The coronavirus outbreak in the United States is perhaps the biggest transformative event for addiction treatment since the introduction of Medication Assisted Treatment.
Early on in the pandemic—when the National Associate of Addiction Treatment Providers was reporting patient numbers down 40%-50%—the prognosis for treatment in the United States didn’t look good.
Now, with patient enrollment down 20%, the addiction treatment community is hanging on—but just barely. Major players in the industry are filing for bankruptcy and closing centers. Requests for assistance from the government have been largely ignored. Protocol for meetings, admissions, visitations, and mealtimes have changed beyond recognition in many facilities. Even with a massive pivot to telehealth, and mounting evidence supporting a rise in substance abuse in the general population, fewer patients are committing themselves to recovery amid the stress and uncertainty of the pandemic.
Today, we’ll look at the state of the addiction treatment industry during the time of COVID and consider what’s next for addiction treatment centers.
COVID Changed Everything. Where Does Addiction Treatment Stand Now?
According to one market analysis, revenues in the addiction treatment industry are set to decline by 13% over the course of 2020. Where pre-COVID projections pegged the industry’s net worth at about $42.1 billion this year, new data suggests the industry will actually clock in at about $38.2 billion at the close of 2020.
For those centers that survive the financial hazards of the pandemic, it’s very possible that a boomerang effect will see large numbers of patients pouring into facilities as restrictions loosen and a vaccine is made widely available. Whether that “boom” response to the current “bust” occurs in 2021, 2022, or even 2025—as some reports suggest—is still a matter of pure speculation at this point.
How Many Addiction Treatment Centers Will Close as a Result of COVID?
Given these projections, it looks like about 5% of centers won’t make it to the other side of the pandemic. The Salvation Army has already closed 100 centers nationwide. American Addiction Centers has declared bankruptcy.
As always proves true in times of change, nimble and adaptive businesses will wax as calcified and over-leveraged operations wane.
Business Reorganization May be an Option for Some Addiction Treatment Centers Struggling During COVID
The CARES Act impacted HIPAA rules in relation to addiction treatment and increased funding options for providers, but it also expanded the number of addiction treatment providers that can access the benefits of the Small Business Reorganization Act. This is an important detail for any addiction treatment provider struggling to pay debts in this current environment.
The Small Business Reorganization Act allows certain businesses—and even some individuals carrying business debt—to move through Chapter 11 bankruptcy more quickly and easily than ever before. Importantly, owners have uninterrupted control of business operations during the entire process and retain ownership of the business after the proceedings are complete.
The catch? You must pay all of your addiction treatment center’s “disposable income” to creditors for a set period of time, usually between 3-5 years.
Still, for addiction treatment centers with narrowing options, this part of the CARES Act could be the lifeline you need to get to the other side of coronavirus.
We’re Here to Help—During COVID and Beyond
At BehaveHealth, we want all of our addiction treatment center partners to succeed. When you do well, we do well. That’s why we’ve worked tirelessly to adapt our all-in-one software solution for all of the realities facing today’s addiction treatment providers.
If you’re one of the 70% of addiction treatment centers that’s still playing around with paper EHRs, let’s talk. If you’re wasting time with an ancient software system, let’s talk. If you’re not sure whether your forms are still HIPAA compliant, let’s talk.
Our cloud-based system takes care of everything,from billing to documentation to operations,saving you time, money, and sanity.
There’s a better way. Let us show you how. Claim your free trial today.