EVALUATION and PROGRAM PLANNING

Evaluation and Programming Planning 2 I ( 1998) 227-236

The costs of an enhanced employee assistance program (EAP) intervention

Michael T. French”.*, Laura J. Dunlap”, Gary A. Zarkinb, Georgia T. Karuntzo&’

Abstract

The purpose of this paper is to estimate the economic costs of an enhanced Employee Assistance Program (EAP) intervention being delivered through a large Midwestern EAP that services over 90 worksites. Resource use and cost estimates are determined

for both developmental and implementation activities. In addition, enhanced services costs are compared with total and average

costs of standard EAP services. The results show that total developmental costs were S44.000 and implementation costs for the first year of the intervention were $140.000. The annual cost per eligible employee for standard EAP services is $12.93 and the incremental annual cost per eligible employee for enhanced services is $5.01 under full implementation. These findings provide benchmark cost estimates for other EAPs that may be considering offering enhanced services. In future work. cost estimates will be combined with intervention outcomes for additional program evaluation. (’ 1998 Elsevier Science Ltd. All rights reset-Led.

Kq~,wort/.t: Economic costs; Employee assistance program (EAP): Intervention

1. Introduction

Recent national worksite surveys have shown that

Employee Assistance Programs (EAPs) are gaining

acceptance and popularity in many companies. In 1993. approximately 33% of all worksites with 50 or more full-

time employees had such programs (Hartwell et al., 1996). By 1995. overall EAP prevalence had grown to 39% of

worksites with 50 or more full-time employees (Hartwell et al., 1995). It is not clear how contemporary EAPs will

fare with the advent of managed care and cost reduction

strategies in the delivery of health care. However, anec-

dotal information suggests they may actually enter alliances and partnerships with managed care organ-

izations. which will probably increase their importance. Given the recent popularity and importance of EAPs

in contemporary worksites, we designed an ambitious project to develop, implement and evaluate an enhanced EAP protocol currently being delivered through a large

external EAP in Rockford. Illinois, U.S.A.. This 5-year Rockford Employee Assistance Program (REAP) project is being funded through a grant to the Research Triangle

*Corresponding author: Michael T. French. University of Miami.

1400 NW 10th Avenue. Suite 1105, Miami, Florida 33136. Tel.:

(305)243-3400: e-mall: mfrenchw mednet.med.miami.edu

SOl4Y-7189’98 $19.00 (’ IYYX Elsevier Science Ltd. All rights reserved

PI1:SOl3Y 7l8Y(Yx)Oool3 5

lnstitute (RTI) by the National Institute on Alcohol Abuse and Alcoholism (Grant No. R01 AA 103 18). The

enhanced protocol has two main objectives deliver comprehensive outreach activities to better reach under-

served populations (i.e. women and ethnic minorities)

and develop more effective service delivery for all EAP clients. The primary goal of this paper is to estimate and

report the economic costs of the enhanced EAP services. We present actual cost estimates for the developmental

and implementation components of the enhanced EAP

protocol. In addition. we present cost estimates for stan- dard EAP services. The concluding section of the paper

summarizes the significance of our findings. how existing

EAPs can use this information. and future research prod- ucts.

2. REAPS research design

To implement our intervention we chose a large EAP

located in Rockford. Illinois. U.S.A. This EAP provides a variety of services including assessment, intervention. crisis management, short-term counseling and referral for employees and their families at over 90 companies. In addition, the EAP also provides training and ongoing support for companies’ supervisors to help them with troubled employees. We chose this EAP because it was

228 M.T. Frmcir et al./Et~aluafion ad Program Planning 21 (199X] 227-236

already delivering a comprehensive array of services to meet the needs of a diverse workforce. We believed that implementing our enhanced protocol would be easier if

we built upon existing services that are well received by

member companies. To evaluate the costs and outcomes of our enhanced

services, we are implementing the protocol at two work-

sites that were receiving standard EAP services prior to our intervention implementation. Worksite 1 began receiving enhanced EAP services in April 1995 and Work-

site 2 began receiving enhanced EAP services in Sep-

tember 1996.*

As part of the research design, we are gathering infor- mation on EAP utilization, treatment assessment and

referral, treatment outcomes. and costs of services for the

year prior to our intervention and the year following the

intervention’s implementation. This article presents the results of our initial analysis comparing enhanced services

costs with the costs of providing standard services. Our

analysis perspective is the EAP. Costs incurred by the worksites, by individuals utilizing the EAP, or by third party payers are not considered.

