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$42 Billion U.S. Addiction Rehab Industry Poised For Growth, And Challenges

John LaRosa, Research Director
John LaRosa, Research Director

"Drug & alcohol rehab is big business in the United States."

January 29, 2020:   Marketdata LLC, a leading independent market research publisher covering service markets since 1979, has released a new 116-page report entitled: The U.S. Addiction Rehab Industry .  This market study investigates demand for and the dollar value and structure of drug, alcohol and other addiction treatment facilities.  It’s a huge mostly public-funded healthcare sector that has grown rapidly but is beset by problems.
“Drug and alcohol addiction rehab in the United States is big business - $42 billion this year.  There are now 15,000+ private treatment facilities and growing. A total of 3.7 million persons received treatment, but many more need it and facilities are filled to capacity”, according to Research Director, John LaRosa.
Major Findings:

Market Value…  Marketdata analysts estimate that the drug, alcohol and other addictions treatment industry will be worth $42 billion this year.  Moderate but steady 5.2% annual growth in revenues is forecast through 2025, reaching $53 billion. The states provide most of the funding, and insurance coverage has increased.

More than 15,000 specialty treatment facilities compete, taking in $13.9 billion.

With passage of the Affordable Care Act, 3-5 million new patients entered the system in need of substance abuse treatment, resulting in the opening of more treatment centers and “sober homes”, many of which engage in overbilling, patient brokering, and deceptive marketing. The industry needs to be cleaned of bad apples, but reforms could take five years to take full effect.

Certain niches have emerged for the well-heeled that can pay out-of-pocket (think Hollywood celebrities) and new niches are emerging in areas such as: sex addiction, problem gamblers, Internet addiction, nicotine addiction, anxiety disorders, eating disorders, and serving Iraq and Afghanistan war veterans with PTSD.
Destination markets exist in Florida and California, where the mild climate is used as a marketing tool. Lax regulations in California have plagued the industry and its reputation.
Private equity investors are interested in “roll-ups” – where lots of small operators are purchased and consolidated under a corporate umbrella, ultimately resulting in an IPO/going public.
Some large chains exist, but the industry consists of mostly small operators.  The top 9 treatment chains are estimated to capture $1.38 billion in revenues, and operate 214 treatment facilities. These private-for-profit centers treated 1.36 million patients in 2018.
A total of 3.7 million persons were treated in 2018, but there were 21 million persons in need of treatment. Only 11% of substance abusers actually receive treatment.
Fully 71% of patients are treated on an outpatient basis today.
An estimated 53 million Americans aged 12+ were illicit drug abusers in 2018, according to government agencies. An estimated 4-6 million are afected by the opioid epidemic, a figure that has soared in recent years.
“ Too many states have limited regulations in place for treatment facilities and sober homes, which invites abuse and taking advantage of rehab patients, and their insurers. The industry has a lot of work left to clean up its practices…”, according to Research Director, John LaRosa.
About The Study
The U.S. Addiction Rehab Industry , January 2020, is an independently researched study that is 116 pages long, has 36 Tables & Charts, 9 competitor profiles, and costs $1,295. It is also sold by individual chapters. Free brochure and table of contents available. John LaRosa is available for interviews. Contact: Marketdata LLC, 7210 Wareham Drive, Tampa, FL  33647. (813-971-8080). Email: .

This new study examines the nature of the business, types of rehab, reasons for the recent growth of addiction rehab services since the Great Recession and passage of the ACA, national receipts/growth from 1983-2018, 2020 and 2025 forecasts, average facility revenues and operating ratios, industry structure and participation by non-profit, for-profit, inpatient and outpatient programs, extensive drug/alcohol abuser demographics, destination markets in FL and CA, industry history and evolution, and key industry trends and issues, as well as major competitor profiles.
A 19 pp. Overview summary available for $99, at:

Marketdata LLC, is a 41-year old independent market research and consulting firm that publishes market and industry studies covering a wide range of service and healthcare sectors. The company also performs custom research, consulting, teleseminars and conference calls.

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