Author`s name Dmitry Sudakov

Bain Capital's grip on addiction - The profit of 12-step treatment

By Jamie Wendland

Last year nearly 2.5 million people 12 years of age or older sought treatment for substance abuse in the U.S., according to the National Survey on Drugs and Health. 2.3 million Americans obtained inpatient care, and it was reported by the AP that this number is expected to double under the Affordable Healthcare Act.

The National Institute of Health estimates that 15% of Americans suffer the disease of alcoholism, and other estimates run as high as 30%. The National Institute of Alcohol Abuse And Alcoholism reports that, in America, 5-10% of males and 3-5% of women will at some point face alcohol abuse.  So serious is the disease, that the World Health Organization estimates that 1 in 25 deaths worldwide are the result of alcoholism.

There is little argument or question today that substance abuse is a serious problem and a deadly medical condition. But rarely do substance abuse treatment centers mention medical, psychological or pharmaceutical approaches to treatment; instead visitors to websites are almost always greeted with the words, "We are a 12-step based program."

Alcoholics Anonymous and its 12-steps to righteous and disciplined living is the primary core of preferred treatment in over 90% of every outpatient and inpatient facility. Additionally, The National Institute of Health indicates that 36% of all 12-step-based inpatient treatment is court ordered or referred.

The success of this 12-step 'treatment' is so dubious, however, that the AA General Service's own statistics, which obviously wish to portray AA in a positive light, admit that less than 5% of first-time attendees continue after the first year and most relapse multiple times. At best, your odds of staying sober through the 12-steps are perhaps 1 in 19, and the success rate of treatment facilities is even lower.

Currently there are no uniform standardized methods for treatment that are required of service providers.  Other for than licensed counselors with minimal medical training, there is very little regulation regarding actual treatment methods or requiring the offering of medical options such as Vivitol or Antabuse.  

Instead it's a mish-mash of state regulations which are largely administrative, with tougher standards regarding room and board or criteria for patient disclosure than actual treatment. Although most states offer 'recommendations," they aren't followed and the treatment industry is seemingly trusted to develop their own concepts of 'treatment,' often meeting only the minimum government recommended standard.

Take the Wisconsin Bureau of Mental Health and Substance Abuse recommendations for AODA counselors and therapists. The bureau's website states that adequate and complete treatment for addiction should include; "Cognitive Behavior Therapy, Motivational Enhancement Therapy, Community Reinforcement Approach, Contingency Management, AA 12-Step Facilitation Therapy, Pharmacotherapy, Biofeedback, Relapse Prevention, and Multidimensional Therapy."

While the 12-step method is included, it's only part of the larger treatment plan, but these are only recommendations and not requirements.  At most treatment centers it's strictly one size fits all, and that is the AA 12-step-based model.

Few rehab centers list Ph.D. psychologists or psychiatrists on staff and many counselors are tech college graduates with Associates Degrees or a B.A. On occasion, you may find one therapist with a Master's degree, and it's easy to understand why.

According to, the median salary of a counselor with an Associate's degree is $34,340, compared with $96,500 for a Ph.D.-level practitioner. A psychiatrist would cost right around $200,000.  

But, the reality is, you don't need a PhD or a psychiatrist in order to "take a fearless and thorough moral inventory of yourself," as  almost all treatment center curricula consists mainly of learning to regularly attend AA meetings and completing the first four steps before graduating the 28-day treatment program.

"Ninety meetings in ninety days," is the catch phrase most oft recited in rehab.

"What we have in this country is a washing-machine model of addiction treatment," A. Thomas McClellan, chief executive of the nonprofit Treatment Research Institute, based in Philadelphia told The New York Times. "You go to Shady Acres for 30 days or to some clinic for 60 visits or 60 doses, whatever it is. And then you're discharged and everyone's crying and hugging and feeling proud - and you're supposed to be cured."

It's pretty clear then why opportunistic corporations and shrewd investors are preying upon an ignorant public, medical community and criminal justice system. Treatment facilities are unregulated, expensive snake oil salesmen pitching a self-help 'cure' for a medical condition. 

