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Some addiction treatment centers make big profits by cutting back on care

Near the end of his scheduled three-month stay in a rehab center outside of Austin, Texas, Daniel McKegney was forced to tell his father in North Carolina that he needed more time and more money, he recalled recently.

His father had already received bills from BRC Recovery totaling about $150,000 to cover McKegney’s treatment for the powerful opioid fentanyl addiction, according to insurance data shared with KHN. But McGagney, 20, said he found the program “suffocating” and was not happy with its sponsorship.

He was advised against long-term use of Suboxone, a drug that is often recommended for treatment Opiate effect Addiction, because the BRC does not consider it a form of abstinence. After an initial five-day detox last April, McKegney’s care plan has mostly included a weekly therapy session and 12-step group meetings, available for free around the country.

McKegney said a BRC staff member recommended he stay a fourth month and even sat on the call with his father.

“They used my life and [my] “My dad would have loved me to siphon another 20,000 on him,” said McGagney, who told KHN he started using fentanyl again after the extravagant stay.

BRC has not responded to specific concerns raised by McKegney. But in an emailed statement, Mandy Baker, president and chief clinical officer for BRC Healthcare, said many of the complaints from patients and former staff shared with KHN were “no longer accurate” or were related to COVID-19 safety measures.

But addiction researchers and private equity observers said models like the one used by the BRC — charging high fees to patients without ensuring access to evidence-based care — are common throughout the country’s addiction treatment industry.

The growing model and demand are why addiction treatment has become increasingly attractive to private equity firms looking for great returns. delusion banking on expectations which predicts the market will grow by $10 billion — double the size — by the end of the decade Excessive drug dose And Alcohol-related death rates multiply.

“There’s a lot of money to be made,” said Eileen O’Grady, director of research and campaigns at the Private Equity Project, a nonprofit watchdog that tracks private equity investments in health care, housing, and other industries. “But it does not necessarily correspond to high-quality treatment.”

In 2021, there have been 127 mergers and acquisitions in the behavioral health sector, which includes treatment for substance use disorders, rebounding after several years of decline, According to investment banking firm Capstone Partners. Private equity investing has driven much of the activity in a highly fragmented and rapidly growing industry that has historically had few barriers to ensuring patients receive appropriate care.

Recovery Center Building in Nashville
BRC Recovery, a private equity-backed addiction treatment company, purchased the Nashville Recovery Center in 2021. Private equity investment has driven much of the recent activity in substance abuse treatment, an industry that is highly fragmented and has historically had few barriers to guarantee That patients receive appropriate care.

Blake Farmer for KHN

severely 14,000 treatment centers spread in the country. They have multiplied addiction rates Rise and health insurance plans are required to provide better coverage for drug and alcohol treatment. Treatment options vary widely and are not always consistent recommended ones By the Federal Administration of Substance Abuse and Mental Health Services. While efforts to standardize treatment are progressing, industry critics say private equity groups are investing in centers with unproven practices and cut-off services that, while unprofitable, may support recovery in the long term.

Baker said the company treats people who have not been successful in other facilities and does so with input from both clients and their families.

Private equity skimps on known standards

Centers that discourage or prohibit the use of Medicines approved by the Food and Drug Administration for the treatment of heavy substance use disorder, but it does not align with the American Society of Addiction Medicine’s guidelines on how to manage opioid use disorder long-term.

Suboxone, for example, combines Buprenorphine is a pain reliever and the inverse opioid drug naloxone. The drug prevents overdose while reducing the patient’s cravings and withdrawal symptoms.

“It is inconceivable to me that an addiction treatment provider that purports to treat opioid use disorder would not provide the drugs,” said Robert Lubran, a former federal official and chairman of the Dania Institute, a nonprofit that supports states and treatment providers.

Brendan Saloner, assistant professor of health policy and management at Johns Hopkins Bloomberg School of Public Health, said inpatient facilities, where patients stay for weeks or months, have a role in treating addiction but are often overused.

Many patients relapse into drug and alcohol abuse after staying in hypnotic settings, however Studies show The use of drugs can reduce the rate of relapse of some types of addiction. McGagney said he now takes Suboxone regularly.

“The last three years of my life have been hell,” he said.

Besides getting medications, high-quality addiction treatment usually requires long-term care, according to Shatterproof, a non-profit organization Focused on improving addiction treatment. Ideally, treatment is customized for the patient. While the “Twelve Steps” program developed by Alcoholics Anonymous may help some patients, others may require different behavioral health therapies.

Laura Katz Olson, a professor of political science at Lehigh University who wrote a book on: Private equity investment in American healthcare.

