SUD Providers Could Face Financial Failure in 2021, Industry Executives Predict

The COVID-19 emergency has only exacerbated the nation’s substance use disorder (SUD) crisis, which was already a national emergency in and of itself.

Amid the coronavirus, overdose deaths have spiked, with the nation seeing about a 10% increase in fatalities in the first three months of the year, according to the Centers for Disease Control and Prevention (CDC).

In 2021, SUD treatment providers will get creative to meet the high demand for services, rolling out new and improved treatment and delivery options, according to executives in the SUD space. However, at the same time, they predict financial constraints could hold some providers back — and even put others out of business.

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Below, you can read those 2021 predictions and more from CEOs and C-suite executives in the SUD space. Some of the predictions have been edited for length and clarity.

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There continues to be a severely unmet need for those struggling with a substance use disorder at a time when overdose deaths are on the rise.

With the opioid crisis disproportionately impacting rural Americans, I predict in 2021 there will be an expansion of telehealth services to allow providers to reach communities that have limited access to services. While American Addiction Centers has treatment centers in eight states, we’ve been able to care for patients in more than 40 states due to relaxed federal and state policies for telehealth.

I’m also hopeful we will see bipartisan support for additional federal funding for treatment and prevention services.

Lastly, I believe treatment providers will continue to focus on the continuum of care to ensure patients with this chronic disease have the best possible outcomes and chance for long-term recovery.

— Andrew McWilliams, CEO of AAC Holdings, parent company of American Addiction Centers

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The big theme we expect to see [in 2021] is an acceleration of the addiction treatment industry’s evolution away from programmatic care to more individual, patient-centered care.

After a year marked by the huge expansion of virtual services, driven by a pandemic-related necessity that limited patient options, our field will transition to a new balance of traditional on-site care and virtual care that will empower more creative and patient-centered program design and enable more consumer options and choice.

In 2021, we expect to see continued migration away from fee-for-service and capitated payments toward value-based reimbursement models, which also will enable more individualized care — as will enhanced utilization of digital data platforms that leverage big data and machine learning.

The pursuit of better outcomes at less cost is driving much of these trends, along with the expectations of the modern, info-rich patient/consumer, who wants choices, price transparency, up-front pricing, quality assurances, on-demand services and omni-channel support (e.g. text, email, video, on-site).

Due to decreasing stigma associated with common concerns like depression and anxiety, another trend we expect to grow in 2021 is increased demand for services addressing mental health conditions that may or may not co-occur with a substance use disorder.

— Scott Palmer, executive director of strategic initiatives at Hazelden Betty Ford Foundation

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The biggest factors shaping SUD care in 2021 [will be] federal funding for helping people negatively impacted by the pandemic.

People succeeding in recovery and employed are far likelier to be in jobs that are lost or unsafe due to COVID-19. A federal stimulus package is desperately needed for this population. Without stimulus, relapse and overdose will increase further, and the need for restarting people in treatment will increase significantly in 2021.

Prior to herd immunity, effective use of telemedicine in SUD care is critical. Many people in recovery really need the connection that comes with in-person care. Hybrid models for telemedicine seem to be the best balance between COVID safety and preventing relapse and overdose.

Post-herd immunity, how long will it take to repair the behavioral comorbidity damage done by the COVID-19 pandemic to the SUD population? The pre-Covid situation was already dire.

Finally, public funding for SUD could increase, decrease or remain about the same depending on federal public policy decisions over the next few months, especially as it relates to mitigating state financial distress. Many SUD treatment providers are struggling now. My guess is that, overall, it will remain about the same, with quite a bit of variability from state to state. Quite a few SUD providers will fail financially.

The downside scenario (less funding) is a real risk right now.

— Howard J. Lewin, CEO of SaVida Health

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The biggest factor and also the biggest unknown [for 2021] is the pandemic and the financial effects it will have on states continuing to provide funding for current and expanded services.

We have been fortunate to be the recipient of resources granted to help drive more services into communities. This has resulted in a significant increase in the number of individuals being able to receive the help they need. As the pandemic continues, states are having to make very difficult decisions on how money will be allocated. These decisions could have a significant impact on how providers deliver care.

