Bain Capital Invests in Methadone Clinics
Once the bane of Mitt Romney's presidential aspirations, the private investment firm sees profit in treating substance abuse.
As attitudes toward substance abuse treatment have become more accepting, treating addiction has increasingly become a billion-dollar business. Bain Capital, the investment firm once headed by former presidential nominee Mitt Romney, has seen the potential in the industry and recently acquired Habit OPCO Inc., the largest chain of substance treatment facilities in Massachusetts.
In March, Governor Deval Patrick declared opiate abuse a public health emergency. In 2012, there were 669,000 heroin users nationwide, nearly a 50 percent jump from 2009, according to the Substance Abuse and Mental Health Services Administration. And as opiate addiction affects more middle-and upper-middle-class people, it’s no wonder that substance abuse treatment is now a $7.7 billion industry, growing at a rate of two percent every year, according to IBISWorld Inc.
Habit OPCO, which has 13 locations from Boston to Springfield, treats about 860 people daily in Boston alone. Bain acquired the clinics for $58 million through CRC Health Corp., the biggest provider of substance abuse treatment and behavioral health services in the country.
While the industry’s growth is promising, treating addicts has never been simple. Habit OPCO charges patients $135 a week for methadone treatment, which includes daily doses of methadone and access to doctors and other services. But it is difficult to predict how addicts’ recoveries will play out in the long run. Though methadone relieves withdrawal symptoms, allowing people to function without getting high, it is not a cure for addiction.
As attitudes toward substance abuse treatment, especially harm reduction approaches like methadone therapy or needle exchanges, become more accepted, the growth potential of this industry could be even higher. “This field, substance abuse, is going to be more changed than any other,” said Deni Carise, deputy chief clinical officer for CRC Health. “We’ve pretty much convinced the country now that this is a health care issue. This isn’t about bad people trying to become good. This is about ill people trying to get well.”
Now that Bain has placed its bets on methadone clinics, the pressure to grow profits at CRC Health and Habit OPCO will surely mount. But Carise is determined to provide the same quality of care now as they did then, without cutting corners. “Frankly, the way to make a lot of money in this particular business is to do it badly,” she said. “We’re just not going to do that.”