Substance Use Disorder Executive Outlook: Plan for Economic Pressures, Regulatory Turmoil

In 2023, substance use disorder (SUD) executives forecast retaining and recruiting challenges, more modality flexibility, deeper adoption of data and value-based care and shifting regulatory frameworks.

Behavioral Health Business reached out to top executives in the substance use disorder space to get their insights on two key questions — What will be the defining market forces of 2023? What will your organization do about them?

The responses back include a cornucopia of insights based on what we’ve seen in the years leading into 2023 and what appears to be shaping up just on the horizon.

The responses below were edited for length, clarity and style.

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Value-based care and population health are the future — an approach that focuses on improvements in health, addresses care longitudinally, is driven by high-touch patient-provider relationships, and works with the whole person. In mental health and addiction, these payment and care delivery models are only just emerging, but they have the potential to dramatically improve health and outcomes.

While the expansion of telehealth and virtual care due to the pandemic has been beneficial overall, virtual-only is not the best long-term option for all populations. Specifically, in mental health and addiction treatment, where trusted relationships and longitudinal care are critical to positive outcomes, patients require personalized care plans and access to multiple modalities. Hybrid approaches that include both in-person and virtual options will be de rigueur in 2023.

— Corbin Petro, CEO and Co-founder, Eleanor Health

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Post-pandemic, we have seen an increased acceptance and preference for in-home and virtual health care, creating demand throughout this space. We’re seeing a demand-driven market for home-based options for addiction treatment as well, beyond just telehealth. Patient-centricity, value-based care, and a consumer-driven market are all part of the constellation of forces driving change in health care in 2023.

Aware Recovery Care was thinking ahead when our company conceptualized in-home addiction treatment (I-HAT) prior to the pandemic, back in 2010. We are the pioneers for I-HAT and have set the standard with master service agreements in 10 states nationwide.

We recognize that outcomes improve when we treat the family system in addition to working one-on-one with individuals struggling with substance use issues. By working closely with families as a whole, we are able to explain the disease concept of addiction and the progression of recovery.

Aware Recovery Care will increase access to care by expanding our model in two states annually. By the end of 2025, we will have a presence in 18 states. I’m truly excited about where we’re headed.

— Martha Mather, chief operating officer, Aware Recovery Care

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The uncertainty around the overall economy will be a significant driving force at least for the first half of 2023. It will be interesting to see how the labor markets shake out and whether or not we enter a significant recession. As an organization, this is a good reminder that we must deliver high-quality care in a cost-efficient manner, and we are continually refining our operating processes to ensure that we do so across all of our clinics.

Specific to the behavioral health space, I expect that there will be certain regulatory changes that are codified as we exit the pandemic emergency, especially for telehealth, the X waiver and the ability to prescribe medication outside of the four walls of the clinic. We have continued to develop a robust hybrid model of care that will allow us to be flexible to meet the needs of our patients where they are when they need help. We will need to continue to refine that process and react as regulatory changes come into being.

— Steve Priest, CEO and President, Spero Health

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I see four main trends impacting the market in 2023:

Decreased spending on health care by consumers. With inflation and recession fears, individuals are delaying going to the doctor for non-emergent issues, including their alcohol and substance use. Once they do seek help, they seek the lowest level of care and select services covered by their insurance. At Caron, we want to meet people where they are by increasing access through additional in-network payor agreements, expanding our outpatient offerings and virtual services.

Patients are more medically compromised. Because of these delays, many individuals now entering residential treatment have significant mental and physical comorbidities. Our investment in state-of-the-art facilities and full-time physicians, nurse practitioners and psychologists position Caron to address this care crisis. Most significantly, this January, we are opening The Keele Medical Center in Florida to treat these medically complex patients, including older adults.

Increased demand for mental health services. Caron Treatment Centers recently launched a mental health program in Florida and will open a mental health outpatient program in Pennsylvania in early 2023. We also are increasing mental health services in our residential programs.

More providers will move to value-based insurance agreements with payors. A successful transition to this model requires hard data on patient outcomes, which Caron has been tracking for more than 20 years, and utilizing data from payor partners.

— Kristine Bashore, chief operating officer, Caron Treatment Centers

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As the industry learns from innovators and embraces the benefits of telemedicine, I expect substantial advancements toward high-quality, cost-effective, and sustainable care options. Bicycle Health is playing a key role in this progression: We’re on a mission to deliver accessible recovery treatment for patients with our telemedicine model which has been proven to be effective and helps address significant stigma and cost barriers.

I predict that legislation and key policy amendments will be a driving force in advancing access to telehealth. We’re already seeing mounting pressure from lawmakers and major stakeholders for the Drug Enforcement Administration (DEA) to collaborate with the Department of Health and Human Services (HHS) and enact a special registration process under the Ryan Haight Act that would enable physicians to prescribe controlled substances via telehealth without a prior in-person exam. And with the Biden administration moving to make the Public Health Emergency (PHE) rules permanent, it will make it much easier for patients with opioid use disorder (OUD) to access controlled substances via telehealth. Both are life-saving measures to deliver mental and behavioral health services and treat people with SUDs.

