Last year, Ozempic took the weight loss industry by storm; could the substance use disorder industry be next? It’s possible, according to some industry insiders. But that’s not the only trend likely to shape 2025.
New drugs, technologies, payer trends and care models set the stage for 2025 to be a transformative year for the SUD industry.
Providers must duel with artificial intelligence (AI) companies for investment dollars. Injectable buprenorphine and digital therapeutics will play a bigger role in treating SUDs than ever before. And collaborative care models may pose a new opportunity for providers.
Still, the upcoming year will include some of the same hurdles and trends as previous years. The industry will continue to grapple with the role of telehealth. Value-based care will continue to show glimmers of a different reimbursement landscape. Labor shortages will still impact staffing.
Despite old and new challenges, the SUD treatment industry may be better equipped than ever to address still-staggering rates of SUDs and overdose deaths. Read on to learn the top trends, opportunities and hurdles that will characterize the SUD treatment industry in 2025.
The trends that will shape the SUD treatment industry in 2025
“I believe we may see growth in the number of methadone clinics operating within our communities. A recent JAMA article compared discontinuation rates between patients on buprenorphine/naloxone and those on methadone, finding that methadone was associated with a lower risk of treatment discontinuation.”
– David C. Guth, Jr., CEO of Centerstone
“The industry will be influenced by health plans and government trends. Forward-leaning Managed Medicaid MCOs will set the pace of change, and we expect the continued evolution of outcomes-based payment models and medical/behavioral health integration. The approach the new administration will take on addiction & mental health policy remains to be seen, but presumptive HHS leader Robert F. Kennedy Jr. and VP elect JD Vance each have lived experience with SUD, and have been vocal advocates for expanding evidence-based care. We hope this sets the stage for a push toward treatment expansion.”
– Stephanie Strong, CEO and founder of Boulder Care
“As new entrants continue to enter the field of behavioral health, competition for highly specialized clinical talent will be more intense compared to some other industries. That competition also changes expectations and relationships between organizations and their talent. Differentiation for patient acquisition is a given in the field, but differentiation for the supply chain of talented individuals and creating the best places to work requires strategic intent.”
– Dr. Joe Lee, president and CEO of Hazelden Betty Ford Foundation
“The broad increase in behavioral health access in the past several years (accelerated the COVID Public Health Emergency and the resulting rise in telehealth care) has led to an increase in access to treatment for those struggling with substance use disorders. This is a great thing. However, in 2025 we expect that the conversation will shift towards quality and cost-efficacy. Health plans across the country are feeling cost pressures associated with Medicaid redetermination and overall rising acuity; they’re rightly pressuring their provider partners to deliver not just services, but outcomes and impact.”
– Cooper Zelnick, chief strategy officer of Groups Recover Together
“We’ll continue to see an evolution of how people access treatment and providers looking for opportunities to meet patients where they are at. As evidence continues to mount, including the research we’ve done, about the benefits of GLP-1 medications to reduce cravings, we will see these more integrated into clinical practice. We’ll also see the movement of more treatment providers expanding their services into primary mental health.”
– John Driscoll, president and CEO of Caron Treatment Centers
“In 2024, we’ve seen payers evolve reimbursement models away from fee-for-service and towards value-based structures (like monthly bundles), while ceasing payments for unnecessary services like drug tests. This has forced many brick-and-mortar models to adapt or close, driving patients to outcomes-based providers on value-based contracts. As SUD providers compete for these contracts on quality and cost, tech-enabled models are winning, and this will continue in 2025 and beyond.”
– Zack Gray, founder and CEO of Ophelia
“My idealism would like to say value-based care because I think fee-for-service is reaching its apex in terms of what it can deliver for outcomes. I think social determinants of health have to be addressed. Housing costs, food costs, everything is just spiraling so high. We’re seeing it in our patient population that they’re strained by non-clinical factors more than ever.”
