THE PRISON

Griffith et al. / PRISON

JOURNALCOST
/ September
ANALYSIS
1999

A COST-EFFECTIVENESS ANALYSIS
OF IN-PRISON THERAPEUTIC
COMMUNITY TREATMENT
AND RISK CLASSIFICATION
JAMES D. GRIFFITH
MATTHEW L. HILLER
KEVIN KNIGHT
D. DWAYNE SIMPSON
Texas Christian University

Policy makers need scientifically based information to help them to determine which
correctional treatment alternatives are effective and economically viable. Three-year
outcome data from 394 parolees (291 treated, 103 untreated comparison) were exam-
ined to determine the relative cost-effectiveness of prison-based treatment and after-
care, controlling for risk of recidivism. Findings showed that intensive services were
cost-effective only when the entire treatment continuum was completed, and that the
largest economic impact was evident among high-risk cases. Therefore, assignments
to correctional treatment should consider an offender’s problem severity level, and
every effort should be made to engage them in aftercare upon release from prison.

The cumulative effects of the national War on Drugs has been an increas-
ing burden on the criminal justice system. In response to public opinion over
the past two decades, the legal system has responded to drugs and crime by
“getting tough.” This has included stepped-up law enforcement, stiffer crimi-
nal sentencing policies, and an expansion of correctional capacity. As a

This project was supported by Grant No. 96-IJ-CX-0024 awarded by the National Institute of
Justice, Office of Justice Programs, U.S. Department of Justice. Points of view in this document
are those of the authors and do not necessarily represent the official position or policies of the
U.S. Department of Justice. Correspondence concerning this article should be addressed to the
Institute of Behavioral Research, Texas Christian University, TCU Box 298740, Fort Worth, TX
76129; e-mail: ibr@tcu.edu. More information (including data collection instruments that can
be downloaded) is available on the Internet at www.ibr.tcu.edu.
THE PRISON JOURNAL, Vol. 79 No. 3, September 1999 352-368
© 1999 Sage Publications, Inc.
352
 Griffith et al. / PRISON COST ANALYSIS 353

result, record numbers of offenders currently are confined in our prisons and
jails (Bureau of Justice Statistics, 1999b).
The majority of offenders behind bars have been involved with illicit
drugs (Blumstein, 1995; Blumstein & Beck, in press). The 1997 Survey of
Inmates in State and Federal Correctional Facilities indicates that 83% of all
prisoners had some past drug use, 57% used drugs in the month prior to their
crime, and 33% reported using drugs while committing their last offense
(Bureau of Justice Statistics, 1999a). Similarly, 68% of arrestees across the
United States test positive for one or more drugs (Bureau of Justice Statistics,
1999b), and approximately 1 in 10 drug offenders receive at least a 1-year
prison sentence for these violations (Maguire & Flanagan, 1991).
With so many drug-involved offenders under correctional supervision,
some have suggested that this is a unique and cost-effective opportunity to
provide treatment because the majority have never accessed community
resources for help with their substance abuse problems (Gerstein & Har-
wood, 1990; Leukefeld, 1991; Leukefeld & Tims, 1993; Lipton, 1995). Data
from a national prison survey in 1997 shows that about one third (35%) of all
state prisoners have received substance abuse treatment at some point in their
lifetime (42% for those involved with drugs or alcohol), but less than half
(40%) of those reporting regular drug use receive prison-based services
(Bureau of Justice Statistics, 1999a). Thus, treatment during incarceration is
an often-missed chance to intervene in the drugs-and-crime cycle that could
help ease prison crowding and reduce costs associated with returns to the
criminal justice system.
Several recent evaluations support the effectiveness of in-prison treat-
ment, especially when followed by residential aftercare, for reducing recidi-
vism and relapse rates and for improving parole outcomes (Field, 1985,
1989, 1992; Hiller, Knight, & Simpson, 1999; Inciardi, Martin, Butzin,
Hooper, & Harrison, 1997; Knight, Simpson, Chatham, & Camacho, 1997;
Lipton, 1995; Prendergast, Anglin, & Wellisch, 1995; Wexler, De Leon, Tho-
mas, Kressel, & Peters, 1999; Wexler, Falkin, & Lipton, 1990; Wexler,
Falkin, Lipton, & Rosenblum, 1992; Wexler & Williams, 1986). However,
more work is needed to determine which factors should be considered when
placing offenders in treatment. One promising area of study is offender risk
classification, the formal assignment of the probability of recidivism based
on standard screening instruments like the Lifestyle Criminality Screening
(LSF) form (Walters, White, & Denney, 1991) and the Salient Factor Score
(SFS) (Hoffman, 1983). Indeed, prior research with general population
inmates consistently shows that high-risk cases have serious problems (e.g.,
low educational achievement, history of substance abuse) and reoffend at
354 THE PRISON JOURNAL / September 1999

