A successful business strategy to exploit the growing addictions-treatment market is abandoning the niche approach, acquiring private equity capital and consolidating all the needs under one very large roof.
The private-pay Addictions Treatment World has shown steady, profitable growth and Big Business is starting to take serious note. The smaller operations, while not sought by large investment firms and major venture capitalists, are concerned that Big Business, and Healthcare Reform/"Big Pharma" will dole out detoxification to hospitals and prescription drug companies would handle the psychological treatment needs of future clients, leaving them out of the future growth of the industry.
In Alcoholism and Drug Abuse Weekly’s Special report: Addiction treatment growing as a financial investment, Alison Knopf highlights American Addiction Centers as one example of investors consolidating to serve a steadily growing clientele with complete services; “You need good solid psychiatry and addictionology,” Michael Cartwright, Chairman and co-founder of AAC, said. “We don’t have single-diagnosis clients any more.”
Another corporation that has grown substantially in the last decade is CRC Health Group, which was acquired by Bain Capital in 2005. Its CEO Jerome Rhodes cautions that the lack of national standards for adult substance abuse treatment and misleading or even deceptive marketing makes a “Wild West” culture for consumers, who might get very different treatment than they’d bargained for.
Another point that a consumer needs to think about is the Internet. The authors point out that the search terms "addiction" and and "rehab" are becoming more and more costly as Google AdWords. And so, a warning: it is not that uncommon for a facility or group of facilities to have a website that appears independent, but it is owned by the parent company; dig deep when you see an "independent" website and if you can not quickly find who the owner of the site is -- realize this is deceptive. AllKindsofTHERAPY.com makes clear to the end user which programs on this site are paid and unpaid listings. And along with paying sites, AllKindsofTHERAPY provides unpaid listings, to ensure the site is including as much relevant information as possible. Are the websites you are visiting attempting that goal?
So... do your homework. Read up on models and know their efficacy, inquire about licensing and confirm the credibility of the program’s licensing, check on longevity among the line staff as well as therapists and owners and visit the program before giving over your credit card.
[Update: October, 2014 - Acadia Healthcare announced its purchase of CRC for $1.2 billion, expected to be completed by 2015.]