourages all grant recipients to provide a smoke-free workplace and promote the non-use of all tobacco products. In addition, Public Law 103-227, the Pro-Children Act of 1994, prohibits smoking in certain facilities (or in some cases, any portion of a facility) in which regular or routine education, library, day care, health care or early childhood development services are provided to children. This is consistent with the PHS mission to protect and advance the physical and mental health of the American people.

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