Substance abuse treatment is a $7.7 billion-dollar industry according to New York research firm IBISWorld Inc.  Small wonder why in 2006, Bain Capital eagerly obtained CRC, the nation's largest single provider of substance abuse treatment and services, according to Bloomberg's Magazine.

SEC Form 10-K reveals as of 2012, CRC operated 29 inpatient, 57 comprehensive treatment facilities and 16 outpatient clinics in 21 states. It doesn't end there. CRC's youth division includes 15 adolescent and young adult programs in 6 states. Bain's CRC also operates 17 weight management facilities in eight states and one in the UK.

The cost of inpatient 12-step based treatment averages $25, 166 and because it isn't very effective relapse is almost guaranteed. Although centers rarely state any hard data regarding anything, best estimates indicate that the average addict repeats treatment eight times or more.

Furthermore, The Partnership at quotes the AP as reporting that this substance abuse treatment is largely publically funded.

The government's own Alcohol and Drug Services Studies (ADSS) revealed that 86% of substance abuse facilities receive public funding, with a median of 62% regularly receiving public funding.

Corporate money grabbers are eager to jump on the addiction treatment bandwagon because few question the methods and programs are cheap to operate and very profitable. Simply have patients repeat, "I am powerless over alcohol and my life has become unmanageable" enough times, then hand them a meeting list and they're cured. 

That is until the court to treatment pipeline sends them through again and with county funding. 

Well-intentioned judges don't really understand addiction or its effective treatment so they continue to order defendants to what they're vaguely familiar with-Alcoholics Anonymous and 12-step-based treatment.

Due in large part to increased court ordered treatment; CRC alone boasts an annual growth of 2-2% with patient revenue of $452.3 million, with 20.9% it government funded.

Even if the patient doesn't qualify for public funding, there really isn't a problem. 12-step treatment centers are slick operators who know just which philanthropic agencies and good hearted churches to turn to, and keep a list of contacts. 

Unlike medical facilities, treatment centers demand payment up front, so they're a no-lose investment for vultures like Bain. They've already got the cash even if a patient drops out of the program. Overflowing with a steady stream of state and privately funded clients, the opportunities for profit just keep growing.

The courts are more than happy to accommodate this.

Recently, the national trend has been a more sympathetic tone toward heroin addicts. Even conservative governors such as Wisconsin's Scott Walker are advocating court-ordered and publically funded treatment.

Not one to miss out on easy financial growth, Bain is eager to jump on board.

The Boston Globe reports the Massachusetts investment giant also recently acquired Habit OPET, the state's largest chain of substance abuse treatment facilities. Through CRC, Bain pumped $58 million into the purchase of the for-profit centers.

Bain really has a diverse portfolio; Dunkin' Donuts to methadone clinics.

As with inpatient substance abuse treatment facilities, state are sketchy and federal requirements for methadone clinics are incredibly low.

Dr. Ken Hill, director of the Substance Abuse Consultation Services in Belmont, Mass., lamented, "The problem I find with some of the for-profit clinics is the absolute minimum required by law becomes the absolute maximum they're willing to do for their patients."

This isn't to say that there isn't quality substance abuse treatment available and based on solid medical science and some states, notably Oregon, are implementing evidence based treatment.

There's also non-profit methadone clinics such Dr. Hills at McClean Hospital, and facilities such as St. Jude Retreats of Upstate New York, which isn't 12-step based and touts a 62% success rate. Compared to the estimated (at best) 5% of 12-step based treatment, which is really hard to accurately gauge because most are unwilling to even share that data.

Substance abuse treatment has been hijacked by corporations and shrewd investors because it remains a minimally regulated or monitored industry. Strict treatment standards developed by modern addiction and psychological experts need to be implemented and enforced, just as there is for any other medical care provider. 

When Bain Capital is so eager to invest in 12-step treatment, it's a fairly good indicator that it's probably a scam. Bain is interested only in one thing and it certainly isn't treating substance abuse.

While it may play a role and may very well be beneficial to some addicts, the 12-step, religious principles of AA are not sound or proven medical, evidence based science.

It simply cannot be at the core of publically funded addiction treatment in the twenty-first century.

Jamie Wendland