Should The Whopping $35 Billion Rehab Industry Prepare for Disruption?

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Hollywood producer Scott Steindorff believes the $35 Billion Rehab Industry should brace themselves. Steindorff said, “The rehab industry needs to be disrupted the same way Uber disrupted the taxi cab industry.” But can this be done? Steindorff works along side with other leaders in the industry to try and modernize the principals that were developed in the 1930″s from Alcoholics Anonymous. Steindorff also says “Rehab doesn’t work. Your taking a lot of money, giving a lot of people a lot of false hope and what I have found consistently across the map is a high failure rate of people staying sober after rehab.” This statement is also backed up by the recent studies printed in the New York Times it shows that “looking at relapse rates found that only 46 percent of people who attended residential drug treatment stay in recovery.” Why is this? What is causing this bounce back rate to increase? The relapse rate to increase? And what is there to do about it?

Rehab spokesperson and Vice President at Hazelden Betty Ford Foundation – the nation’s largest non-profit organization – Nick Motu says “well you have to define what failure is – for instance, if you define failure as relapse. But that’s not how we define failure as a relapse. Relapse can be a part of the disease process and unfortunately like any other disease, relapse will happen. However we strive for abstinence. That’s our ultimate goal.” What is unsettling about today’s recovery industry is not just that most facilities are far from the distinguished Betty Ford Center, but also the other horrors infesting the industry. For example, Kenny Chatman was given a 27 1/2 year sentence for engaging in human trafficking, arranging rapes, turning his patients into prostitutes, and allowing anyone to do drugs in his homes he called “sober.” All as long as he could keep milking the patients insurance companies for millions of dollars. “Worse than a pedophile.” Said the father of one of Chatman’s victims. Please remember that Chatman has no experience in drug treatment. His first sober home was opened in 2012, and Florida’s Department of Children and Families somehow thought it would be adequate for him to open a second facility last year. Chatman’s lawyer Saam Zangeneh created a defense that perfectly articulates and summarizes the crisis in the industry across the country: “He walked into an industry that was infected. He became another infected member.”


Or, he played into the infectious industry only aiding to the plague and creating more chaos himself. What remains to be unseen is whether or not the corrupted, sick, billions-in-funds industry can recover from this. For the time being, recognizing, identifying, and calling out the abominations that the outsiders are unaware of. These outsiders are the one’s truly falling victim, the combined lack of knowledge and need for getting a loved one treatment is the deadly concoction. The opioid epidemic has reached historical proportions, taking 91 lives each day. What is even more frightening is what Mark Chalos, a lawyer counseling Tennessee counties considering lawsuits, told about the unofficial numbers. He talked about that some places can no longer afford the autopsies for every death that might be an overdose, so he concludes the count “is just the floor.” Which is essentially telling us, those numbers are higher.

100 states and cities are suing the drug companies and distributors that have brought opioids to the market. The National Institute of Drug Abuse estimates 75% of people who enter recovery treatment for heroin, originally took a doctor’s script for an opioid. The cases argue that the marketing is deceptive, not giving enough clarification on how dangerously addictive pills can be. Of course, the drug companies rebuttal with claims of taking steps to prevent addiction and fight overdose. Purdue Pharma made a statement to NBC saying “We are an industry leader in the development of abuse-deterrent technology, advocating for the use of prescription drug monitoring programs and supporting access to Naloxone—all important components for combating the opioid crisis.” Now, medication-assisted treatment is in fact changing the game, but is still confronted with stigma. The country seems to still be on the fence when it comes to the treatment, even though many have proven it to be effective. In an article on in reference to a recovering heroin addict, they write ”

Today, not only does Hansen think this form of treatment is effective, but he readily argues — as the scientific evidence overwhelmingly shows— that it’s the best form of treatment for opioid addiction. Scott Gottlieb, Commissioner of the Food and Drug Administration is being commended for supporting the development of long-term medication-assisted treatment. Standing up for the movement that knows that the half a million opioid deaths over the past 20 years seem to require more of a medication based approach, rather than using a “higher power” to assist you through it.