3. Description of standard EAP services

The EAP’s standard services include counseling for

chemical dependency, marital/family problems, legal and

financial services and mental health problems. These

counseling services include evaluation and treatment referral, short-term counseling from EAP staff if appro-

priate and treatment planning and monitoring. In addition, the EAP offers several non-counseling services

such as supervisory consultation and training, employee outreach seminars and EAP orientations. The majority

of the clinical staffs time is spent on counseling services. However, the non-counseling services offered are also

important. These services help worksites with employee referrals to the EAP and help educate employees about

the services that are available to them. Under the standard EAP contract the EAP offers

supervisory training sessions at each worksite, employee orientations and three optional outreach seminars. The supervisory training sessions last approximately 3 hours

and are designed to train supervisors to recognize work- related behaviors or incidents that may lead to an EAP

referral for an employee, to provide guidance on docu- menting these behaviors or incidents and to inform super- visors about the appropriate procedures to follow when making an employee referral to the EAP.

The EAP’s outreach seminars serve to educate employees on issues relevant to their own work environ-

* Worksite 1 has been receiving standard EAP services for over Y

years and Worksite 2 began receiving standard services in January,

1995.

ment and to further promote the availability of EAP services. Seminar topics include substance abuse, family

issues, stress management, domestic and workplace viol- ence and other issues that may impact work performance.

Outreach seminars are scheduled at the discretion of man-

agement at the worksites and usually coincide with a

specific need. For an additional fee, companies can get a package that includes up to 12 workshops per year. The workshops range anywhere from 30 min to 2 hours, with

an average length of 1 hour. The EAP’s employee orientations are designed to

inform employees of the EAP services that are available

to them. Orientation sessions are usually conducted at the worksite and last approximately 30 min. These orien-

tations typically occur once every four years at the dis-

cretion of worksite management. Many worksites now provide information about EAP services as part of a ‘new

employee’ orientation package. The EAP also distributes

materials such as posters and newsletters to employees at their worksites. Some of these materials are displayed throughout the worksite while other materials are dis- tributed directly to the employees.

4. Description of enhanced EAP Services

Our review of the EAP’s standard package revealed

gaps in the services that were available for women and racial/ethnic minorities. Specifically, we found nine

service areas that could be enhanced. To address these

service gaps, we designed an enhanced protocol that

builds upon standard services already offered by the EAP. Thus, women and minorities could benefit significantly from the enhanced services, but all employees stand to

gain. The enhanced services are described later (see

Karuntzos, et al., 1998; for a more complete description

of the enhanced service protocol). The most significant gap in EAP services was the lack

of expertise among the EAP’s counselors regarding issues specific to women and racial/ethnic minorities. Prior to

our study, the EAP did not employ counselors that specialized in gender, family, or cultural issues. As part

of the enhanced protocol, the EAP hired two new coun- selors-an AfricanAmerican man with expertise in min- ority issues and a Caucasian woman with expertise in

women’s issues. The objective for hiring these specialized counselors was to provide a more diverse staff and to increase the knowledge and expertise of the current EAP staff with respect to providing services to minorities. The specialized counselors are available at the EAP should any client request counselors with specific expertise on these issues, or prefer to meet with a female or African American counselor. In addition, the specialized coun- selors trained the other EAP counselors and shared their expertise so that the entire staff is now better informed about issues pertaining to women and ethnic minorities.

Another gap found in EAP services was the failure of

the counselors to systematically utilize a standardized

assessment for alcohol. drugs, or mental health needs. Some counselors used screening instruments as part of the assessment process, while others relied solely on their clinical judgement and training. As part of the enhanced services. a standardized alcohol screener is now admin-

istered to all individuals coming to the EAP. The EAP clinical stafT selected the Alcohol Use Disorders Identi-

fication Test (AUDIT) (Fleming et al., 1997) as the scre-

ening instrument because it includes questions that are

more likely to detect alcohol misuse among women com- pared to other popular instruments and the language is more sensitive to minorities in general.

A key component of standard EAP services is super-

visory training at each worksite. However, our review

of this training curriculum revealed that the standard

workshops did not adequately address issues specific to women and minorities. As part of the enhanced protocol.

we augmented the training to include specific information and handouts pertaining to women and racial/ethnic min- orities. such as workplace problem symptoms that are

more common for female workers and cultural issues to be aware of when confronting a problem employee. The

supervisor training enhancements increase the training session by I h-- -to a total of 4 h.

Coupled with the short-term counseling provided by

the EAP. many of the clients receive additional treatment services from other community treatment facilities

through an EAP referral. Our evaluation of the standard

services revealed that the EAP’s referral network included few providers that specialized in, or were sensitive to, minority needs. As part of the enhanced protocol. the

EAP staff‘ is developing further ties with community resources that specialire in these needs. such as alcohol-

ism groups for Hispanics, African-Americans and

women and community centers that service minorities. Furthermore. the EAP has developed a Community

Resource Directory that catalogues and indexes all the community services and resources used by the staff to

more efficiently refer clients to appropriate agencies. The

EAP has also developed an Advisory Committee for each

worksite that serves as a vehicle to keep the workplace informed of important EAP activities and to provide the

EAP with information about the needs of the worksite employees.

