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The business of addiction treatment and health care

Posted Jul 13 2010 4:04pm

Whether it’s you suffering with addiction or a loved one , it’s easy to forget that at least in this country, treating the sick is a cash-money-business. This is true for health-care as well as for addiction treatment , and as the polls right before the passage of the recent health-care reform suggest, enough Americans like it this way that it’s likely not going to change in my lifetime.

I attended a networking event for Los Angeles area investors ( LAVA ) that focused on health-care and technology , especially in the post Obama Care era. Though they didn’t specifically talk about addiction, I brought the topic up and spoke to a few of the panelists after. Based on everything I read until now and what I heard this morning, there’s big change a-comin’ in the addiction treatment industry. Here’s where I think we’re heading and why:

1. Obama Care will add millions of new health-insurance clients to the mix, most of whom are exactly part of the vulnerable populations ( poor , disadvantaged, less-educated) that more commonly need addiction treatment.

2. The Mental Health Parity and Addiction Equity Act passed in Congress 2 years ago and now in effect means that all health-insurance policies that offer mental health and addiction treatment coverage have to include it at levels equal to those of standard physical care. This means billions of dollars added to the pool of money for addiction treatment. As of right now, the details about coverage of therapy, outpatient substance abuse treatment, and residential programs is being worked out, but it’s likely that all three will  benefit.

3. Health insurance companies want standardization of services, and for their money, they’re going to get it. Just like there’s a standard way to treat diabetes , addiction treatment is going to become standard among the larger providers that are going to begin doing serious billing with insurance companies. So while CBT , MI , and medications will see a lot of reimbursement there, we’ll have to see about mindfulness therapy, yoga , and other less conventional approaches. My guess is that the bigger 12-step centered providers will be part of the mix whether they offer residential or outpatient substance abuse treatment.

4. More people will get addiction treatment, especially now that the government is refocusing its efforts on the initial assessment for substance abuse problems being performed in primary-care physician offices. forget about 10% of 24 million addicts getting attention for their problem, I think we’re going to see something more like 25%-30% of 60 million people with substance abuse problem of varying degrees (not just full blown addicts) making use of the system.

5. Addiction treatment will focus more on outpatient substance abuse treatment than inpatient services. Not only do we not have the capacity to put everyone in residential treatment, but as we cast a wider net, a smaller percentage of individuals will need intense residential work. Hopefully this will mean that residential facilities will actually start adhering to NIDA recommendations and extend their average lengths of stay towards the 90 day minimum recommended.

That’s a lot of change, but I think it’s about time for all of this to happen. Addiction treatment has spent too much time as a small industry that doesn’t have much power behind it. We’re going to start seeing better results soon because people are going to want to get a piece of this pie, and in the U.S., that’s almost always the biggest motivator for change.

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