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Why Should We Change?

Why Should We Change?

The current default model of addiction treatment in America is residential rehab for a prolonged stay, often without medical intervention. Insurance companies have been increasingly reluctant to pay for such treatment in the last few years, and rehabs have responded to the decreased compensation with additional services such as in-house labs and pharmacies to deliver margin. The recent decades have been one of conflict between the rehabs and the insurance industry. I don't like conflict, because it's a waste of effort. So I sought a solution without compromise to find a better way for both sides.

Specifically, I've proposed an iterative outpatient treatment system built on a simple biological model of the primary illness of addiction. It works regardless of the reward the patient is using. It is specific to each patient, can be done in an outpatient setting for almost everyone, cuts treatment time, cuts treatment costs, and improves outcomes. I know it works because I was part of building a company around it. In spite of the success of that company, I still encounter resistance to change when I propose the model to those in the residential rehab industry. The big question I always get is, "Why should we change?"

The costs of not changing

If the rehab industry does not change it exposes itself to several severe costs. The insurance companies are already hostile to its model and are becoming increasingly so over time. They object to the standardized lengths of stay, an absence of objective criteria for treatments, and any medically satisfactory explanation for the treatment choices made. Payments for such treatment will continue to decline.

In addition, the industry has been plagued with multiple scandals that have cast, fairly or unfairly, a bad light on the entire group. Patient deaths in understaffed rehabs or rehabs that were medically under supervised, patient purchasing from interventionists or rehab brokers, fraudulent marketing, and fraudulent charging have all left their mark on the rehab industry. Finally, the country is seeing itself in a specific addiction crisis, and, during crises, expectations of actors to fix the crisis always rise. In the initial stages of a war, incompetence in generals is accepted, but as the war progresses and the losses mount, the public demands effective action. The same thing will happen with this crisis. The huge failure rates over the long term will evidence to the public that their dollars spent on rehab are not spent toward their goal.

But we like it here

In spite of these risks to the rehab business model, the rehab industry likes where it's at, especially those companies that have been able to maintain out of network status or get rich people to pay them cash. Such businesses can get up to $1000 a day for residential treatment, far more than insurance will pay. In addition, the rehabs have sometimes bought or merged with laboratories or pharmacies so that they can capture the margin of those associated businesses as well. Aside from money there are other benefits to business as usual. 

Everyone expects there to be a low success rate. Addiction is seen as such a complex disease of mind and body that, to date, people have been well rewarded for trying unsuccessfully to treat patients to voluntarily sustained recovery. When a patient fails or relapses after treatment, it's because "he wasn't ready," or "he just didn't want it enough." Other people in healthcare don't get to blame their failures. It's good work if you can get it.

Addiction treatment, as it's currently practiced in America, is done with a parallel process instead of the sequential process of manufacturing or the rest of medicine. There are standardized curricula, and lengths of stay. There are planned activities and lectures that everyone gets whether they need them today or not. In addiction treatment, the treatment center creates the treatment they want to give and expect the patient to make use of it. There's no need for all that hard thinking that goes into other medical specialties, or even Starbucks for that matter. Of course, they like it here.

The pot of gold

In spite of all that, there's a good reason to change. With the proposed iterative biological outpatient model, treatment would become so fast, so effective, and so attractive to patients that no one would want to go anywhere else. Insurers also wouldn't want to send their insureds anywhere else. Any company that executed this model and expanded it would essentially make everyone else irrelevant over the course of a few years. Currently $4-5 Billion is spent on addiction treatment each year. If only half of that was necessary, that's still at least a $2B annual income to a company that captured the market. It's a big pot of gold.

But it's too hard and it might not work

That might be a lot of gold, but it's too big a risk for most. "If the insurers caught wind that we were trying to do something like that they'd really slash our inpatient reimbursement and we'd be up a creek. We have mortgages, you know!" "We have a brand to protect, and ours is a residential brand." And finally, "If we change now, everyone will think we've been wrong all these years and they may want their money back." I've heard all these and more.

These fears are well founded. In Theory of Constraints, we'd call them Negative Branch Reservations. There are specific ways to solve for these problems, but the skill set and thinking needed isn't the same as that found among those commonly working in the addiction treatment arena. The implementation would require work and a bit of time, but very little investment in money actually. Anyone using the right tools and the right perspective can overcome these. They really aren't the biggest barrier to acceptance.

We don't have a problem

The biggest barrier I've found, the thing that makes it all a non-starter, is that in spite of all the dangers I can see for them, the rehab industry doesn't see a problem. They basically say that the insurance companies' concerns are selfish rather than understandable. They are so mired in "the way we've always done it" that they don't see that their way doesn't fit into anyone's idea of healthcare. In short, they see no risks, and if you don't see the risk, why change? It's odd. They are a group of people who say they are so good at confronting denial in their clients but can't conceive of a problem of their own. I wonder what they'd call that.



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