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posted by martyb on Sunday June 12 2016, @10:10PM   Printer-friendly
from the Hooked-on-Profits? dept.

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)


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  • (Score: 2) by takyon on Monday June 13 2016, @04:13AM

    by takyon (881) <{takyon} {at} {soylentnews.org}> on Monday June 13 2016, @04:13AM (#359134) Journal

    The way I understand it, addictions to prescription opiates are on the rise, and when you run out of ways to get the prescriptions, you turn to stuff like heroin and fentanyl. Heroin in particular is very cheap compared to the prescription opiates. Heroin has been a schedule I drug since 1970. Fentanyl is only schedule II.

    I don't think there's anything new about heroin, cocaine, etc. being targets of the Drug War. What's new is that a relatively safe and massively overscheduled drug is coming off the list (slowly).

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