Substance-abuse treatment is a $7.7-billion-dollar industry according to New York research firm IBISWorld Inc. Small wonder why in 2006, Bain Capital eagerly obtained CRC, the nation's largest single provider of substance-abuse treatment and services, according to Bloomberg's Magazine.
SEC Form 10-K reveals as of 2012, CRC operated 29 inpatient, 57 comprehensive-treatment facilities, and 16 outpatient clinics in 21 states. It doesn't end there. CRC's youth division includes 15 adolescent and young-adult programs in 6 states. Bain's CRC also operates 17 weight-management facilities in eight states and one in the UK.
The cost of inpatient 12-step-based treatment averages $25,166 and because it isn't very effective relapse is almost guaranteed. Although centers rarely state any hard data regarding anything, best estimates indicate that the average addict repeats treatment eight times or more.
Furthermore, The Partnership at Drugfree.org quotes the AP as reporting that this substance-abuse treatment is largely publicly funded.
The government's own Alcohol and Drug Services Studies (ADSS) revealed that 86% of substance-abuse facilities receive public funding, with a median of 62% regularly receiving public funding.
Corporate money grabbers are eager to jump on the addiction-treatment bandwagon because few question the methods, and programs are cheap to operate and very profitable. Simply have patients repeat, "I am powerless over alcohol and my life has become unmanageable" enough times, then hand them a meeting list and they're cured.
That is until the court-to-treatment pipeline sends them through again and with county funding.
Well-intentioned judges don't really understand addiction or its effective treatment so they continue to order defendants to what they're vaguely familiar with--Alcoholics Anonymous and 12-step-based treatment.
Due in large part to increased court-ordered treatment; CRC alone boasts an annual growth of 2-2% with patient revenue of $452.3 million, with 20.9% it government funded.
Even if the patient doesn't qualify for public funding, there really isn't a problem. 12-step treatment centers are slick operators who know just which philanthropic agencies and good-hearted churches to turn to, and keep a list of contacts.
Unlike medical facilities, treatment centers demand payment up front, so they're a no-lose investment for vultures like Bain. They've already got the cash even if a patient drops out of the program. Overflowing with a steady stream of state- and privately funded clients, the opportunities for profit just keep growing.
The courts are more than happy to accommodate this.
Recently, the national trend has been a more sympathetic tone toward heroin addicts. Even conservative governors such as Wisconsin's Scott Walker are advocating court-ordered and publicly funded treatment.
Not one to miss out on easy financial growth, Bain is eager to jump on board.
The Boston Globe reports the Massachusetts investment giant also recently acquired Habit OPET, the state's largest chain of substance-abuse-treatment facilities. Through CRC, Bain pumped $58 million into the purchase of the for-profit centers.
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