Anyone have experience in the substance abuse and rehabilitation industry?
January 25, 2022
by a searcher in New York, NY, USA
Hello everyone,
As a result of experiencing a loss of someone close to me, I'm considering entering the substance abuse/mental health rehabilitation industry, starting in the United States. I'd considered it for a little while, but this event has been a particularly potent motivator to relook at the industry.
I'm wondering if anyone can offer perspective about the general industry dynamics, possible chronic customer pain points, opportunities for improvement, the profitability characteristics of these businesses, and what you think about the possibility of a rollup in this area to help improve, standardize, and scale care to those who need it?
Any help/tips.pointers you could offer, or any further advice you can offer that I didn't think to mention would be greatly appreciated.
Thanks everyone,
Paul
from Rice University in San Diego, CA, USA
I have briefly looked into this space, motivated by a similar loss in my family. Please be aware that fraud (patient brokering) in this industry was rampant for a time, so be extra careful during diligence. There has been a lot of roll-up activity in this area and I've also heard talk of sky-high multiples - one deal I heard went for ~30x. Value-based care initiatives are also changing the way that payors reimburse (happening across healthcare, of course).
CARF [http://www.carf.org/home/] and the Joint Commission [https://www.jointcommission.org/] are two key accreditation bodies that you can look to for more detailed resources.
from Stanford University in Honolulu, HI, USA