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 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
Recent Developments
Mar 7, 2023 - Patients With Co-Occurring Disorders Likely To Have Just One Treated
- About 10% of all adults with co-occurring disorders received treatment for both conditions in 2022, according to the Pew Charitable Trusts. About 2 in 5 adults with co-occurring disorders (42%) did not receive either substance use or mental health treatment of any kind in 2022. About 60% of people with a mental illness who were arrested had a co-occurring substance use disorder.
- Public health stakeholders including The Community Preventive Services Task Force warn that relaxed alcohol sales rules are eroding progress in combating substance abuse primarily because resources for treatment of alcoholism have failed to keep pace with problems resulting from increased consumption. Many states moved to help restaurants and small businesses by making it easier to sell alcoholic beverages during the pandemic. The public policy shift in the states coincided with a significant increase in alcohol consumption during the pandemic and a 26% increase in alcohol-induced deaths from 2019 to 2020, according to the Centers for Disease Control and Prevention. The Community Preventive Services Task Force, an independent panel of experts created by the Department of Health and Human Services to recommend evidence-based public health actions to government agencies, says both raising taxes on alcohol and narrowing access to it could reduce rates of misuse.
- Marijuana abuse among 6- to 18-year-olds has increased 245% since 2000, while child alcohol abuse has steadily declined over those years, according to Oregon Health & Science University researchers. Use of cannabis has evolved over the years. "We're seeing that adolescents are moving away from smoking weed, and they're moving on to alternative modes of consumption," like edibles, lead researcher Dr. Adrienne Hughes said. "A lot of times they're marketed in ways that are attractive to young people and are considered kind of more discreet, more convenient and not obvious."
- The US Department of Health & Human Services (HHS) has renewed the Public Health Emergency (PHE) declaration for COVID 19 for another 90 days. The current declaration begins on January 11 (the date the PHE was previously scheduled to expire) and extends through April 11. The emergency measure linked to the PHE that may be of most interest to mental health and substance abuse services is coverage of telehealth services. Medicare and Medicaid coverage of telehealth services was extended immediately. PHE renewals keep in place flexibilities under Section 1135 waivers, such as the expanded use of telehealth. They also extend public aid programs. HHS will provide states with 60 days notice prior to the termination of the PHE. Prior PHE renewals gave HHS the discretion to terminate the PHE at any time. Waiver of cost-sharing for medical and behavioral telehealth services by health insurers is likely to be extended again by insurers.
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