The opioid epidemic has long been a challenging issue both for Americans and the healthcare system that treats them, and the mortality statistics are significant. The American Academy of Family Physicians published research this year showing that, if there's no change in the annual incidence of prescription opioid misuse, annual opioid deaths could hit 82,000 by 2025.
Tackling the issue is a challenge for the healthcare industry, and one thing is clear: To meet that challenge, there's going to need to be an infusion of capital.
From finding new, more cost-effective care delivery models to establishing outpatient addiction treatment programs, there's an opportunity for investors to pump some much needed cash into the efforts to curb opioid misuse. If done correctly, the investors can see a healthy ROI while also helping patients with addiction issues and easing the burden on the healthcare system.
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Healthcare has made some modest strides, but according to Bryan Cote, managing director of Berkeley Research Group's healthcare division, there's still a ways to go.
The news isn't all bad. Cote said that actual access to care is improving, which is a positive sign.
"You have a better urgent care system -- not addiction treatment, but there's more access than there used to be, so at least if someone has an issue, pain or something, they at least have access to something," said Cote. "There's more attention generally to what addiction looks like -- eye color, maybe something on your skin. There's more attention to it from the providers."
The barriers to treatment have dissolved in some ways. Anthem, for example, has eliminated the pre-authorization requirement to get medication assisted treatment, another incremental step forward.
"Where the problems persist is that there's still a flood of patients who aren't getting into treatment, due to stigma primarily," said Cote. "They're in poor economic environments, or there's not enough access. There's a lot of pain, there might be job issues, and patients slip through the cracks, and there's really no accountability. Someone might treat me, but there's no handoff. We're in the second or third inning of that evolution.
"I think the acute emergency community is really stepping up with new ways to find access for patients," he said. "The problem is that it's such a massive population right now with the problem."
WHERE TO INJECT CAPITAL
If an investor wants to ameliorate the issue and needs to know where to focus their capital, one area might be in funding new treatment delivery models that can be more cost effective and have a better outcome. One example would be a home-based addiction treatment program in which patients can receive suboxone, which is used to treat opioid dependency, and counseling around social determinants of health. If these services can be rendered in the patient's home, all the better.
Another avenue may be outpatient therapy.
"Many investors own and operate outpatient therapy programs that offer all kinds of addiction treatment," said Cote. "It would be great if they could add a system of care coordination to it. Maybe they own a bunch of these centers to provide treatment, but maybe they can add in a social health and telehealth care coordination service, where you go into treatment and you're assigned to the care coordinator who's going to be with you from beginning to end. That kind of system I think is needed. Almost like Alcoholics Anonymous, you have trouble and there's someone you can call."
Naturally, there are hurdles to overcome. One would be regulation on a state level -- the licensing of physicians and providers, credentialing, and making sure the providers have all completed the requisite level of education.
Who to report back to could pose another challenge in the form of data collection, reporting outcomes and adverse events. There needs to be an infrastructure of data that ensures the providers and investors keep getting paid.
In the world of residential treatment, there's also the risk of suicide, particularly with patients who have addiction issues. There need to be processes and protocols in place to prevent it from happening, and to address it properly if it ever does happen.
"Another challenge investors are going to have to deal with is, if you look at the trends around the insurers, they're trying to reduce the amount of opioids that are prescribed," said Cote. "So how they're addressing pain can be a problem. If opioid scripts go down and access to opioids and heroin is somehow addressed, then in five or 10 years as an investor, will the volume of patients with addiction go down?
"I want to create a delivery model that can be responsive to substance abuse," he said, "not just sort of singularly focused on opioids. If you're squarely focused on opioids, and focused on residential facilities, that's a riskier play."
Cote said that in five years the addiction treatment business will be even more attractive to investors than it is currently. He pointed to between 20 to 40 consolidation-type transactions that have occured within the last two or three years that deal with medication-assisted treatment.
Not all of those deals ultimately closed -- some were explored and abandoned, due to various factors -- but the very fact that the deals were considered says something about where the space is headed.
"The interest and activity around substance abuse treatment has been significant," Cote said.