significantly higher rates following release (Hoffman, 1994; Walters &

McDonough, 1988).
Although they generally have a favorable impact on postrelease criminal
behavior and drug use, the costs associated with prison-based treatment pro-
grams must be considered as well. The social policy question comes down to
whether an investment in providing drug abuse treatment to inmates repre-
sents sound economic decision making. Also, is the same type of treatment
cost-effective for offenders with different levels of problem severity? For
example, it might be more effective and efficient to reserve the most intensive
resources for high-risk cases that show more serious drug-related problems,
because this group has the greatest impact on subsequent criminal justice
costs. Few economic analyses have been conducted on substance abuse pro-
grams within correctional settings, but there have been several that address
costs to society and treatment in community-based facilities.

COST ANALYSES OF DRUG ABUSE TREATMENT

A series of related studies have estimated the costs of alcohol and drug
abuse to society (Harwood, Napolitano, Kristiansen, & Collins, 1984; Liu,
1998; Rice, Kelman, Miller, & Dunmeyer, 1990). They usually confirm what
the majority of society assumes, namely that drug abuse is a major drain on
society’s scarce resources. For example, Liu (1998) reported that adverse
health and social consequences of alcohol and drug abuse cost the state of
Texas an estimated $19.3 billion in 1997. Of that total, 32% ($6.1 billion) was
associated with illegal drug use. On a per capita basis, the 1997 amount trans-
lates to $1,001 per individual in the state, a dramatic economic burden on its
citizens. Although these studies offer estimates of the costs to society, they
lack practical advice. Policy makers need more specific information on the
relative costs and benefits of specific types of drug abuse interventions to
properly evaluate alternative programs. The return on treatment investments
and the cost of keeping a former offender from returning to prison 1 year after
release can be more readily interpreted by criminal justice analysts and used
to make more informed policy decisions.
Hubbard et al. (1989) conducted one of the largest cost studies on
community-based drug abuse treatment. Data collected from a national sam-
ple of treatment programs indicated that publicly funded methadone, resi-
dential, therapeutic community, and outpatient counseling treatment
programs were effective for reducing drug use and criminal behavior.
Overall, long-term residential treatment offered the greatest benefits in
terms of reduced drug use and criminal activity, combined with increased
 Griffith et al. / PRISON COST ANALYSIS 355

productivity in the workforce and less reliance on welfare programs. The

analysis revealed that the costs of drug abuse treatment were substantially
recovered during the time a client remained in treatment, and the savings to
society after a client left a program represented further returns on the initial
investment. These findings are supported from data presented by Flynn,
Kristiansen, Hubbard, and Porto (in press) based on a more recent national
sample of drug treatment programs.
Other studies have shown that effective community-based drug abuse
treatment can reduce costs to the criminal justice system, including policing,
courts, jails and prison, parole, and probation (Alterman et al., 1994; Anglin,
Speckart, Booth, & Ryan, 1989; Gerstein et al., 1994; Harwood et al., 1984).
For example, Gerstein et al. (1994) reported a range of 4-to-1 to 10-to-1 sav-
ings for different treatment modalities. That is, for every dollar spent,
between $4 to $10 were saved. The majority of savings were realized in pre-
venting criminal activity, but this also included costs for hospital visits and
drug use.

PRESENT STUDY

The present study was conducted to extend findings from community-

based programs to the examination of the cost-effectiveness of corrections-
based treatment for drug abuse. Special attention was given to determine the
relative economic impact of treatment, aftercare, and risk classification. This
was done by estimating cost-effectiveness for groups of high- and low-risk
parolees representing individuals who (a) completed both prison- and
community-based components of treatment, (b) completed prison-based
treatment but did not complete aftercare, and (c) belonged to an untreated
matched comparison group. All analyses focused on 3-year reincarceration
rates as the criterion, and it was expected that the most cost-effective treat-
ment would be shown for high-risk parolees who completed all treatment
components.

