They State of the Drug Rehab Industry in March 2019

1) As this year goes on, it seems that rehab center growth are is slowing and/or are having a harder time filling their beds with high quality insurance plans.

There may be several reasons for this:

1) The insurance company’s are cracking down on fraud and waste
2) There may be less insured people
3) The war on addiction may be seeing a plateau.
4) Harder licensing by states.
5) More competition with a over concentration of rehab centers

The data still needs to come in on all three of these.

2) Another seeming trend are more rehabs going ‘in-network’ with insurance plans. It may be because they have found that good PPO out-of-network plans aren’t filling their beds like they used to. You’ll hear more and more how rehabs are advertising their in-network status.

3) That smaller rehabs are attempting to sell, or are just flat out going out of business. This would make sense given the glut of rehabs in some regions, and the cost to operate them and the increased laws and prosecutions against fraudulent rehab companies and body-brokers (people who essentially sell patients to rehabs for reimbursements)

4) Large healthcare systems or large funds, are buying several rehabs. It makes sense, especially in light of how much money it takes to advertise amongst the fierce competition.

I would say at this point, the rehab bubble may have burst, but there is still money to be made, especially if a company can move efficiently to in-network status and advertise themselves correctly.