A popular feature of standard EAP services is outreach seminars. As part of the enhanced protocol, additional seminars with topics related specifically to women’s

concerns (e.g. women’s health issues) and racial/ethnic minority concerns (e.g. perceptions of minority males! females) have been added to those already offered. Additional seminars specific to drug and alcohol use and abuse have also been added.

We also enhanced the EAP’s employee orientation sessions by adding topics specific to women and other

minorities such as child care issues, family relationships,

and domestic violence. Furthermore, at least one of the

counselors present at each session is knowledgeable about

gender and minority issues.

In addition to enhancements in seminars, training and counseling, we revised the outreach materials (e.g. post- ers, brochures) that the EAP distributes to worksites to include information about the improved services for

women and minorities. Lastly, we discovered that the EAP did not have any formal arrangements with

interpreters for non-English speaking clients. As part of

the enhanced protocol, formal arrangements have been

established with community agencies so that interpreters are nou available to assist EAP counselors uith non- English speaking clients during counseling sessions and

during outreach activities at the worksites.

5. Methods

The primary goal of this analysis is to estimate the economic costs (i.e. the full market value) of resources used in providing enhanced EAP services (French et al..

1995; Gold et al.. 1996). Calculating and reporting econ-

omic costs provides a standard measure of the value of EAP services because it considers all resources used in

service provision regardless of whether every resource

was fully paid for out-of-pocket by the EAP. If the EAP utilizes free or subsidized resources, then the economic

costs should exceed the actual expenditures by the differ-

ence between the market value of the resources and the amount actually paid (French et al.. 1996a: Dunlap and French. In Press).

For readers who may be unfamiliar with the oppor-

tunity cost method of cost estimation, the method is

very similar to the accrual approach 10 costing that is sometimes used in a financial appraisal. As noted by

Zelman (I 987). the cash basis approach to cost account- ing will always equate costs to cash flows. Nhereas the accrual approach is based on resource use rather than

expenditures. As a result. the accrual approach includes

the value of unpaid resources such as volunteers. in-

kind goods and donated buildings. There seems to be a consensus among cost accountants that the accrual method of unit costing enhances consistency and it tends

to be a better gauge of operational efticiency (Zelman, 1987). In this regard. accountants and economists have

similar paradigms. Regarding the calculation of unit costs. WC relied pri-

marily on broader measures of service delivery such as the number of employees who received any service and the total number of service hours across all clients. However. we recognize that not all EAP clients receive the same type or amount of EAP services. An alternative to our approach is to estimate the cost per category of client based on some criteria such as diagnosis or service

230 M. T. French et al.iEvaluation and Program Pluming 21 (199X) 227-236

consumption grouping (Ryan et al., 1994, 1997). We

intend to explore these alternatives in future analyses of the enhanced EAP intervention.

5.1. Estimatb?g standard EAP costs

The first objective of our cost study is to estimate the

cost of standard EAP services for comparison with the

cost of enhanced services. We gathered most of the resource use and cost information for standard EAP ser-

vices using a modified version of the Drug Abuse Treat-

ment Cost Analysis Program (DATCAP), a structured instrument that has been used in several economic cost

analyses of drug treatment programs (French et al., 1994,

1996a, 1997; Dunlap and French, In Press; French and McGeary, 1997). Earlier versions of DATCAP have also

been used in cost analyses of EAPs (Bray, et al. 1996). The DATCAP gathers information on client caseload

and the average length of EAP client visits or telephone contact. It also assembles resource use and expenditure

information in six broad categories-labor, contracted

services, building space, equipment, materials/supplies, and miscellaneous. For each of the resource categories

we asked the EAP staff to provide information on

resource use and expenditures during fiscal year 1994 (i.e.

the year before the implementation of our protocol at the first worksite) and to estimate the market value of resources that were subsidized or used free of charge. The

EAP staff obtained the information from expenditure reports and activity diaries. We used this information to

estimate the economic costs of standard EAP services

prior to the implementation of our enhanced service pro-

tocol. Equation 1 shows the cost components of providing

standard EAP services. Because we are estimating the

economic (opportunity) costs of providing standard ser- vices, the cost categories presented here should include

the actual expenses paid by the EAP plus the additional

fair market value of any free or subsidized resources they

received. However, because the EAP did not receive any free or subsidized resources for either standard OI enhanced services, we can rely solely on expenditure reports for our cost calculations. As shown, the total

costs of providing standard EAP services (C&) includes

the value of labor (c), contracted services (Q;,), materials

(Cl,,), equipment (C,), building space (C,) and mis- cellaneous resources (C&,,).