— Ankit Gupta, CEO, Bicycle Health

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We are predicting three key market forces that will define the SUD treatment industry in 2023. First, we expect rollbacks of PHEs to yield telehealth regulatory retrenchment. We’re hopeful that some of the regulatory flexibility around telehealth driven by COVID is codified. That being said, flexibility and meeting individuals where they are should be a goal for all addiction treatment providers going forward. At Groups, that means continuing to invest in offering in-person treatment at our 150+ offices across the country as well as continuing to improve our custom-built virtual app and hybrid offerings.

Second, the PHE expirations will bring widespread Medicaid redeterminations, tightened Medicaid eligibility, and temporary or permanent loss of Medicaid coverage for millions of Americans with SUD. While the timeline remains uncertain, PHEs will expire in 2023. Many individuals with SUD who rely upon Medicaid to access care will lose coverage. Sadly, this is the population that needs accessible, evidence-based care the most. It’s estimated that nearly 12% of Medicaid beneficiaries have a substance use disorder.

Third, in 2023 we predict that continued contamination of America’s illicit drug supply with fentanyl — alongside increases in stimulant and meth use — will blur the lines between different SUDs. This will require treatment providers to think holistically about their offerings. In response, Groups is expanding our clinical model to address primary diagnoses beyond OUD. This begins with an alcohol use disorder (AUD) pilot we hope to expand nationally.

— Colleen Nicewicz, CEO, Groups Recover Together

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With the lifting of in-person visit requirements due to America’s PHE, it’s been easier than ever before to access life-saving care for OUD. We’re hoping our federal government ensures this is made permanent in 2023. However, if pre-COVID in-person requirements return, the addiction treatment industry will suffer a massive shock to the system. Initiating care virtually for OUD patients will become a relic of a bygone COVID-age. Although we hope this does not occur, Workit is prepared for a transition back to in-person care.

Throughout the pandemic, we’ve maintained our brick-and-mortar clinic sites and protocols for in-person treatment. Our priority is accessibility. We always strive to help as many people as possible be that through an in-person meeting or a virtual app.

— Robin Ann McIntosh, CEO and Co-founder, Workit Health

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We believe that the most fundamental market force in 2023 will be continued growth in demand for behavioral health services, particularly among patients with SUD. We anticipate the need for SUD treatment to continue to increase at or above the trajectory we have witnessed in recent years, particularly in the area of OUD.

Acadia is focused on increasing access and tailoring treatment to individual needs and preferences to achieve life-changing results. Over the next two years, Acadia plans to add approximately 20 comprehensive treatment care (CTC) locations to its national network of 148 CTC locations in 32 states. Increased awareness, destigmatization and new sources of funding, including the ongoing disbursement of opioid settlement funds, are key tools to enable greater access to care.

We believe whole-person care can address mental and physical co-morbidities and social determinants of health. Furthermore, those solutions must be tailored to meet local community needs.

— Chris Hunter, CEO, Acadia Healthcare Company Inc.

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Many health care workers have left the field or left direct care positions. Those that have stayed seem to fall into two camps. The first are mission-driven individuals who want to continue to help people and save lives. The second are those who have developed a skill set that is needed and are willing to live outside of their home market all in order to maximize their income.

Our goal is to keep our core staff and build upon this core group. To keep our core, we have updated our market studies to ensure our salaries and benefits remain competitive. We must help our existing staff by attracting and recruiting new top talent to work beside them. So, career ladders to attract new people coming into the field seems to be key.

The proliferation of new, more potent and attractive illicit drugs is of great concern. We need to educate young and old on the perils of drugs that they are unsure of where they came and how dangerous they may be.

Some legislators may listen to the wrong people. At Baymark, we are rallying and developing our people to advocate for high-quality care.

Finally, the economy is a market force to be dealt with in 2023. Inflation affects jobs, purchasing power, mood, behavior, and mental health and addiction. Inflation also impacts businesses as interest rates and increasing costs will have a profound impact on the cost of care and on ability. Fortunately, at Baymark, our recapitalization in 2021 was very timely and we have a strong credit facility in place to continue our growth. We further decided to purchase a cap on our interest rates a while back and that proved to be a very helpful and timely decision as well.

— David White, CEO, BayMark Health Services

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I predict that 2023 will rival, or potentially exceed, the tumult brought on by three years of COVID and a rapidly changing marketplace with significant levels of mergers, acquisitions and organic growth. We at American Addiction Centers (AAC) are preparing for intensified challenges and opportunities arising from factors ranging from worsening workforce challenges to the omnibus spending bill and the ongoing COVID impact to rapid consolidation and growth in addiction treatment and finally, a shift to risk-shared value-based care. It’s clear that companies who continue operating by the same playbook, fail to evolve, and expect to survive are going to fail.

We will have the right plan, the right people and the right product. Some highlights from my roadmap include putting a focus on our workforce, identifying an external strategic advisor to complement internal strategic planning and building upon what is now an excellent clinical product to make a world-leading clinical experience that delivers optimal outcomes.

AAC’s past financial struggles are a good example of what can happen if providers try to fight the ever-changing addiction epidemic with the wrong weapons. The only way to survive and make the greatest impact is to adapt.

— Dr. Tom Britton, CEO, American Addiction Centers