– Jeff Gershman, CEO of Square Medical Group
The challenges SUD treatment providers are most likely to encounter in 2025
“We’re concerned about the potential reduction in Medicaid budgets. People with OUD are disproportionately covered by Medicaid. If Medicaid budgets shrink, it will impact access to care. This is especially concerning after Medicaid redeterminations have already left people without access to care. In the middle of an opioid epidemic, that’s dangerous. There were more than 80,000 opioid-related deaths in 2023. Protecting people’s access to the care they need, when they need it, is life-saving and necessary.”
– Ankit Gupta, founder and CEO of Bicycle Health
“The increasing prevalence of fentanyl and methamphetamine use continues to present new and unique challenges. Both substances are difficult to treat, and there are currently no FDA-approved medications specifically for methamphetamine use. The evidence-based treatment for methamphetamine addiction is contingency management programs; however, these can be challenging to implement effectively as they require strict adherence to program fidelity to achieve positive outcomes.”
– David C. Guth, Jr., CEO of Centerstone
“GLP-1 drugs have received a lot of attention for their dramatic impact on patients’ BMI and associated benefits (including reductions in cravings). These are incredibly important, life-changing medications and the increased public pressure to cover them could crowd out the ability to fund many other initiatives.”
– Cooper Zelnick, chief strategy officer of Groups Recover Together
“Navigating evolving regulations, especially concerning telehealth and medication-assisted treatments, will require providers to stay informed and adaptable. Additionally, managing operational costs amidst changing reimbursement models and significant cost escalations may pose financial challenges.”
– Chad Koller, divisional vice president of SUD, behavioral health division, at Universal Health Services
“As far as we’ve come as a society in understanding addiction as a disease, we are still battling stigma. There’s more work to be done to break down stigmatizing attitudes in society and among lawmakers so that individuals struggling with SUD can seek treatment without shame or punishment and so that we can continue to effect positive changes in the treatment landscape.
Value-based care changes will present challenges for certain treatment providers, as they will be held accountable for their care quality and their outcomes will be closely evaluated. Individuals will be able to effectively compare providers to their competitors and make wise treatment choices for themselves and their families. Payer reports to Congress will provide further clarity on which providers are delivering value to patients.”
– Dr. Lawrence Weinstein, chief medical officer of American Addiction Centers
“The biggest challenge remains the workforce, workforce, workforce. Not enough people are coming into the industry. The degrees needed, such as a Master of Social Work or Psychology are expensive, and we have an aging workforce. This is a second career for many professionals who work in the field, which means we are aging faster than other industries. Stigma also continues to be a hurdle. The legalization of cannabis and the normalization of microdosing creates challenges moving forward as we’re seeing misuse and addiction increase.”
– John Driscoll, president and CEO of Caron Treatment Centers
The biggest opportunities for SUD treatment providers in 2025
“From a medication standpoint, injectable buprenorphine products will make prescribing and monitoring much easier without the risk of diversion. Additionally, CMS has recently added digital therapeutics for behavioral health to the physician fee schedule, signaling their growing integration as adjuncts to therapeutic services such as counseling and MAT. This development also has the potential to extend workforce capacity. However, it will likely take providers more than a year to adapt to the new billing and workflow processes, so widespread adoption may take time, but an increase in usage is expected.”
– David C. Guth, Jr., CEO of Centerstone
“As MCOs become more discerning about outcomes and quality, providers who deliver meaningful value will capture greater market share. There will be fewer providers operating without accountability for patient success, or conducting excessive drug testing that harms patients and drives up costs. Telemedicine can be leveraged to improve treatment outcomes, reach remote areas, and operate at lower costs. It’s an exciting time for SUD providers to raise the bar and move our industry forward.”
– Stephanie Strong, CEO and founder of Boulder Care
“Technology continues to play a key role in expanding access to care, removing burdens to treatment, and improving workflows to enhance both the patient and staff experience. There are several technologies aimed at improving the patient and staff experience, and we are still in the early days of SUD treatment in adopting new technologies.”
