The Effect of the Drug Medi-Cal Organized Delivery System 1115 Demonstration Waiver on Substance Use Disorder Treatment Access: Evidence from California

Background: In August 2015, the California Department of Health Care Services created the Drug Medi-Cal Organized Delivery System 1115 demonstration waiver (DMC-ODS waiver) to improve service delivery to Medi-Cal-eligible individuals with a substance use disorder (SUD). We examine if implementing the DMC-ODS waiver across California counties improved patient access to SUD treatment services. Methods: We use administrative data from 2016 to 2020 from a reporting system for all publicly-funded SUD treatment services delivered in California and employ difference-in-differences and event study empirical strategies exploiting the differential timing of DMC-ODS waiver adoption across counties. Results: Event study analyses show that eleven or more months after the introduction of the DMC-ODS waiver, the number of unique patient admissions significantly increase by nearly 20%. Residential treatment admissions significantly increase by roughly 25% in all months post-waiver introduction. Conclusions: This study provides valuable information for policymakers about implementing 1115 waivers, and the important public health implications. California's DMC-ODS waiver has demonstrated that 1115 waivers similar to it can likely increase access to SUD treatment.