advertisement

Home » Psych Central Professional » How Data, Technology and Big Business are Changing Everything


How Data, Technology and Big Business are Changing Everything

A major transformation in the addiction treatment field is underway.

Multiple, significant factors are converging to create a new era wherein data, technology and market forces are constructing a new and enhanced path forward.

This transition presents the best opportunity the field of Behavioral Health has experienced in decades to improve treatment success rates, standardize clinical protocols and secure its rightful place as a valid and valued healthcare specialty.

The decisions treatment providers, their financiers and insurance companies will make in this transition will have a profound influence on the addiction treatment space for many years to come.

In order to understand the transformation the field of addiction is currently undergoing, it is important to fully understand the complex mosaic of business and economic interests in the addiction treatment space.

Our nation’s entire healthcare system is undergoing a radical transformation in the provision of healthcare and specifically in addiction treatment. Reimbursement for the provision of care is dramatically changing and rates for addiction treatment services are declining.

One of the most important components for treatment providers to consider is the pervasive position that health insurance companies do not believe many treatment modalities are broadly effective. Because most treatment providers cannot produce data to demonstrate the long-term clinical efficacy of their programs, payers are beginning to scrutinize the value of subsidizing treatment for their members. This may be particularly true of abstinence-based programs.

Mergers and acquisitions by sophisticated private equity firms are increasingly common in the healthcare sector and the addiction treatment field is experiencing the same, resulting in a more consolidated and corporatized industry.

These investor groups have a fiduciary duty and operate to consistently achieve financial performance milestones. A major factor in the surge of mergers and acquisitions is driven by the massive delta between the 22.7 million Americans who need addiction treatment [1] and the 2.5 million Americans who actually receive treatment at a licensed facility [2].

When the number of 20.2 million untreated Americans who fit the criteria for a substance use disorder diagnosis is combined with the rollout of the Affordable Care Act (ACA), astute and savvy investors recognize an enormous opportunity.

Most acquisitions, which are valued by using various financial formulas to arrive at an Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), also factor in toxicology revenue and out-of-network reimbursement rates in order to arrive at purchase prices.

As a revenue generator, toxicology services are rapidly coming to an end. Additionally, out-of-network providers face greater obstacles than ever to being paid by insurance carriers. Reimbursement rates for out-of-network insurance claims are diminishing and insurance companies have implemented long-term, cost-effective strategies to preclude their members from accessing out-of-network providers for treatment.

The terms and quality of many policies provided through the ACA have been disappointing for providers. High deductibles and co-insurance have left some people seeking treatment with coverage that is cost prohibitive and virtually inaccessible.

How Data, Technology and Big Business are Changing Everything

Jacob Levenson

Jacob Levenson is the founder and CEO of Austin-based MAP Health Management, LLC. MAP is the nation’s leader in the provision of a comprehensive, accessible technology platform specifically developed to improve treatment outcomes for individuals treated for Substance Use Disorder, addictions and other behavioral health illnesses. Levenson is a frequent contributor to leading addiction, healthcare IT and population health management publications and was recently recognized by Becker’s Hospital Review as one of the leading healthcare entrepreneurs in the nation. For more information, visit www.thisismap.com.

 

APA Reference
Levenson, J. (2015). How Data, Technology and Big Business are Changing Everything. Psych Central. Retrieved on November 11, 2018, from https://pro.psychcentral.com/how-data-technology-and-big-business-are-changing-everything/

 

Scientifically Reviewed
Last updated: 3 Nov 2015
Last reviewed: By John M. Grohol, Psy.D. on 3 Nov 2015
Published on PsychCentral.com. All rights reserved.