Ccap = ~+~,+~+++c”,+~,,, (1)

Labor costs include the salaries and fringe benefits of all EAP personnel. Contracted service costs include the fees paid for any contracted labor or services that are used by the EAP. Building costs include rent, mortgages, or another measure of fair market value (e.g. estimate by an experienced real estate agent for comparable property

in the area) for the space used by the EAP. Materials and supplies include the EAP’s expenditures on utilities, phone, taxes, insurance, publications, printing and

duplicating, security, and general office supplies. Mis- cellaneous costs include expenditures on staff training

and travel, repair and maintenance, minor equipment

(value less than $500) and any other resources not included in the other categories.

The equipment category includes the apportioned value of equipment newly purchased and equipment alre-

ady on-hand. Capital outlays for equipment are

apportioned over the equipment’s service life using the

method suggested in Drummond (1991) which converts

initial capital outlays to an annual cost. This method reflects not only the actual expenses, but also the fact

that people are not indifferent to the timing of resource

outlays and would prefer to postpone costs. For example, a vehicle that was purchased for $10,000 in 1991 with a useful service life of 10 years would have an economic cost in 1995 of $1,295-the discounted amount in the

fifth year of service life.

5.2. Estimatirzg REAPS costs

To estimate the incremental costs of the intervention,

we divided the protocol into two distinct segments-- developmental and implementation. The intervention’s

developmental period corresponds to the 6 months pre- ceding the protocol’s initial implementation. This 6-

month period was from October, 1994 through March, 1995. Protocol implementation began at the first worksite

in April, 1995. For this article, we are analyzing total

developmental costs and the implementation costs for the first full year of the intervention--April, 1995 through

March, 1996.

5.3. Decelopment costs

Equation 2 shows the cost components used in the

development of the enhanced service intervention (C&J. Developmental activities include such things as the time spent selecting an assessment instrument that is better suited for women and racial/ethnic minorities; gathering

information specific to their concerns and incorporating

these concerns into EAP orientations. supervisor train- ing, and outreach seminars; and developing program top- ics for the outreach seminars that address problems they face.

c:‘,, = c: + c,“, + c”, + C,” + c;l+ c:‘,,,, (2)

As shown in Equation (2) the total costs of developing enhanced EAP services include the value of labor (C$ contracted services (C:‘,), materials (Ci,), equipment (Cz). building space (C”,,), and miscellaneous resources (Ci,,,,).

Labor costs include the value of the time spent by the

EAP staff on developing the enhanced protocol including

any time spent in related training activities. Specifically,

this includes a portion of the salary and fringe benefits of the two specialized counselors (Ctc), EAP director (C:;,,) and one clerical person (Cy,,,). The full compensation for

these individuals is multiplied by the percentage of time they spent on developmental activities rather than coun- seling or other non-developmental activities. In addition, labor costs include the value of the time the other coun-

selors and support persons contributed to in-house train-

ing specitically related to the enhanced services protocol

L\ ’ _I

where Mu, is the rate of pay for individual .Y and tt is the amount of time that individual s contributed to inter-

vention de\,clopment. Thus. the full cost of labor related

to developmental activities can be summarized by Equa- tion (Xi):

C’;l = c:: + c,:j,, + c‘:l,,,+ i i IV, * r:‘, (2a) ,- I

We estimated the time spent by the specialized coun- selors on developmental activities as their total work time

less any time spent counseling. During the developmental period, counseling services were still ‘standard’, and

therefore we assumed that any counseling conducted by

the specialized counselors was not part of the enhanced service protocol’s development. Given these assumptions, we estimated that the counselor specializing in racial:’ ethnic minority issues spent about 30% of his time

(approximately 3 15 h) developing the protocol during the

6-month developmental period. We estimated that the

counselor specializing in women’s issues spent about 50% of her time (approximately 525 h) developing the proto-

col. In addition to the specialized counselors, we esti- mated that the EAP director spent about 15% of his time

(approximately 149 h) on developmental activities. We

also estimated that clerical staff spent approximately 240 h helping with the development of the enhanced protocol.

We developed a cost algorithm similar to Equations 1 and 2 that describes the resources used in implementing

the enhanced service protocol. Implementing the pro- tocol includes activities such as using the AUDIT alcohol screener at intake. offering ‘enhanced’ counseling services. conducting enhanced outreach seminars and supervisor training, distributing enhanced outreach materials. on-going training of the other counselors by the specialized counselors and updating the database of

community agencies whose services are especially rel-

evant for women and ethnic minorities.

Equation 3 shows the cost components of implement- ing our enhanced service protocol.

c:.,,, = c; + c:, + c:, + c’:. + C’;, + C’: ,,,, i (3)

Equation (?a) summarizes the full cost of labor related to implementation activities during year 1 with all resource categories defined the same as previously.

c; = c:,+c:,,,+c:,,,.+ i i ct’,*f,‘) (3a) \ -- I

We estimated that the specialized counselor with expertise in ethnic minority issues spent 100°/o of his time

(20X0 h) on enhancement activities. We estimated that the specialized counselor with expertise in women’s issues

spent approximately 90% of her time (1872 h) on enhancement activities because she had a few additional

duties that were unrelated to our protocol. In addition.

we estimated that the EAP director spent approximately 15Y/o of his time (about 3 I2 h) on enhancement activities.

