How access to addictive drugs affects the supply of substance abuse treatment: Evidence from Medicare Part D.

This paper documents how substance abuse treatment (SAT) providers and services respond to increases in population-level opioid addiction. I do this by exploiting the implementation of Medicare Part D as an exogenous increase in the availability of prescription opioids. Starting in 2006, states with higher shares of the population eligible for Medicare Part D experienced increases in residential and hospital inpatient SAT facilities, beds dedicated to SAT, and SAT facilities offering medication-assisted treatment, relative to states with lower shares. These results suggest that the supply of SAT in the United States is capable of responding significantly to changes in demand.