Mental Health & Substance Abuse

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 11,100 mental health and substance abuse centers in the US provide treatment and care for patients with mental health disorders and substance abuse illnesses, also known as behavioral disorders. About 48% of outpatient service centers and 62% of residential treatment centers are non-profit organizations.

Dependence on Third Party Payers

Mental health and substance abuse centers rely primarily on insurance companies, managed care organizations, and government programs as their main sources of revenue.

Coverage Improving Via Parity Laws

Growing recognition of the cost of mental illness and lack of patient access to care has resulted in federal legislation to improve mental health and substance abuse coverage.

Industry size & Structure

A typical mental health or substance abuse center employs 37-55 workers and generates $3-4 million in annual revenue.

    • The mental health and substance abuse service industry consists of about 11,100 companies that operate 20,000 facilities, employ about 495,400 workers, and generate $43 billion annually.
    • About 48% of outpatient service centers and 62% of residential treatment centers are non-profit organizations.
    • Large organizations include CRC Health Group and the Hazelden Betty Ford Foundation.
                                  Industry Forecast
                                  Mental Health & Substance Abuse Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 25, 2022 - Pandemic Drives Increase In Anxiety, Depression
                                  • Global prevalence of anxiety and depression increased 25% during the first year of the COVID-19 pandemic, according to the World Health Organization (WHO). One major explanation for the increase is the unprecedented stress caused by the social isolation resulting from the pandemic. Constraints on people’s ability to work, seek support from loved ones and engage in their communities were cited as major causes of isolation-related stress. Loneliness, fear of infection, suffering and death for oneself and for loved ones, grief after bereavement and financial worries have also been cited as stressors leading to anxiety and depression.
                                  • Alcohol-related deaths increased about 29% in the first year of the COVID-19 pandemic, according to the Centers for Disease Control and Prevention. Michael Barnett, assistant professor of health policy and management at Harvard T.H. Chan School of Public Health, said that the coronavirus pandemic did not create many new social problems. It magnified the ones some people were struggling with — social isolation, financial uncertainty, the burden of mental illness with not enough available treatment.
                                  • The mental health consequences of the pandemic will continue during the next state of the coronavirus pandemic, according to Elizabeth Stuart, a professor at the Johns Hopkins Bloomberg School of Public Health. Support must continue for individuals who may experience mental health challenges after being infected with COVID, children and adults who lost a loved one to COVID, and those who experienced financial or other stresses during the pandemic.
                                  • Mental health and substance use disorders have worsened during the coronavirus pandemic and the use of alcohol and recreational drugs during the workday is increasing, according to the National Safety Council. About 75% of employers have been directly impacted by workers who take opioids, but only 17% feel well-prepared to handle the situation. The addiction issue is also impacting the ability of employers to hire and retain workers. Even when an employee is not the addicted party, the addiction of a family member can wear on the employee's productivity.
                                  • Many experts say that telehealth will likely become a permanent fixture in the healthcare landscape. “Research on telehealth use conducted during the pandemic showed that there was a 1400-percent increase in substance use care in telehealth,” said Dr. Lawrence Weinstein, chief medical officer at American Addiction Centers. Global venture capital funding for digital health companies hit a record $15 billion in the first half of 2021, according to a report by Mercom Capital Group.
                                  • The Biden administration is releasing $3 billion to help states cope with rising substance abuse and mental health impacts of the coronavirus pandemic. Money from the most recent coronavirus relief package will be equally divided between the Community Mental Health Services Block Grant and the Substance Abuse Prevention and Treatment Block Grant, roughly tripling the federal commitment to the programs, officials say. The money will be distributed through the federal Substance Abuse and Mental Health Services Administration.
                                  • Deaths caused by drug overdoses increased 26.8% during the coronavirus pandemic, according to the White House Office of National Drug Control Policy.
                                  • The COVID-19 pandemic is having a detrimental impact on substance use, mental health, and weight-related health behaviors among people with obesity, according to a study by University of Texas researchers. "Many patients with obesity are also challenged by mental health conditions. Those who reported anxiety, depression, and trouble sleeping were two to four times more likely to increase their use of substances. For those who reported stress eating, there was a six-fold increase in substance use," says study author Jaime Almandoz. Nearly half of the 589 patients surveyed for the study reported using recreational drugs and alcohol, and 10% reported increased use since the start of the pandemic. Seventeen of the patients have tested positive for COVID-19. More than 42% of American adults are obese, according to the Centers for Disease Control and Prevention.
                                  • People with substance use disorders may be more likely to become infected and die of COVID-19. "Drugs inhibit the ability to fight viral and bacterial infections, disrupting immune function," said Dr. Nora D. Volkow, director of the National Institute on Drug Abuse and co-author of a study funded by the National Institutes of Health and published in Molecular Psychiatry. People with opioid use disorder and tobacco addiction were significantly more likely to die of COVID-19, according to study results. The study emphasizes the need to screen for, and treat, substance use as part of the plan for controlling the pandemic.
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