Cost benefit analysis of a new inpatient AOD rehabilitation centre in Bundaberg – Lives Lived Well

Project Info


  • Lives Lived Well

Client Type

  • Service provider

Financial Year

  • 2021-2022

Health Areas

  • Drug and alcohol
  • Mental health

Service Provided

  • Costing


  • Queensland

LLW is a not-for-profit organisation, with over 40 years of experience working to assist people impacted by drugs, alcohol and mental health issues. LLW operates 836 centres across Queensland and seven centres across New South Wales that offer a number of support services, including (but not limited to) residential rehabilitation, inpatient detox and rehabilitation day programs.

LLW engaged HMA to undertake a cost-benefit analysis (CBA) to support a grant submission to run a new residential AOD service in Bundaberg, Queensland. The new facility would provide a treatment option for people faced with AOD issues and target those who have exhausted other treatment options, such as regular appointments with a specialist counsellor or those who require more intensive treatment. The program would provide 24-hour supervised support as well as a range of treatments including therapeutic treatment programs, individual and group counselling, detox, withdrawal support, after care and discharge planning. As part of the analysis, HMA calculated the economic costs and benefits associated with a new residential rehabilitation facility including:

  • reduction in hospitalisations
  • increased patient contribution to the economy
  • reduced drug related crime
  • prevented cost of children in out-of-home care
  • reduced family support and counselling
  • reduced homelessness
  • reduced illicit drug deaths
  • construction, and
  • employment of centre staff.

HMA’s analysis included:

  • Calculation of a net present value (NPV) for the proposed new service to establish its viability as an investment. This required determining the costs and monetising societal benefits over a 20-year timeframe to understand the value of the service.
  • Development of a benefit to cost ratio (BCR) to provide the expected return on investment (ROI) for the new service.

This project commenced in November 2021 and was completed in January 2022.