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
Sep 25, 2024 - Biden Administration Requires Private Insurers To Pay For Mental Health Care
- Private health insurers will be required to cover mental health care and addiction services the same as any other condition under a final rule released by the Biden administration. Most provisions in the rule will apply to group health plans and health insurance issuers for plan years starting January 1, 2025, or after. The Association for Behavioral Health and Wellness, the Blue Cross Blue Shield Association, and the ERISA Industry Committee, a major employer group, said the rule would have “unintended consequences” that could raise costs and jeopardize access to mental health care. Addressing the shortage of mental health providers is a top priority, the groups said, but “the final rule will complicate compliance so much that it will be impossible to operationalize, resulting in worse patient outcomes.”
- 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).
- Mental health and substance abuse industry employment and wages for nonsupervisory employees increased slightly during the first seven months of 2024, according to the US Bureau of Labor Statistics (BLS). Mental health and substance abuse hospitals kept prices unchanged during the first seven months of 2024, according to the BLS.
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