With healthcare companies, she said, investors often cut services and reduce staff costs by using fewer and fewer trained workers. Private equity firms usually “buy a place that does a really excellent job, and then dump it completely,” Olson says. During his stay, excursions to see movies or go to the lake came to an abrupt halt, food went from bowls of poke and pork tenderloin to chili that tasted like “dish soap,” McKegney said, and staff turnover was high.

Almost three years ago, BRC landed support from NewSpring Capital and Veronis Suhler Stevenson, two private equity firms with extensive portfolios. Their holdings include a payroll processor, a wedding dress designer, and a donut chain. With the new funds, BRC began its expansion push He purchased several treatment facilities in Tennessee.

NewSpring Capital and Veronis Suhler Stevenson did not respond to emails and phone calls from KHN.

Higher prices and lower overheads = big business

Prior to the sale to BRC, Nashville Recovery Center co-founder Ryan Cain said that approximately 80% of the center’s offerings were free. Anyone can attend 12-step meetings, meet a sponsor, or just play pool. But the new owners focused on a new sober living program that cost thousands of dollars a month and counted on staff who were recovering.

“You have the perfect breeding ground to be able to take advantage of a lot of really good, well-meaning people,” said Mitzi Dunn, a former Nashville Recovery Center employee who is recovering and now works at another treatment facility. Dawn hosted “Sing and Share”, which was canceled shortly after the acquisition.

Mitzi Down
Mitzi Dawn was on staff at the Nashville Recovery Center and left after the center was taken over by BRC Recovery and the popular “Sing and Share” event was cancelled. She says she is worried about her colleagues, as most of them are recovering as she is.

Blake Farmer for KHN

In 2021, Nancy Milam, 48, emptied her 401(k) retirement fund in order to pursue a sober living program and tackle her alcohol addiction. She had only been sober for six months when she was hired as house manager, supervising some of the same residents she had the program with. She had to come into contact with other residents’ medications, which she said she may have abused. Milam said she was lucky to maintain sobriety.

“I think it served their need. And I was ambitious. But it shouldn’t have happened,” Milam said, adding that she left because the company didn’t help her start her degree as a drug counselor as promised.

The license violation was reported to Tennessee regulators in late 2021, in which an employee was subsequently fired for having sex with a resident in a storage area. And KHN obtained a transcript of a 911 call made in August 2022 — after a resident drank half a bottle of mouthwash — during which an employee admitted there was no nurse on site, which some other states require.

Removing the burden from consumers

Provider regulations focus heavily on health and safety rather than clinical guidelines. Only a handful of states, incl New York and Massachusetts, requires that licensed addiction treatment centers offer medications for opioid use disorder and follow other best practices.

“We have a huge problem in the field where licensing standards are not aligned with what we know are the most effective standards for quality of care,” said Michael Botticelli, former director of the Office of National Drug Control Policy during the Obama era. and a member of the Clinical Advisory Board for the private equity-backed Behavioral Health Group. Some organizations, including Shatterproof, Patient counseling towards appropriate care. Federal and state governments Direct public funds to a large extent To centers that meet standards for quality clinical care.

But access to treatment is limited, and desperate patients and their families often don’t know where to turn. State or federal regulators do not monitor claims from rehab facilities, such as “99% success rateDescribed by BRC.

“We can’t put the burden on patients and their families” to navigate the system, the Johns Hopkins salon said. “My heart really breaks for the people who have thrown thousands of dollars into fake software.”

When her niece was ready for inpatient rehab in the summer of 2020, Marina said sending her to the BRC was an “extraordinary reaction”. Marina, a physician in Southern California, requested that only her middle name be used to protect the privacy of her niece, who suffers from alcoholism.

She searched the facility three years ago but didn’t investigate deeper because she was afraid her niece might change her mind. BRC announces success stories On the TV show “Dr. Phil” And Posted affirmations on me Social media.

Marina agreed to BRC’s initial cost of $30,000 per month for a three-month stay in Texas, which she paid out of pocket because her niece lacked insurance. She allowed KHN to review some of her niece’s medication and pharmacy bills.

Marina said she paid for the fourth month, but said in the end the program didn’t help her niece, who was still “very sick.” She said her niece constantly felt guilt and shame during rehab. Marina believed there was insufficient medical oversight, and said the program “weakened and diluted” her to obtain additional services, such as doctors’ visits, that she thought would be included.

It doesn’t matter if you are educated and smart, – said Marina. “When that person is your loved one, you are just desperate.”

KHN Kaiser Health News is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and reconnaissance, KHN is one of the three major drivers in the KFF (Caesar Family Foundation). KFF is a non-profit organization that provides information on health issues to the nation.