The implementation also required approximately 480 h of clerical support.

6. Results

Table I presents the economic costs of providing stan- dard services to over 90 worksites in 1994 (in 1996

dollars). As shown in Table 1. the total annual economic cost of standard EAP serbices was $435,399. Personnel accounted for about 82O/u of the total costs. indicating

that EAP services are highly labor intensive. Personnel costs include the salaries and benefits ofthe EAP director.

five counselors. a secretary, a receptionist and a mar-

keting person. Contracted services totaled S23,037 and accounted for about 5% of the total annual costs. These

services included consultation with a medical director and fees to other professionals (e.g.. interpreters and psy-

chiatrists). The EAP’s contracted personnel further

emphasize the labor intensity of providing EAP services. Combining personnel costs and contracted labor costs, we find that labor accounted for about X7’%, of the total costs of providing standard EAP services. The EAP did

not use any other contracted services and as noted earlier. the EAP did not receive any free or subsidized resources.

Building expenses in 1994 were $23.423 (in 1996 dol-

lars) and accounted for about 5’%, of the total annual costs. These expenses included the monthly rent for approximately I300 ft’ of office space. Material and sup- ply expenses were S25,104 and accounted for almost 6% of the total annual costs. These expenses included elec- tricity. telephones. printing and duplicating, publi- cations. office supplies. and other miscellaneous

232 M.T. Fwnch rt al.lE~~aluation and Program Planning 21 (1998) 227-236

Table 1 Annual economic costs of standard EAP services in fiscal year 1994 (pre-intervention)”

_

Percentage of Cost per client Cost per service Cost per ehgible Cost category Annual cost annual cost servedh hour’ employee”

S % S S $ _

Personnel 356,514 0.8188 402.39 96.12 18.76

Contracted services 23.037 0.0529 26.00 6.21 1.21 Materials and supplies 253,104 0.0577 28.34 6.77 1.32

Building 23.423 0.0538 26.43 6.31 I .23 Equipment 2.669 0.006 I 3.01 0.72 0.14 Miscellaneous 4.652 0.0107 5.26 1.26 0.24

Total annual cost 435,399 I .oooo 49 1.42 1 17.39 22.92

“Amounts shown are in 1996 dollars. h In fiscal year 1994, the EAP served 886 clients. ‘In fiscal year 1994. the EAP provided 3709 service hours.

” In fiscal year 1994, 18,998 employees were eligible for EAP services.

materials. Equipment expenses of $2,669 accounted for

less than I % of the total annual costs and included the

prorated value of equipment newly purchased or already

on-hand. Much of the equipment used by the EAP is

mostly or fully depreciated because the age is greater than

the normal service life. Finally, miscellaneous resources

totaled $4,652, which accounted for only I % of the total costs for providing standard EAP services. These

resource costs included the value of statr training and

travel, repair and maintenance and minor equipment (i.e.

value less than $500). Estimates of total program cost are informative, but

unit costs are more useful for program evaluation and

decision making purposes. Unit cost data are often diflicult to collect and analyze, however, due to defi-

nitional problems, operational problems and utilization

problems (Zelman, 1987). As noted earlier, we estimate

the economic costs of EAP services, which is similar to

the accrual method of cost accounting. Defining units of service to use in the denominator of the unit cost

calculations is subject to the objectives of the analysis

and evaluator preference (Ryan et al., 1994; Ryan et al.,

1997). Since we have data on service contacts and total

contact time, we decided to use several broad measures of service units such as number of eligible employees,

number of employees who received any service(s) and

total number of contact hours delivered. Table 1 presents the annual cost per client served, the

annual cost per service unit (i.e., service hour) and the annual cost per eligible employee. In 1994, 18,998 employees were eligible for services at the EAP. The EAP actually served 886 clients and provided 3709 service hours. As shown in Table 1, the annual cost per client served was $491.42, the annual cost per service hour was

$117.39 and the annual cost per $22.92.

