Companies in this industry provide outpatient and residential care and treatment for individuals with mental health and substance abuse illnesses. Major companies include Acadia Healthcare, Hazelden Betty Ford Foundation, and Spectrum Health Systems (all based in the US), along with the Centre for Addiction and Mental Health (Canada), and the Crossroads Centre (Antigua).
Demand for mental health and substance abuse services is driven by availability of new drugs and treatments and funding policies of health care insurance programs. The profitability of individual facilities depends on controlling costs and attracting physician referrals. Large companies have advantages in group purchasing and in marketing to physicians and managed health care companies. Small facilities compete effectively by providing superior patient service, integrating treatment with follow-up procedures, and specializing by treatment or demographic group.
Products, Operations & Technology
Outpatient facilities account for about 55% of industry revenue; residential facilities account for about 45%. Revenue for mental health and substance abuse facilities comes primarily from patient care. Nonprofit organizations such as Hazelden Betty Ford also receive government grants and private contributions. About two-thirds of mental health and substance abuse service providers are nonprofit organizations.