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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 13,100 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 42 workers and generates $4.2 million in annual revenue.
- The mental health and substance abuse service industry consists of about 13,100 companies that operate 23,000 facilities, employ about 546,000 workers, and generate $55 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
Recent Developments
Jul 16, 2024 - Labor Costs Increase
- Mental health and substance abuse industry employment and wages for nonsupervisory employees increased slightly during the first five months of 2024, according to the US Bureau of Labor Statistics (BLS). Mental health and substance abuse hospitals kept prices unchanged during the first five months of 2024, according to the BLS.
- The incidence of substance use disorders among seniors has climbed steeply, according to the Centers for Disease Control and Prevention (CDC). CDC data indicates that the rate of overdose deaths among seniors quadrupled from 2002 to 2021. Some older adults show long-term substance use, while others develop a harmful reliance later in life.
- Sociodemographic variables were the most robust predictors of substance use initiation, according to research published online in the American Journal of Psychiatry. Researchers examined data on 420 variables for more than 6,800 youths (ages 9-10), following them over three years. Approximately 14.4% of the youths had initiated substance use by age 12. Among the sociodemographic factors predicting substance use initiation were religion, race, and income. Religion was a strong protective factor for Mormon youths, while Jewish youths were more likely than those from other religions to initiate substance use. Black youths were less likely to initiate substance use than white youths, and those from a lower-income background were more likely than others to initiate substance use. Prenatal exposure to substance use was among the top predictors, with prenatal exposure associated with a greater likelihood of initiation. Youth with a history of school detention and suspension were more likely than others to initiate substance use. Several modifiable risk factors also predicted greater likelihood of substance use initiation, including substance availability, peer use of alcohol and nicotine, and sensation seeking (need for varied, novel, and complex sensations and experiences).
- The production of dopamine, often referred to as the “happiness hormone,” is not linked to a higher risk of drug susceptibility, according to researchers at the University of Geneva. Researchers discovered that impulsivity predicts cocaine consumption not through dopamine production capacity but possibly through the control of its release. The results may offer new keys to understanding vulnerability to drug abuse, which could lead to the development of more targeted interventions for people at risk. When a person consumes an addictive drug, his or her dopamine release surges, creating a “high” feeling. With repeated drug use, this dopamine release drops, potentially driving the person to increase drug consumption. This mechanism varies between individuals, with some showing a greater propensity to consume the drug while others don’t. The reasons for these differences are unknown.
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