METHOD

SAMPLE

Data were collected from 291 parolees who received 9 months of treat-
ment at an in-prison therapeutic community (ITC) in Kyle, Texas. Similar
records were available on 103 parolees representing a matched untreated
comparison group from the general prison population. Matching criteria for
356 THE PRISON JOURNAL / September 1999

the treatment and comparison groups included drug use and criminal history.
All inmates in this study were scheduled for parole from prison between
March and December 1994 (see Knight et al., 1997). The comparison group
consisted of parolees who were eligible for, but not sent to, the ITC by the
parole board for a variety of reasons, often because treatment bed space was
limited.
All parolees (N = 394) were male, 45% were African American, and 33%
were White. The majority was between the ages of 26 and 35, and 28% had a
high school education. As also described by Knight et al. (1997), all had
extensive criminal records, much of which was drug related. There were 36%
who were sentenced on a drug charge, and more than two thirds had been
incarcerated previously. Of the Kyle graduates, 71% reported that they had
used marijuana, compared to 54% of the comparison group. Likewise, 38%
of the ITC group reported use of opioids, but only 18% of the comparison
group admitted preprison use at baseline. The treatment and comparison
groups were comparable on their use of alcohol (89% and 84%, respectively)
and cocaine (77% vs. 65%, respectively).

PROGRAM

The Kyle New Vision Program was the first ITC in Texas. It was devel-
oped under 1991 state legislation that established several corrections-based
substance abuse treatment facilities in Texas (Eisenberg & Fabelo, 1996).
The Kyle Program is a 520-bed facility that provides treatment to inmates
during the final 9 months of their prison term. After release, parolees are
mandated to attend 3 months of residential aftercare. For the purposes of this
study, aftercare completion was defined as parolees meeting a prespecified
set of objectives established by the program (e.g., making significant prog-
ress on individualized treatment plans). The residential aftercare phase was
followed by supervised outpatient aftercare lasting up to 1 year.

MEASURES

Background information was abstracted for all parolees from the Texas
Department of Criminal Justice Institutional Division (TDCJ-ID) database,
which includes gender, ethnicity, age, education level, criminal history, and
risk for recidivism. TDCJ-ID staff also completed the SFS (Hoffman &
Beck, 1974) for each parolee during the initial phases of developing their
release plan. The predictive validity of this risk classification system, origi-
nally created by the U.S. Parole Commission, is well established in relation
to reincarceration (see Hoffman, 1983; Hoffman & Beck, 1976, 1980, 1985).
 Griffith et al. / PRISON COST ANALYSIS 357

It is a nine-item instrument that focuses on criminal and drug use history,

education level, previous employment, and the offender’s release plan.
Scores range from 0 to 10, with higher values representing better chances for
positive parole outcomes. Traditionally, parolees who scored between 8 and
10 were classified as having a very good parole prognosis, those with 6 to 7
points were labeled as good risks, cases with 4 to 5 points were considered
fair prospects, and those scoring between 0 and 3 were regarded as parolees
who presented poor parole risks (Hoffman, 1994). Minor changes, however,
were made by the TDCJ-ID to the original classification scheme to place
greater emphasis on prior criminal involvement of the parolee. This
increased the possible range of scores (i.e., 0 to 15 points), and supervision
level was assigned using the revised scale (0-4 = intensive, 5-10 = medium,
and 11-15 = minimum). In the present study, the scale was dichotomized so
that parolees scoring 7 or less were classified as high-risk and those scoring 8
or greater were classified as low-risk. Parolees with a low-risk-level score
may be less likely than those with a high-risk-level score to require intensive
in-prison treatment followed up with aftercare, perhaps needing less inten-
sive outpatient-based care.
Postrelease outcomes were based on return-to-custody data recorded in
the TDCJ-ID database. Because parolees are mandated to remain in Texas as
a condition of their legal supervision status, this database represents a highly
complete record of arrests leading to institutional confinement. At the time of
the record search conducted for this study, parolees had been out of prison at
least 37 months, ranging up to a maximum of 47 months. Not returning to
custody served as the primary outcome variable and was defined as not
returning to TDCJ-ID prison for 30 or more days.

