Drug Addiction Treatment Centers: Market Determinants of Ownership Status

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1 Drug Addiction Treatment Centers: Market Determinants of Ownership Status Scholar: Victoria Perez University of Pennsylvania Mentor: Guy David, PhD, Wharton School of the University of Pennsylvania

2 Facility Ownership, % 2% Private Nonprofit 10% Private Forprofit 27% 60% State/Local government Federal government Tribal Government Substance Abuse and Mental Health Services Administration, Office of Applied Studies. National Survey of Substance Abuse

Tribal Government Substance Abuse and Mental Health Services

3 Ownership and Treatment Differences in Facility Characteristics of Non-profit and For-Profit ATCs: Characteristics Non-profit For-profit Staff: General staff PhD/MD staff X (8.3%) Specialization: Multiple modes of care X (21%) Payment: Private insurance Client fees Medicaid X (twice as likely) X (49.1%) X (53%) X (12%) Additional services: Follow-up care Individual therapy X (1.7%) X (14%) Rodgers, John H., and Paul G. Barnett. "Two Separate Tracks? A National Multivariate Analysis of Differences Between Public and Private Substance Abuse Treatment Programs." American Journal of Drug Alcohol Abuse 26(2000):

1%) X (53%) X (12%) Additional services: Follow-up care Individual therapy X (1.7%) X (14%) Rodgers, John H., and Paul G. Barnett. "Two Separate Tracks?

4 Question What market determinants increase the likelihood of a non-profit status for an individual addiction treatment center (ATC)?

5 Answer Ownership = f (facility traits, market traits, market effects, time effects) own imt = α + βx imt +δz mt +η m + Φ t + ε imt α: intercept βx imt : effects of an ATC s traits at time t δz mt : effects of a market s traits at time t η m : constant market effect Φ t : constant time effect ε imt : measurement error

effects of an ATC s traits at time t δz mt : effects of a market s traits at

6 Methodology Data from the following sources: National Survey of Substance Abuse Treatment Services (N-SSATS) North American Industry Classification System (NAICS) Internal Revenue Service (IRS) Census Local Area Unemployment Statistics (LAUS) Small Area Income and Poverty Estimates (SAIPE) Uniform Crime Reports (UCR) Series of linear regressions relating ownership status to: Local competition Financial traits of local non-profit ATCs Crime Demographics

Unemployment Statistics (LAUS) Small Area Income and Poverty Estimates (SAIPE) Uniform Crime Reports (UCR) Series

7 Limitations IRS data: tax-exempt organizations Unable to match facilities across datasets Unable to match facilities over time Observations N-SSATS N-SSATS County Data N-SSATS County Data IRS 10199

match facilities over time Observations N-SSATS

8 Taking time out of the equation own im = α + βx im +δz m +ε im α: intercept βx im : effects of an ATC s traits δz m : effects of a market s traits ε im : measurement error

9 Controlling for State Culture own ims = α + βx ims +δz ims + η s +ε ims α: intercept βx ims : effects of an ATC s traits δz ms : effects of a market s traits η s : constant state effect ε ims : measurement error

10 Sample Description Observations R (State) R 2 (State) N-SSATS County Data IRS (.58).32 (.33)

11 Preliminary Results The probability of non-profit status of an addiction treatment center

12 Results: Crime Without state variables, Positively Correlated Drug possession Negatively Correlated Drug sales With state variables, Not significantly correlated Drug possession Drug sales Alpha level:.05

Drug sales With state variables, Not significantly

13 Results: Economic and Demographic Traits Positively Correlated Negatively Correlated Not significantly correlated Male population Population change Race/Ethnicity Household SES Unemployment Median household income Alpha level:.05

correlated Male population Population change

14 Results: Facility traits Excluding your facility, Not significantly correlated Non-profit financial traits Mean income Mean tenure Alpha level:.05

15 Results: Local Competition Excluding your facility, Positively Correlated Non-profit facilities Negatively Correlated For-profit facilities Local government facilities Not significantly correlated Federal government facilities Alpha level:.01

Correlated For-profit facilities Local government facilities

16 Conclusions The value of being a non-profit seems to be affected by composition of competition, not profitability or tenure There s a need to observe markets over time in order to capture market characteristics

profitability or tenure There s a need to observe

17 Lessons 1. Stata 2. Research 3. Future course

18 A most sincere thank you to Professor Guy David Joanne Levy LDI staff: Susan, Lisa, Theresa, and Kelly Fellow SUMR scholars

19 Questions?

How To Understand The Difference Between A Publicly Funded Substance Abuse Provider And A Medicaid Provider

How To Understand The Difference Between A Publicly Funded Substance Abuse Provider And A Medicaid Provider National Association of State Alcohol and Drug Abuse Directors, Inc. Analytic Brief Understanding the Baseline: Publicly Funded Substance Abuse Providers and Medicaid Introduction In recent discussions