The addiction treatment field has seen specific changes to how we provide care during the pandemic, particularly as it relates to medication-assisted treatment at the outpatient level. Regulations and payer expectations have been adjusted to allow for more creativity and flexibility in service delivery. Digital platforms from connectivity tools to service delivery through telehealth have allowed individuals to continue to receive care during this crisis.

Providing administrative support more remotely from both a business and government perspective will pose questions on what is sustainable and what will revert back to pre-pandemic practices. I think reinforcing patient navigation and peer support as critical tools in our treatment continuum will be a game changer. These tools supported by a digital platform will generate more services, with longer engagement, more cost effectively. I believe regulators and payers will want to see more of this.

— Joseph Pritchard, CEO of Pinnacle Treatment Centers

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The factors I think will impact the recovery industry in 2020 include; the new administration, the economic recovery, continued action at the state level and industry consolidation.

In terms of the new administration, there are a few questions that must be answered to predict how it will impact recovery. Will Biden push for more treatment in lieu of jail time? Will he amend Medicare to permit treatment as a covered service? In terms of the economic recovery as temporary furloughs become permanent layoffs, how quickly will the economy recover?

For many people, especially in states that did not expand Medicaid, treatment is unaffordable without the insurance that their jobs provide. That could limit treatment centers’ ability to provide treatment even as the demand for treatment escalates due to the pandemic. We could be in a position where more people than ever want and need treatment but cannot afford it due to no insurance coverage.

In terms of the action on a state-level, several states, notably Connecticut and Illinois, are looking at expanding Medicaid to cover residential treatment. Many others are looking at rate increases to attract better providers. We will be watching closely to see what the states do to their Medicaid programs.

Lastly, in terms of industry consolidation, with interest rates low, I wonder, will larger providers consolidate gains by buying other programs? We are seeing the major addiction treatment providers opening new centers to serve the need, but will they also buy existing programs to consolidate the industry? Only time will tell.

–Matt Boyle, CEO of Landmark Recovery

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In 2021, the other public health crisis – substance use disorder – will continue to spike, and the toll on families will be considerable. That translates into more people seeking affordable treatment for their loved ones.

In 2019, Caron launched a strategic plan with the goal of making treatment more accessible. That included significant expansion of insurance offerings and we’ve been fortunate to build upon that in 2020 – adding substantial carriers to our roster.

In 2020, telehealth regulations were also waived as part of the pandemic response. We hope that will remain ongoing because telehealth improves access to care at a time when that is essential for many families. Likewise, momentum at Caron’s outpatient centers will continue as we expand our services in the new year.

From a programmatic standpoint, Caron’s focus continues to be our core and signature programming. We expect to treat even more professionals, older adults, women, first responders and individuals who have relapsed due to pandemic.

Additionally, … sicker patients are seeking treatment – including some on the liver transplant list – who require more significant medical care. Our robust team of doctors led by Dr. Joseph Garbely, Caron’s chief medical officer, make it possible to treat these patients in Pennsylvania. By 2022, Caron expects to open our second medical center, the Keele Center, which is currently under construction in South Florida.

Finally, I believe there is a lot of work to do in 2021. Our sector must work together to invest in the creation of a standard of care and measurable outcomes so that we can consistently treat substance use disorder as a disease with evidence-based protocols.

Families have been through so much in the past year. We must ensure that life-saving interventions along with a long-term continuum of care are available to position us all for a strong recovery.

— Doug Tieman, President and CEO of Caron Treatment Center

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Throughout 2020, COVID-19 posed unique challenges as it affected access to care and delivery of services to which treatment providers had to respond swiftly. As we move forward, we anticipate that it will continue to be the biggest factor that will shape SUD treatment in 2021.

There is also a resurgence in recognition of the need for racial equity that is shining a light on discriminatory regulations and inequalities in access to care for minority groups.

There will likely be continued expansion and improvement of virtual services throughout 2021, but this will depend to some degree on what virtual services are authorized when COVID-19 is no longer a major threat.

There has been a lot of emphasis on measuring and improving outcomes in SUD treatment over the last few years, and we will likely see the majority of providers implementing new ways to do this in 2021 and beyond.

— Alex Denstman and Greg Hobelmann, co-CEOs of Ashley Addiction Treatment


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