COSTS

The cost-effectiveness analyses conducted focused primarily on the

criminal justice system perspective. In other words, it was of interest to deter-
mine how much it costs the criminal justice system to process and house reof-
fenders. Other legitimate costs and social concerns are identifiable, of
course, but this initial study was intentionally limited to the criminal justice
area where cost estimates tend to be comparatively more direct and defensi-
ble. All costs associated with the criminal justice system’s involvement with
the reoffenders under investigation were valued with costs of treatment
defined by Holder, Longabaugh, Miller, and Rubonis (1991) as the average
cost of care across participants for units of care provided by the facility. Thus,
total costs for a prison term is the total number of days multiplied by the costs
per day.
358 THE PRISON JOURNAL / September 1999

We estimated daily costs for ITC treatment at the Kyle facility, the general
prison population, facility costs, parole, and aftercare (with all costs
expressed in 1999 U.S. dollars). Daily prison, ITC treatment, parole, and
aftercare costs were gathered from the Criminal Justice Policy Council
(Fabelo, 1999). They totaled $50.87 for the average Texas prison, $48.50 for
ITC treatment, $36.98 for residential aftercare, and $2.98 for parole per day.
These cost estimates reflect operational program costs only, and do not
include expenditures associated with construction, renovation, or debt ser-
vice. To calculate the cost per day, the yearly expenditure of a facility was
divided by the average population and then divided by 365 days. The result-
ing figure is the average operational cost per day, per client for the given facil-
ity. Cost estimates included personnel, rent, utilities, contracts, administra-
tive overhead, proportion of central administration resources used by a given
program, food, health care, and state paid benefits (i.e., insurance, retire-
ment, social security, worker’s compensation, and unemployment). Basic
services provided by the program also were included, such as presentence
investigations, court services, supervision, counseling, and referrals to edu-
cational, vocational, and employment services. In addition, supplemental
services at facilities were included (e.g., substance abuse treatment, group
and individual counseling, educational and vocational training, family ser-
vices, crisis intervention, and drug testing).
Because facility depreciation, construction, and renovation costs were not
reflected in the prior estimates, other steps were taken to calculate these
costs. One strategy for estimating the value of a facility is to compute annual
costs by considering depreciation and interest on the remaining or undepreci-
ated portion. Three factors are necessary for this procedure, including the
replacement cost of the facility, lifespan of the facility, and the rate of interest
that is forgone by investing in a building rather than by making an alternative
investment. The replacement cost of the building represents the amount
required to construct a similar facility. This value was estimated by multiply-
ing the cost per bed by size of the facility. The construction cost per bed at a
minimum security prison in Texas is estimated to be $16,532 (Camp &
Camp, 1998). Multiplying this value by the capacity of the Kyle facility (N =
520) puts the replacement cost of the Kyle facility at $8,596,640. The
replacement cost of the average sized (N = 570) Texas minimum security
prison is $9,423,240.
Depreciation refers to the value of a facility that is consumed in a year.
Essentially, depreciation costs are estimated by determining the life of the
facility and dividing the total replacement cost by the number of years of use.
Although there are prisons in Texas that have been in operation since at least
 Griffith et al. / PRISON COST ANALYSIS 359

the 1930s, we assumed a conservative estimate of a 30-year life span for a

facility. Thus, the depreciation cost of 1 year would be worth 1/30 of the
replacement value of the building. In this study, annual depreciation costs
equals $286,555 for the Kyle facility and $314,108 for an average-sized
minimum security prison in Texas. Depreciation, however, is not the only
cost involved. The undepreciated portion of the facility represents an invest-
ment in resources that could have been used in some other way. By using
those resources to construct the facility, for instance, alternative investment
possibilities and their potential income and services were forgone. These
opportunity costs can be estimated from the rate of return or interest that
could have been earned had the investment been made in another project
(Drummond, 1980). That is, alternative ways of using those resources could
have yielded a financial return that approximates the interest rate multiplied
by the undepreciated portion of the facility investment. Using a 10% interest
rate and assuming a 30-year life of the facility, an average of the combination
of depreciation and interest was estimated to cost $1,754 per parolee for each
group.