6.2. REAPS dewlopment costs

eligible employee was

Table 2 presents the costs of developing the enhanced service protocol. The value of the time of the specialized counselors, the EAP director and the clerical staff totaled $34,693 (in 1996 dollars) and accounted for 79% of the

total developmental costs. The EAP staff also contracted

with a psychiatrist for consulting on the development of

the enhanced service protocol. This consultant was under contract with the EAP prior to the protocol development,

but we estimated that the EAP paid $482 for consulting related to the protocol’s development. Contracted ser-

vices were limited to psychiatric consulting and

Table 2

Economic costs of developing enhanced EAP services (IO: I :94- 3:3 I;‘95

Cost category

Development

cost” ($)

Percentage of

total development

cost“

Personnel 34.693 0.7Y

Contracted services 482 0.0 I Materials and supplies 1,421 0.03 Building 681 0.02

Equipment 6.016 0.14 Miscellaneous 705 0.02

Total development cost 43.YY8 1.00

“Amounts shown are in 1996 dollars

h Total may not total I .OO due to rounding

accounted for approximately 1% of the total costs of

the protocol development. Overall, labor costs including

consultant fees totaled $35,175 and accounted for about

80% of the total costs of development. The other resources used in developing the enhanced

service protocol include the building space occupied by the specialized counselors. the purchase of equipment

and materials needed for protocol development and the costs of any related external training and travel by the EAP staff. We estimated that the building space used by

the specialized counselors was 203 ft’ and the EAP paid

a fair-market monthly rent of SI .36 per ft’. Because the

specialized counselors devoted only a portion of their

time (from 30~70”/0) to developmental activities. we attri- buted only that portion of the additional space occupied

by the specialized counselors to the costs of the protocol’s development. For example, one of the specialized coun-

selors spent 50% of her time on development activities. Therefore, we attributed the value of 50% of her office

space to the total costs of developing the protocol. The

cost of building space attributed to the protocol’s devel- opment was $681 (in 1996 dollars). This was about 1.5% of the total costs of the protocols development.

The materials purchased by the EAP included new

brochures, posters, materials for new supervisor training

manuals. and a flipchart tripod. The cost of these

materials was $1,421. Miscellaneous costs include staff

training fees, local travel, equipment repairs, and minor equipment purchases (less than $500). The labor time for traveling and attending training sessions is included in

the personnel category. During the development of the protocol. some EAP staff attended external training ses- sions pertaining to cultural issues. In addition. there was

some local travel to these sessions and to the worksites.

The total cost of miscellaneous resources was $705 and

accounted for almost -?O/O of the total costs. Finally, the

EAP purchased computers for its specialized counselors as part of the development of the enhanced services pro-

tocol. The cost of these computers was $6.016 and accounted for 14%) of the total development costs. Over-

all. resources other than labor accounted for approxi- mately 31% of the total costs of’ developing the enhanced

service protocol.

6.3. REAPS irnl,l~~nl~~ntrrtiorl co.cts

Table 3 presents the total cost for the first year

implementation of the enhanced protocol $140.161~

Table 3 Economic costs of implementing enhanced EAP services

First year Implcmcntation costs (4 I 95 3’31’96)

Cost categoq Annual cost ($)

Personnel” I28.6Y2

Contracted ser\~cc~ 1 YO2 -.

Materials 3.797

Building j 2 3 ‘1 Eqmpmcnt 0

M~sccllaneous I .5? I

Percentage 01

annual cost

0.92

0.02

0.03

0.02 0.00

0.01

Cost per client

servedh ($)

237.Yh

5.59

7.3’

6.24

0.00

2.Y5

Cost per service

hour’ (S)

30.76

0.69

0 91

0.77

0.00

0.37

Cost per eligible

employee” (Ij)

13.61

0.33

0.43

0.37

0.00

0 17

Total annual co>1 I40.16 I I .oo 270.06 33.50 15.91

Full implementation costs

Cost catcgoq Annual cost ($)

Cost per eligible

employee’ ($)

Cost per service

hour’ ($)

Personnel.’ 128.692 4.60 21.5.5

Contracted ser\ Ices 2.902 0.10 0.62

Materials 3.797 0.14 0.X1

Building . 3 ._. 179 0.12 0.69

Equipment 0 0.00 0.00

Miscellaneous I.531 0.05 0.33

Total annual cost 140.161 5.01 30.00

.’ Includes labor cost of EAP staff attending in-house training.

’ Between 4 ‘I Y5 and 3:3 I :96 the EAP provided enhanced services to 5 19 employees at IX u orksitcs.

’ Between 4. I ‘Y5 and 3;3 I.96 the EAP provided 4,184 hours of enhanced services.

“Between 4. I 95 and 3:3 I :96, IX worksites or 8810 employees were eligible for enhanced EAP service>

‘Between 4 1’95 and 3/31 ;96 the number of eligible employees was 27.971.

’ Between 4 I ‘95 and 3’31 ‘96 the EAP provided 4.672 hours of service to employees.

234 M. T. French Ed ul.lE~~aluation und Progrum Plunnitzg 21 (1998) 227-236

and how this amount is distributed by categories. As shown in Table 3, the value of labor time spent by the EAP staff on implementation activities accounted for

almost 92% of the total cost ($128,692). This includes the time spent by the specialized counselors on counseling,

outreach seminars, supervisor training and any other

enhancement activities. The EAP also contracted with a

psychiatrist for consulting purposes. We estimated that the fees paid by the EAP for the psychiatrist’s time that

was attributable to the protocol implementation was

$2,902. Including the consultant fees and the value of the EAP’s staff time spent on the protocol implementation,

we found that labor accounted for almost 94% of the total cost for the first year implementation.