The Affordable Care Act and the Mental Health Parity and Addiction Equity Act ensures that drug relapse is always covered under your benefits, and never as a pre-existing condition. This sounds incredible at first, but when looking into the Act the flaws are countless. This Act has created a new industry… for business. Now that more individuals are becoming eligible, it is the old supply in demand spiel. In an article on they stated “Fueled by new financial benefits in federal law, private drug treatment providers have flourished, as marketers often push individuals with substance use disorder to the warm weather states of Florida, Arizona and California as recovery destinations. The unethical players within the recovery industry see the addict as a valuable commodity and have exploited federal law to foster a cycle of relapse, rather than recovery.” Insurance companies bargain back and forth with these recovery facilities negotiating price points, meaning less money coming in, and a lower quality of care. The sad truth is that what we wanted to provide – something beautiful and beneficial to suffering families across the United States – is plagued with greed and collusion. And that isn’t even the most tumultuous of rehab headlines. With horrendous scandal after horrendous scandal tormenting the treatment industry, particularly in California claiming it’s nickname “Rehab Riviera” and even Palm Beach Florida named “Gold Rush.” Rehab Reform Advocate Ryan Hampton said “A lot of bad players are sucking up as much business as they can putting people through the revolving doors of treatment.” “It used to be, ‘You want treatment? Let’s go to Betty Ford.’ Now, there are thousands of options to go to. It’s a cesspool. Nobody knows if they’re going to a good place or not. It’s insane, and it’s sad, and it’s just the Wild, Wild West.”

Places Like Hazelden Betty Ford are loosing on clientele to these pop-up-shops that want nothing but to make a pretty penny off an ongoing, nationwide epidemic. The famous Betty Ford Clinic merged with Hazelden in 2014 and still needed to announce job reduction in October of 2017 as they are trying to adapt to the new financial landscape these scammers have created. When Spokesman Motu was asked if these problems are a pressuring issue for Betty Ford, Motu stated “Absolutely. We have witnessed first-hand some of the issues, and it’s not fair to the consumer, and that’s ultimately who we’re trying to protect here. It is a concern that people’s experience at some of these facilities is not a quality experience, and as a result, their recovery is inhibited and sometimes fails. And failure can either be a relapse or they can die.” With Betty Ford experiencing it’s share of turbulence over the years, Motu says that they are in more of a “transition” period than a “disruption.” For their 16 facilities nationwide, they are holding themselves to a higher standard. Making sure they are implementing programs like the medication-assisted treatments, and focusing on recovery. That’s the way it should be, right?

“We have a program called Cor-12 that we started about four and a half years ago and preliminary results show that after six months, 72 percent of the patients that are involved in that opioid addiction treatment program are abstinent,” Motu says. “So we feel we’re delivering great value.” Veterans of rehab say they can no longer recognize today’s industry. Anna David, New York Times Bestseller of six books about recovery and CEO of (which helps people tell their own stories about recovery) says “I went to rehab in 2000, and it saved my life,” “I would not be sober without rehab. That’s what led me to AA, and I would not be sober without AA. That is not the experience of many people I know who leave rehab today because the industry is so rife with immorality. I think what happened is that many people who went to rehab got 30 days of sobriety, realized how much money people were making and then got the bright idea to start their own rehabs. Some of these are good people. Some are in it purely for the money, and that’s corrupted everything.” Wouldn’t you think after all the heat the industry is getting someone thought to do something about it? Well, someone did. Brad Lamm who created “Fair Care Promise” which is an ethical pledge for treatment providers on his website He points out the challenges the Hazelden Betty Ford Foundation faces, as they are fighting for the greater industry. “They operated under this old-school model,” Lamm says. “They had excellent care. They had an excellent figurehead in Betty Ford. They didn’t do a lot of marketing. She was very involved in the alumni so they had all these little disciples all over the world where clients were coming in. It was world-class, all-cash pay. What they did worked for a long time, but everything has changed.” The Hazelden Betty Ford Foundation is doing everything right with quality of care during and after the treatments. But this isn’t enough. As Rehab Reform Activist Hampton calls it a “perfect storm” of circumstances affecting the industry today.

All in all, more people need treatment then ever before. Two million Americans are addicted to prescription opioids and at east one million to heroin (according to the Center for Disease Control). And the #35 Billion rehab industry is taking advantage of those who really need help the most. Right now 29 states do have rehab reform legislation (even the licensure of patient brokering where treatment facilities pay a fee to “junkie-hunters.”), but that doesn’t suffice. SB636 is a bill that is proposed to address the issues proposing legislation to tighten regulation around California treatment providers. While this is good, again, this is not enough. Activist Hampton works with Recovery Reform Now, aiding to apply pressure to California legislature in January, making patient brokering an insurance violation. Hampton says “I got led into this as a result of a lot of my friends being brokered,” “I’m seeing my friends traded like horses and their insurance plans being left for carcasses, and I was like, ‘Oh my God, what is going on here?’ And it’s completely legal in California.”


While Hampton is doing something about this, we all can too. The industry that was meant to heal, meant to be pure and good, has quickly turned into a greed infested industry. Where facility owners care more about the insurance checks, than the patients checking in. So, should the $35 Billion Rehab Industry brace for disruption? The answer is yes. Awareness, exploitation, and action will be the disruption and hopefully downfall of this recently corrupted industry.