The reason almost all health insurance companies have stopped paying for residential addiction treatment is that the effectiveness of residential treatment and outpatient treatment has been compared many times, with no advantage being found for residential treatment. The July, 1986, issue of the American Psychologist contains the definitive article (by Miller & Hester) on this subject. Their article “reviews findings from 26 controlled studies, which have consistently shown no overall advantage for residential over nonresidential settings.” You might question whether a 1986 article would still be relevant this many years later. However, more recent evidence has not led to a different conclusion.
Yet residential treatment continues to be popular, if judged by the number of stories in the press about celebrities “going to rehab.” Miller and Hester suggest, however, that “it is recommended that 3rd-party reimbursement policy should (1) discourage the use of intensive residential models for addressing alcohol abuse when more cost-effective alternatives are available and (2) reinforce the use of research-supported treatment methods regardless of setting. It is noted that such policy priorities run directly counter to the current practices and financial interests of many for-profit providers.”
Miller and Hester clarify that even though residential treatment works no better than outpatient for clients who can afford it, for clients who cannot afford residential treatment (e.g., they are homeless), it is often better than outpatient. For this population residential treatment may provide the stability otherwise lacking in their lives.
Residential treatment may be useful if 1) someone has attempted to make change and cannot seem to maintain it in their normal environment and 2) this individual freely chooses to attend residential treatment. However, even if the individual will be returning to a different environment upon discharge from residential treatment, outpatient treatment will still be needed. Anyone can abstain in a residential treatment facility. Being there only postpones dealing with the real problem, which is how to live (and abstain) in the real world.
Consequently, unless it is obvious that getting the addicted individual into a secure environment needs to happen immediately, start with outpatient treatment. If residential treatment does occur, a 28 day or 30 day stay may not be needed. Unfortunately, most facilities are not flexible about length of stay. On the other hand, if one or several month-long stays have not worked, 90 days or more may be worth considering.
There are many benefits to outpatient treatment. It is the treatment of choice for most individuals. There is no problem about what happens when the individual returns home. Outpatient treatment is often much less expensive (especially considering that your insurance mayily response can be that as long as there is (progress, abstinence, successful moderation, etc.), the family will not insist on residential treatment.