Building space, materials and miscellaneous resources

made up the remaining 6% of the total costs of the

enhanced service protocol. Specifically, the EAP paid $3,239 (approximately 2% of total costs) in the first year for the building space used by the specialized EAP coun-

selors. This was calculated by multiplying 193 ft” of

additional space (after adjusting the 203 total ft’ of office

space occupied by the specialized counselors to account

for the amount of time they spent on implementation activities) by the rental rate of $1.36 per ft’ per month. It was determined that this rental rate was the fair market

value. The EAP paid $3,797 (approximately 3% of total

costs) for materials used in implementing the protocol.

These costs included a new EAP video, new and revised brochures, flip charts used in outreach seminars and

supervisor training and general office supplies. Finally,

the EAP paid $1,531 (approximately 1% of total costs)

for miscellaneous resources. These items included minor repairs, staff training and travel and a new printer stand.

Rather than reporting only total costs, a more informa- tive approach is to estimate the annual cost of enhanced EAP services per eligible employee, per serviced employee

and per service hour. Average or unit cost estimates pro-

vide financial information about a program that adjusts

for program size. Because of these adjustment factors, programs of different sizes can be compared and analyzed in a meaningful way (Zelman, 1987).

Before presenting the average cost estimates, it is help-

ful to briefly explain how intervention implementation

influenced the resulting average cost estimates. Recall

that we focused the intervention on one worksite (Work- site I) and intentionally withheld any aspects of the inter- vention for another worksite (Worksite 2) during year 1 of implementation. Some of the remaining worksites served by the EAP were exposed to the intervention while others did not receive any enhanced services. The full intervention will be implemented at Worksite 2 during year 2 of implementation and all other worksites served by the EAP will receive enhanced services thereafter.

To estimate per employee costs for implementation, we first determined that 18 worksites were exposed to the

enhanced service protocol during year 1. This amounted to 88 10 employees who were eligible to receive enhanced EAP services. The EAP actually provided enhanced ser- vices to 5 I9 clients, corresponding to 4184 service hours.

We then determined the number of worksites and employees that would be eligible for enhanced services

under full implementation. This amounted to over 90

worksites and 27,971 employees (excluding dependents).

The latter value was used to calculate the cost per eligible

employee under full implementation. Finally, the EAP

provided 4672 service hours to employees and assuming that this value remains constant during full implemen-

tation, we calculated the cost per service hour. As shown in Table 3, the cost per client served during

the first year of implementation was $270.06, the annual

cost per service hour was $33.50 and the annual cost per eligible employee was $15.91. Table 3 also reports the

projected cost per eligible employee that is based on pro- viding enhanced services to employees at all worksites

who currently contract with the EAP. The cost per eligible

employee under full implementation is $5.01. which is a

good estimate of the average costs associated with full implementation of the enhanced services intervention at

all worksites served by the EAP. Note that we expect the average intervention cost to decline to $5.01 in sub-

sequent years as it becomes available to all worksites serviced by the EAP.

Lastly, the EAP provided 4672 h of service to employees at all worksites between April 1. 1995 and

March 3 1, 1996. Assuming this is a reasonable estimate

of the service hours that will be provided during the intervention’s full implementation, Table 3 reports that

the total cost per service hour for providing the enhanced

service protocol is $30.

7. Discussion

The economic cost of standard and enhanced EAP

services for a large external provider were calculated and reported using several different measures. All costs are

reported in 1996 dollars for comparison across years. The total annual cost of standard EAP services in fiscal year

1994 (i.e. the year prior to beginning the intervention)

was $435,399. The average values amounted to $491 per client served, $117 per service hour and $23 per eligible employee. As expected, personnel accounted for a large majority (i.e. 80%) of the total cost.

The cost of the enhanced services provided through the EAP was divided between developmental and implementation costs. Developmental costs for the enhanced EAP protocol were incurred over a 6-month period from October, 1994 through March, 1995. We defined cost categories for developmental activities that are identical to those for standard EAP services. The

developmental costs are separated from implementation

costs because several preparation activities are necessary

before delivering the intervention and these costs are less

dependent on the size and scope of the intervention. For our study intervention, we incurred total developmental costs of almost $44,000, with personnel accounting for almost 79% of the total.

