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The recent uptick in heroin and opioid addiction along with new laws are making addiction treatment an attractive target for investors:
Every crisis presents an opportunity, as the saying goes. And when it comes to opioid addiction, investors and businesses are seeing a big opportunity in addiction treatment. Places like [Gosnold on Cape Cod] are being gobbled up by private equity companies and publicly-traded chains looking to do what is known in Wall Street jargon as a roll-up play. They take a fragmented industry, buy up the bits and pieces and consolidate them into big, branded companies where they hope to make a profit by streamlining and cutting costs.
One company that advises investors listed 27 transactions in which private equity firms or public companies bought or invested in addiction treatment centers and other so-called behavioral health companies in 2014 and 2015 alone. Acadia Healthcare is one national chain that has been on a shopping spree. In 2010 it had only six facilities, but today it has 587 across the country and in the United Kingdom.
What's driving the growth? The opioid addiction crisis is boosting demand for treatment and two relatively recent laws are making it easier to get insurers to pay for it. The Mental Health Parity Act of 2008 requires insurers to cover mental health care as they would cover physical health care. "Mental health parity was the beginning. We saw a big benefit. And then the Affordable Care Act was very positive for our industry," says Joey Jacobs, Acadia's CEO. He spoke at an investor conference last month.
Marketplace has an article about how data and new databases are being used to track and prevent addiction. It cites the following report from Health Affairs:
Prescription Drug Monitoring Programs Are Associated With Sustained Reductions In Opioid Prescribing By Physicians (DOI: 10.1377/hlthaff.2015.1673)
(Score: 2) by Hyperturtle on Monday June 13 2016, @01:26AM
Those that ignore history (in the search for profits) are doomed to repeat it. I believe you are looking for the historical precedent called "The Opium Wars." Perhaps they did not have ads as you discuss, but the whole opium trade was rigged against ignorant consumers.
Except now, insurance pays for it with a veil of legality--up until the patient is cut off, of course. That's when the most obvious problems start for a user. I find it hard to believe there are so many people that don't remember this stuff in social studied at school, or whatever their world history was called. Even the ancient Greeks respected opium -- and the harm it could cause. Imperialism depended on it to fund itself many centuries later.
They say that if you smoke three pipes a day, you are an addict. Today, it is more like here is a 10 day supply, come back if you are still in pain. It takes about that long to habituate on some of these painkillers...
It doesn't help that the industry was very well rewarded for solving the pain problem. Drug dealers are not much different... insurance, trial doses.. the first one is free... both are very still true tenets for subscription sales and the consumer, and the pharmaceutical and medical industries.
Those doomed to repeat it weren't the drug dealers, but the consumers. Just like then, the the real pain was felt by the lay person -- not the industry.
(Score: 2) by aristarchus on Monday June 13 2016, @08:04AM
I was going for Windows 10. Oh, well, wars against English drug lords is almost the same.
(Score: 0) by Anonymous Coward on Monday June 13 2016, @03:34PM
I agree! Opiates... are the opiates of the masses, but to keep them under control when they are not addicted, we have windows 10. The first year is free!