– Jacob Cooper, comprehensive treatment center group president of Acadia Healthcare
“Digital innovations are a promising opportunity in 2025. Leveraging digital tools and platforms can enhance patient engagement and streamline treatment processes. Additionally, the development of collaborative care models is a huge opportunity. Integrating SUD treatment with primary care and mental health services can provide more effective care and better treatment outcomes.”
– Chad Koller, divisional vice president of SUD, behavioral health division, at Universal Health Services
“Artificial Intelligence (AI) presents tremendous opportunities in operational improvements and data mining. Documentation, clinical efficiencies, predictive analytics and the democratization of outcomes data are all very exciting. But there are also risks involved. The governance, security and liability aspects of AI are still underdeveloped. There’s opportunity for improved collaboration around best practices and governance in the behavioral health space, which in turn will accelerate innovation.”
– Dr. Joe Lee, president and CEO of Hazelden Betty Ford Foundation
“We can significantly improve the accessibility of treatment with expanded options for treatment via telemedicine or within the patient’s ecosystem (such as their home). We can also improve long-term outcomes for patients if we have the ability to continue treatment upon discharge by providing care across state lines. We also expect to see more disruptive technology that will appear on the market aimed at improving patients’ engagement, decreasing fragmentation of care, and creating better inter-episode monitoring.”
– Dr. Lawrence Weinstein, chief medical officer of American Addiction Centers
“One of the opportunities I see is the recent focus on the health impacts of alcohol on our health and the continued acceptance of sobriety as a lifestyle. Patients with an alcohol use disorder now entering treatment are extremely medically compromised. Growing awareness of the health risks should begin to encourage health care providers to refer to treatment sooner and may encourage individuals who are struggling to seek support and treatment before they have severe health consequences. As an industry, we need to look at research and best practices across healthcare to identify opportunities to advance addiction treatment.”
– John Driscoll, president and CEO of Caron Treatment Centers
The SUD treatment industry investment outlook for 2025
“There is a ton of growth capital sitting as dry powder. In 2025, I think we’ll see companies that have created sustainable unit economics attract investment, and start to see massive and sustainable growth.”
– Ankit Gupta, founder and CEO of Bicycle Health
“With such significant attention on this topic, I often ask, “How can we sustain momentum to prioritize access to care and reduce barriers so individuals can receive the services they need?” The answer, I believe, lies in building partnerships with community organizations, which play a crucial role in creating easier access and fostering comprehensive care. Additionally, the ongoing research into the neurobiology and neurochemistry of addiction offers exciting opportunities for the development of even more effective treatments.”
– David C. Guth, Jr., CEO of Centerstone
“The need for SUD treatment has never been greater, representing an immense opportunity to help 50 million people. Innovative care delivery models harness technology to reach patients quickly and at scale: offering hope that we can bend the overdose curve that’s been increasing exponentially for five decades. 2025 can be the year we finally change the trajectory.”
– Stephanie Strong, CEO and founder of Boulder Care
“While it’s hard for digital health companies to compete with software and AI for investment dollars, they have a natural advantage over the brick-and-mortar businesses that make up traditional healthcare portfolios. As a result, digital health will go from being shunned by tech VCs to embraced by more traditional (usually later-stage) healthcare investors, seeing lots of available capital in the next few years.”
– Zack Gray, CEO and founder of Ophelia
“The SUD treatment industry is poised for growth, with increasing recognition of the need for comprehensive treatment options. Investments are likely to focus on technological innovations, telehealth expansion, and the development of collaborative care models, presenting promising opportunities for stakeholders.”
– Chad Koller, divisional vice president of SUD, behavioral health division, at Universal Health Services
“I believe that the landscape will continue to shape through both mergers and acquisitions that may accelerate in the coming year. I also foresee many new technology-driven opportunities that will be disruptive to the traditional in-person treatment model and will provide for a better continuity of care and fewer treatment silos. More virtual options will provide a more seamless way for patients to transition between levels of care and keep patients engaged in treatment longer.”