We estimated that the total cost of implementing the

intervention during the first year was about $140,000. Although tirst-year implementation activities were

focused on delivering the intervention at Worksite I, this annual cost estimate is not likely to vary much in future

years. Over time. enhanced services will be integrated with standard services at all worksites. Thus, we divided

the total annual cost estimate (i.e. $140,161) by five mea- sures of EAP size and/or service delivery: the number of employees that were eligible for enhanced EAP services

during the first year of implementation, the number of employees that actually received enhanced EAP services

during the first year of implementation, the number of

enhanced service hours during the first year of implemen- tation, the number of employees that are projected to be

eligible for enhanced EAP services at full implementation of the intervention and the number of total service hours that are projected to be provided to EAP clients at full

implementation. Using the broadest measure ofeligibility

(i.e. full implementation), the cost per employee is $5.01, which is considerably lower than the per employee cost when the worksites with no exposure to enhanced services

during year I are excluded (i.e. $15.91). The cost per service hour delivered at full implementation is estimated

to be about $30.00. Compared to the range of case study cost estimates

reported in Bray et al. (1996), the cost per eligible employee Ihr standard EAP services at the Rockford

EAP is close to the median. Rockford EAP costs are also

approximate to the median per-employee cost reported by French ct al., (1996b) and French, et al. (1997) using data from national surveys. However, no comparable cost estimates for enhanced EAP services are available in the literature to assess the magnitude of our intervention

costs.

To help interpret the estimates for the enhanced service

costs and determine potential uses of the data, we olTer the following suggestions. Since most EAPs do not have

the personnel or other resources to immediately implement a protocol of this type, they should expect to incur some one-time developmental costs. Depending on

the expertise of existing staff and the characteristics of

standard EAP services. the cost of this investment will vary across programs. The Rockford EAP invested about $44.000 in developmental costs, which can be viewed as a real-world example at an existing program.

Unlike developmental costs. the cost of implementing the enhanced protocol is a recurring investment in improved service delivery. Economies of scale and greater

operational efficiency are possible as the intervention pro-

ceeds, but the cost of implementing the intervention dur-

ing the first year is unlikely to vary much in future years

unless the intervention design changes. Thus, the cost per eligible employee for enhanced services can be added to the cost per eligible employee for standard services to calculate the new per-employee cost of all EAP services.

For the Rockford EAP. the per-employee cost fat enhanced services (i.e. S.5.01) is about X0/;, of the per-

employee cost for standard services (i.e. $22.92). Added together, the cost per eligible employee for the full service

package is $27.93. which is still very similar to the median

EAP costs reported in Bray ct al. (1996) and French ct al. (1996b). Other EAPs can use these estimates to help

predict the types and magnitude of costs they will incur if they decide to offer similar services.

It is natural to \iew thecost perelipibleemployee under full implementation (i.e. S5.01) ;LS the incremental cost

per employee to deliver the enhanced services. This is

not completely accurate. however. Because the enhanced

services were built upon the standard services, the dis- tinction between standard and enhanced services was

sometimes difficult to define and we were more likely to assign a cost as enhanced in these cases. For example, the

EAP counselors did not keep detailed time logs. In some cases we relied on their recall to distinguish between labor

hours spent providing enhanced versus standard EAP

services. Consequently, we believe that rhe pet- employee cost for enhanced services ih best viewed as an upper bound estimate of the incremental cost from standard services.

The advantages of having current cost estimates for

de\,eloping and implementing an actual EAP intervention

have been stated throughout this paper. Houever. v,e strongly discourage EAP staff and other EAP researchers from using cost estimates alone lo evaluate programs

and develop resource allocation rules. A full and careful evaluation requires quantitative information on inter-

vention outcomes and economic benefits (French ct al..

1995). From ;I policy perspective. benefit-cost studies are a critical tool for demonstrating program v;~luc and sec-

uring additional funding.

In conclusion. the enhanced EAP protocol is pro-

ceeding smoothly within the Rockford program and implementation is quickel and considcrubly more

efficient at each new workplace. The protocol will be fully implemented at our two analysis sites by the end of‘ 1997 and all Rocktbrd EAP clients should have at least some

exposure to the enhanced services by the end of 1998. We

continue to collect EAP utilization and human resources data. which will enable us to cxaminl: changes in work- place behavior for those individuals who sought help from the EAP. In addition, anonymous employee surveys will indicate the degree of understanding and support for the standard and enhanced EAP services. Future research projects will combine the cost data reported here with

236 M.T. French eI al.lEraluation und Program Planning 21 i 1998) 227-236

EAP utilization and outcome data to compare the econ- omic costs and benefits of the REAP intervention.

Acknowledgments

Financial assistance for this study was provided by the

National Institute on Alcohol Abuse and Alcoholism through a grant to the Research Triangle Institute (grant

No. AA10318) and a subcontract to the University of Miami. The primary aims of the grant are to design,

implement and evaluate a new employee assistance pro- gram (EAP) outreach intervention. Program information and helpful suggestions from Jeremy Bray, Mark Kend-

all, Sheryl Andreason, Lee Hicks, Robert Anwyl and two

anonymous referees improved the paper.

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