With over 20 million people in the United States suffering from a substance abuse problem, it’s no wonder that available beds in treatment facilities are scarce. The number of factors involved in helping those addicted to drugs or alcohol are, for lack of a better word, abundant. This poses a serious problem in allocating resources to treatment facilities, as some facilities required highly trained addiction counselors, medication, general practitioners and psychiatrists for medical supervision, beds, and all of the basic necessities that anyone staying away from home for weeks or months needs. So what can be done? Well, some of you may not like the idea of investors trying to get in on the addiction treatment industry, which is estimated in the billions of dollars, but with private money comes well-built and new treatment centers. CEO Brad Greenstein of the Recovery Centers of America (RCA), Danvers facility, believes that the new centers being built for RCA will serve the nationwide, everyday person that pays their insurance premiums, or would rather pay out-of-pocket. Mr. Greenstein believes that these are the people who are having the hardest time finding care.
A private New York equity firm, Deerfield Management is making the largest contribution to the new RCA centers with a whopping $231 million. It’s no surprise that such a firm would show interest in such a venture, because since laws were passed forcing insurance companies to pay for addiction treatment, along with the Affordable Care Act allowing young adults to remain on their parents’ health insurance until the age of 26.
Some treatment center operators are concerned that investors will measure the success of a treatment facility based on the profits, which would mean more people in treatment for longer, but with no strict regulations or oversight yet in place, it is difficult to tell whether this will be the case. One way or another, there isn’t enough space in the existing programs or centers to help the people that need it, whether poor, middle class or slightly more affluent. This means that if insurance companies will pay for it, those who have insurance or can afford out of pocket treatment costs could benefit from investors building new centers and providing much needed help and care to many who are suffering from alcoholism and substance abuse.
The information I provided in this post is based on a transcript I read on NPR.org of a radio interview, and due to their often rushed transcribing process, there are a few minor spelling mistakes in the transcript itself, but the information is all there. You can read the interview transcript for yourself by following the link I will provide at the bottom.