A New Addiction Crisis: Treatment Centers Face Financial Collapse

By Yuki Noguchi

Published June 15, 2020 at 6:00 AM PDT

Costs have gone up for addiction treatment centers in recent months, as they have had to invest in teletherapy and personal protective gear. "We are at risk for not having the funding that we need to keep our doors open," says one medical director.

Fewer patients in recent months have been showing up for drug and alcohol treatment at REACH Health Services in Baltimore. But Dr. Yngvild Olsen, the medical director there, suspects it's not for good reasons: Some have likely relapsed or delayed drug and alcohol addiction treatment, while others likely fear infection and have stayed home.

Prior to the pandemic, REACH, a program for outpatient treatment of substance use disorder, saw about 15 new patients a week; since quarantine began, that's been down to about 5. Moreover, social-distancing requirements have meant the clinic has been seeing fewer people at a time.

For Olsen, this isn't just a medical worry; it's a business problem. Less money is coming in, while investments in technology for teletherapy and safety protective gear have added new costs.

In the past, Olsen says, the program hasn't had to budget for face shields or gowns or face masks, "because those are things that typically we ... have not really had to ever use."

Olsen, who is also vice president of the American Society of Addiction Medicine, says many providers are in the same boat. Some treatment centers that accept Medicaid patients and and those covered by the Children's Health Insurance Program may be eligible for $15 billion in emergency relief. Still, it's not yet clear how many providers will benefit.

"We are at risk for not having the funding that we need to keep our doors open," Olsen says.

Consumption of drugs and alcohol has increased in the U.S. during the pandemic, creating an anticipated need for treatment in coming months and years. But, at the same time, there are now a host of financial challenges that threaten the existence of most addiction treatment centers in the country.

In April, the National Council for Behavioral Health surveyed its 3,400 members, most of whom are nonprofit community treatment centers. Nearly all — 92.6% of both residential and outpatient centers — had cut back their programs, forcing many to furlough employees or lay them off. A month into the pandemic, two-thirds of those centers said they had enough cash to last three months or less.

"Unfortunately it's, a self-perpetuating cycle," says Chuck Ingoglia, CEO of the council. "You have fewer staff or fewer programs, which means you can treat fewer people," he says, "which then has long term impact on your revenue.

Ingoglia's group and other treatment advocates requested $38.5 billion in emergency funding from Congress, so far unsuccessfully. In addition, he says, a plunging economy also threatens future public funding that many community treatment providers rely on.

"Our members are feeling an awful lot of anxiety right now," he says, not just from the current hardships, but the future, as states confront dramatic budget cuts. "That's going to have implicatoins for treatment capacity down the road."

So the programs have to adapt to survive — mostly by relying on teletherapy.

"The way we deliver treatment is likely to be changed after the epidemic,"
says Nora Volkow, director of the National Institute on Drug Abuse. Prior to the pandemic, neither practitioners nor patients considered telemedicine an adequate substitute for in-person care, she says. "Now everyone uses it. And that is a game changer."

Recent months proved teletherapy is also a cheaper and more efficient way to deliver care, in part because there are fewer "no shows" for appointments. There are also other benefits: For some people, remote therapy can feel more discrete.

"When you can do this via telehealth, including use of a telephone, you take away that stigma," says Elinore McCance-Katz, head of the federal Substance Abuse and Mental Health Services Administration.

Federal and state regulators loosened privacy and other restrictions on telehealth during the pandemic emergency. Among other things, that made it easier for doctors to prescribe medications such as buprenorphine that treat opioid addiction. Now, many addiction centers are banking on those changes becoming permanent. McCance-Katz says she supports that.

"The use of telehealth is something that I hope is here to stay — I certainly will be talking about it," she says, because this method of treatment is likely to play a key role in helping people and treatment centers weather the difficult times.