COST-EFFECTIVENESS ANALYSIS

Although recent advances in costing methodologies have been made (see

French, Dunlap, Zarkin, McGeary, & McLellan, 1997), cost analysis in the
area of substance abuse treatment is still in its developmental stages. The two
main types of cost analyses are categorized as cost-benefit and cost-
effectiveness. Cost-benefit analyses have been most common, interpreted as
“for each dollar invested, there was a savings (or loss) of X number of dol-
lars.” Although this type of economic analysis has high appeal to policy mak-
ers, there is considerable controversy surrounding the methodologies used
for translating variables into dollars of value. The main difficulty involves
assigning standardized monetary values to certain outcomes (e.g., year of a
human life and mental distress). There is currently no universally accepted
means of valuing indirect costs like these, and this problem has resulted in
inconsistent findings reported across studies.
A cost-effectiveness analysis avoids this by maintaining the metric of the
outcome variable rather than converting it to a monetary value. It also has
advantages over cost-benefit analysis by avoiding assumptions used to derive
benefits (e.g., costs associated with mental distress) that can often be called
into question and have low reliability. In a cost-effectiveness analysis, it is
necessary only to estimate the costs for the numerator (i.e., program costs)
and to select an appropriate outcome for the denominator. Within a trial of
360 THE PRISON JOURNAL / September 1999

two interventions, the incremental cost-effectiveness ratio (ICER) is the

measure used most often to compare the cost-effectiveness of the experimen-
tal treatment relative to the control treatment (Drummond, 1980; Gold,
Siegel, Russell, & Weinstein, 1996). The ICER can be described as the ratio
of the difference in costs to the difference in effects between the two condi-
tions, or

C e −Cc
E e − Ec

where the numerator represents means costs, and the denominator represents
mean effects for the experimental and control conditions, respectively. In the
current study, the cost-effective ratios yielded quotients representing the pro-
gram costs divided by the nonreincarceration rate for each group under con-
sideration. Values represent ratios on a per parolee basis. The interpretation
of the ratio is the amount of money required per person to realize a 1% reduc-
tion in reimprisonment.
Cost-effectiveness analyses typically are followed by sensitivity analyses
when uncertainties in cost estimation arise. They indicate whether the results
depend on the assumptions made to construct the cost-effectiveness model.
More specifically, estimates are generated under different assumptions to see
how the overall cost figures change and if such differences alter the ranking
of alternatives. We wanted to test assumptions about general prison costs,
parole, and interest rate—the most and least expensive Texas prisons were
used as alternative prison costs ($61.36/day and $31.78/day, respectively),
intensive parole was substituted for parole ($5.92/day), and an interest rate of
5% was used. These sensitivity analyses also can provide information on
how to minimize costs and operate more efficiently within a given program.
In addition, 95% bootstrap confidence intervals were estimated using the
bias-correcting percentile method procedures suggested by Campbell and
Torgerson (1999). Nonoverlapping confidence intervals suggest statistical
differences.

RESULTS

The costs of treatment for the groups are presented in Table 1. As

expected, the comparison group, which did not receive in-prison treatment or
aftercare, was considerably less costly than each of the two treatment groups.
However, parolees who did not complete aftercare incurred more costs than
those who did, especially when risk categories were considered. Among
those classified as high-risk, aftercare noncompleters cost $604 more per
 Griffith et al. / PRISON COST ANALYSIS 361

TABLE 1: Total Costs and Nonreincarceration Rate by Group at 3-Year Follow-Up

Risk Level
Group ( N) Low-Risk (n) High-Risk (n)

Costs per parolee ($)

Aftercare completers (169) 21,860 (46) 22,208 (123)
Aftercare noncompleters (122) 23,497 (21) 22,812 (101)
Untreated comparison group (103) 18,402 (45) 17,928 (58)
Percentage not reincarcerated
Aftercare completers (169) 78 (46) 74 (123)
Aftercare noncompleters (122) 48 (21) 34 (101)
Untreated comparison group (103) 71 (45) 48 (58)

