What three years of claims data taught us about substance use care

As clinicians, we rarely see loss of control over substance use as a stand alone problem. The suffering of those with substance use disorders extends to mental and physical health difficulties, and the insight into that connection is often the catalyst that brings them into care. The most rewarding aspect of our work in substance use care is guiding our members as they reduce their alcohol and drug use, regain stability, and start managing their health in ways that feel realistic and sustainable. Yet to communicate the value of these changes to organizations, we need evidence that provides objective validation of our clinical observations. 

That’s why we partnered with Aon to conduct an independent actuarial analysis of Pelago’s impact on medical costs. They set out to replicate Pelago’s previously published, peer-reviewed study and test whether the results would remain consistent outside of Pelago’s own analysis. Aon also went further, examining questions that employers and health plans often care about: what happens with the highest-cost members? What about people managing multiple chronic conditions?

Aon analyzed three years of medical claims data for 1,132 Pelago participants, comparing them to a carefully matched control group from a multi-employer database of health plans. The matching was rigorous, participants and controls were aligned on geography, demographics, and medical comorbidities, so we could be confident we were comparing like to like. Pelago participants experienced a statistically significant lower cost trend of $11,829 per member per year, with a return on investment exceeding 5 to 1. 

 

The connection between substance use care and overall health costs

The people we treat at Pelago are often managing multiple chronic conditions. And in understanding the epidemiological data on substance use and co-occurring disorders, this makes sense — nearly half of those with a psychiatric disorder also have a substance use disorder, and over 80% of inpatient stays for a mental health or substance use disorder involve a comorbid physical health condition, including cardiovascular illness, MSK disorders, and cancer. Substance use both drives and is driven by overlapping physical and mental health disorders, creating a cycle that’s very difficult to interrupt with fragmented care. 

The present study showed that comprehensive treatment can break that cycle. Participants with three or more comorbidities experienced nearly $12,900 in cost reductions compared to controls. Across specific conditions, the reductions were statistically significant: $19,000 for musculoskeletal disorders, $44,000 for cardiovascular conditions, and $29,000 for diabetes.

What’s notable is that these aren’t substance use specific claims, it’s total medical spend going down, which tells us something really important about what happens when you address substance use at the center of someone’s health picture. 

Most people who need substance use treatment don’t receive it, often because the systems available to them aren’t designed to meet them where they are. Pelago’s care model was built to close those gaps — continuous rather than episodic, flexible and virtual to support access and engagement, and grounded in evidence-based approaches like cognitive behavioral therapy and contingency management that adapt to each member’s goals. When substance use becomes more manageable, downstream care often becomes more stable. The Aon analysis helps quantify that connection, and the comorbidity data in particular reflects what we’d expect to see when a comprehensive care model is working the way it should.

The data on highest-cost members

Benefits leaders often ask me about their highest-cost populations. How does receiving substance use care impact individuals with the top cost driving conditions, such as cardiovascular disease, diabetes, and MSK disorders? While studies show clearly that individuals with substance use disorders have poor adherence to medication regimens for managing both physical and mental health conditions, to date, few studies have examined how successfully treating a substance use disorder can change the costs associated with improvements in other health behaviors. The current study evaluated this question, and found that the top 10% of spenders who participated in Pelago showed $88,000 in greater cost reductions per member compared to controls over 12 months. What this suggests is that untreated substance use is often an underlying driver of high health service utilization, and that treating it can be one of the most effective levers for reducing costs in this population.

 

How the study was conducted 

Aon used their Cost Efficiency Measurement methodology, which matches at the individual member level across demographics, geography, and the full spectrum of diagnosed conditions. Aon has used this same methodology to evaluate a range of digital health programs, including mental health, navigation, and condition-specific solutions. But this is the first evaluation of specialty substance use care. The difference-in-differences approach, which compares cost trends over time between participants and matched controls, is one of the more reliable ways to isolate the effect of an intervention from broader market trends. It’s the kind of evidence I feel confident standing behind, and it validates what our own peer-reviewed research has shown: that a treatment model combining therapy, medication, cognitive behavioral therapy, contingency management, peer support, and care coordination produces measurable, sustained results.

One detail in the methodology that I think is worth highlighting: Aon examined medical costs in six-month blocks before participants started with Pelago, and found that the costs were already escalating in the six months leading up to engagement. The control group didn’t show that same increase. This likely reflects what research often observes, people tend to seek treatment during or shortly after a period of crisis, when healthcare utilization is already climbing. The fact that Pelago participants reversed that trajectory, and that the savings were measured from an already elevated baseline, makes the results even more meaningful. 

48 million people in the U.S. have a substance use disorder and most go without treatment. We know from clinical research that effective treatment changes lives, and we now have independent actuarial data showing that it changes the cost trajectory across a person’s entire health profile too. For employers and health plans weighing where to invest, this data makes the case for substance use care clear. It’s one of the most impactful ways to improve health outcomes and reduce costs for the people who need the most support.