person than aftercare completers. An even greater disparity for the low-risk
group was evident, where aftercare noncompleters cost $1,637 more than the
completers. In terms of length of stay while in prison, all groups averaged a
stay of 270 days (the designated length of ITC treatment). For aftercare com-
pleters, the low-risk group spent an average of 98 days in aftercare compared
to 108 days for the high-risk group. For aftercare noncompleters, the low-risk
group spent an average of 153 days in aftercare compared to 142 days for the
high-risk group. These differences were not statistically significant.
The percentages of each of these groups not reincarcerated are presented
in Table 1. Comparison of aftercare completers and untreated comparisons
within risk level showed the aftercare completers had a 7% lower reincar-
ceration rate in the low-risk group and a 26% lower rate in the high-risk
group. The opposite pattern emerged when comparing the aftercare noncom-
pleters and untreated comparison groups. In this comparison, the noncom-
pleters had a 23% higher reimprisonment rate in the low-risk group and a
14% higher rate in the high-risk group.
Four cost-effective models were computed, representing the relative
cost-effectiveness for risk level nested within treatment. The first two models
that were estimated for low-risk parolees are presented in Table 2. The first
model is a comparison of the aftercare completers and untreated comparison
group. The overall cost-effective ratio yielded a value of $494. In other
words, an investment of $494 per inmate reduces reincarceration by 1%. The
95% bootstrap confidence intervals yielded a range of $122. Examination of
the sensitivity analyses revealed that under extreme conditions, the value
could range from $89 to $1,230. In the second comparison between the after-
care noncompleters and untreated comparison group, the value of the overall
ratio is –$222 (a negative ratio indicates that an intervention costs more but is
less effective). In this case, an investment of $222 was related to a 1%
increase in reincarceration. The 95% bootstrap confidence interval yielded a
362 THE PRISON JOURNAL / September 1999

TABLE 2: Cost-Effective (CE) Ratios and Sensitivity Analyses of Aftercare

Completers, Aftercare Noncompleters, and Untreated Comparison
Groups at 3-Year Follow-Up for Low-Risk Probationers
CE Ratio
Aftercare Aftercare
Completer vs. Noncompleter vs.
Model Comparison Comparison

Baseline model 494 –222

$48.50 daily costs at Kyle facility
$50.87 daily costs at average Texas facility
$36.99 daily costs for residential aftercare
$2.98 daily costs for parole
$16,532 replacement cost per bed
30-year life of facility
10% interest rate
Bootstrap lower 95% confidence interval 434 –67
Bootstrap upper 95% confidence interval 556 –313
Sensitivity analyses
$61.36 daily costs most expensive Texas prison 89 –98
$31.78 daily costs least expensive Texas prison 1,230 –446
$5.92 daily cost intensive supervision (parole) 507 –200
5% interest rate 468 –201

$246 range. Sensitivity analyses indicated that the value could range from
–$98 to –$446.
Two models examining high-risk parolees are presented in Table 3. In the
model comparing aftercare completers and the untreated comparison group,
the value of the cost-effectiveness ratio is $165, the amount needed for a 1%
reduction in the reincarceration rate. This ratio is approximately one third the
cost compared to the low-risk group. The 95% bootstrap confidence intervals
yielded a range of $20. Sensitivity analyses ranged from $56 to $363. In the
last comparison between the aftercare noncompleters and untreated com-
parison group, the value of the ratio is –$349. Although slightly better than
reported for the low-risk group, money invested in treatment when not com-
pleted was associated with an increase in reincarceration. The 95% bootstrap
confidence intervals have a $52 range. The value could range from –$146 to
–$717, according to the sensitivity analyses.

DISCUSSION

The completion of in-prison treatment and aftercare is a cost-effective

alternative when compared with incarceration without treatment. These
 Griffith et al. / PRISON COST ANALYSIS 363

TABLE 3: Cost-Effective (CE) Ratios and Sensitivity Analyses of Aftercare

Completers, Aftercare Noncompleters, and Untreated Comparison
Groups at 3-Year Follow-Up for High-Risk Probationers
CE Ratio
Aftercare Aftercare
Completer vs. Noncompleter vs.
Model Comparison Comparison

Baseline model 165 –349

$48.50 daily costs at Kyle facility
$50.87 daily costs at average Texas facility
$36.99 daily costs for residential aftercare
$2.98 daily costs for parole
$16,532 replacement cost per bed
30-year life of facility
10% interest rate
Bootstrap lower 95% confidence interval 155 –321
Bootstrap upper 95% confidence interval 175 –373
Sensitivity analyses
$61.36 daily costs most expensive Texas prison 56 –146
$31.78 daily costs least expensive Texas prison 363 –717
$5.92 daily cost intensive supervision (parole) 185 –331
5% interest rate 157 –330

effects were most pronounced for high-risk parolees. The findings suggest
that approximately $500 was needed to reduce the reincarceration rate by 1%
for low-risk parolees who completed treatment, compared to $165 for high-
risk parolees. This cost differential was in large part a reflection of the higher
reincarceration rate of high-risk offenders in the untreated group. If
untreated, 52% of the high-risk parolees were reincarcerated within 3 years,
versus 29% of those who were low-risk. However, only about one fourth of
the treatment and aftercare completers from each risk group were reincarcer-
ated (26% for high-risk vs. 22% for low-risk), making the proportional gain
much smaller (and more costly) for low-risk parolees. It therefore appears
that intensive services provided to low-risk parolees was not a particularly
good investment of public monies, especially when they failed to complete
treatment. This finding does not suggest that low-risk drug-involved parolees
do not need treatment, but perhaps they could be served more cost-effectively
with lower intensity outpatient services (see Gendreau, Cullen, & Bonta,
1994).
When the aftercare noncompleter groups were compared to untreated
comparison groups, negative values were evident. In effect, the criminal jus-
tice system is not efficiently using scarce treatment resources when beds are
occupied by inmates who do not complete treatment. Application of
364 THE PRISON JOURNAL / September 1999

motivational induction strategies might help offset these negative outcomes

and associated costs by helping the parolee to commit to their recovery
beyond the prison walls and to become invested in community aftercare as a
means for achieving this. Induction interventions are being developed for
drug-involved parolees, and initial findings are encouraging (Blankenship,
Dansereau, & Simpson, in press; Dees, Dansereau, & Simpson, 1999).
Typically, studies of recidivism within criminal justice settings compare
inmates on various characteristics and identify factors associated with out-
comes. The current study not only looked at outcomes but also at costs of
treatment. Treatment for inmates is a timely and expensive intervention, and
the question to be answered remains: Is it cost-effective to offer drug treat-
ment to inmates? The answer depends in large part on the policy perspective
taken. Viewing it from the perspective of criminal justice policy makers, our
findings indicate clearly that high-risk parolees should be targeted for treat-
ment at an intense level of service (ITC plus aftercare). Therefore, to operate
more cost-effectively, attention needs to be given to up-front assessments of
risk and to ways of ensuring that parolees who enter treatment also complete
it. Unfortunately, clinical or predictive tools used to determine which parol-
ees are likely to complete treatment are limited and represent a much-needed
area of investigation (see also Knight, Simpson, & Hiller, 1999 [this issue]).
Prior studies have shown that new interventions applied to correctional
populations can have unintended and adverse consequences for various
offender types. For example, Petersilia and Turner (1993) showed that Inten-
sive Supervision Probation and Parole (ISP) resulted in substantially higher
costs to criminal justice agencies than regular probation did, because ISP led
to greatly increased rates of technical violations (see also Petersilia, Turner, &
Deschenes, 1992). Cost-effectiveness methodologies, therefore, are an
important adjunct to traditional evaluation strategies used for assessing
corrections-based programs, because they can be used to directly compare
both the costs and outcomes of alternative programs for various types of
offenders. More research is needed with other samples, therefore, to replicate
and extend our finding that the intensive treatment is most cost-effective for
high-risk offenders. It also is important to determine what level of service is
cost-effective for low-risk offenders. Using cost-effectiveness analyses, this
can be done by placing low-risk offenders in programs that range from low
(i.e., drug education classes) to high (ITC) intensity, and then determining
which option has the lowest ICER. The program with the lowest price tag that
produces the same reduction in reincarceration would be the preferred choice
for a particular category of offenders, if the total costs of the intervention fit
within budgetary constraints. Repeated use of this type of evaluation design
 Griffith et al. / PRISON COST ANALYSIS 365

should lead to more efficient resource allocation within criminal justice sys-
tems by matching offender subtypes to appropriate levels of treatment while
minimizing unintended consequences like those found in the Petersilia and
Turner (1993) study. In addition, evaluations examining sufficiently long
time periods of up to 3 years after prison release are warranted to determine
the stability of the cost-effectiveness estimates.
Therefore, policy makers have to be well informed on issues including the
cost-effectiveness of drug treatment programs in correctional settings to allo-
cate public funds to the best alternatives. It is important that program costs,
parolee attributes, and outcomes be considered in conducting these studies to
better inform these decisions. Toward that end, this study identified two
important factors associated with increasing the cost-effectiveness of
corrections-based treatment. First, it is a better investment to treat inmates
with drug-related problems who are classified as high-risk for recidivism.
Less intense services may be adequate and more efficient for lower risk
parolees. Second, residential aftercare following prison-based treatment is
critical for optimizing these resources and achieving positive outcomes. This
emphasizes the need for ways to select and engage offenders in corrections-
based treatment settings.

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