Investors in addiction treatment will build relationships based on value
Regarding the Nov. 26 feature “Investors pour money into addiction treatment, but quality questions remain” (p. 22), it’s my experience that the private equity groups are among those leading the charge to clean up the treatment industry.
If you analyze that group of investors, all of them are pursuing a combination of in-network relationships with payers, including Medicaid managed care and/or medication-assisted treatment.
While they wouldn’t invest in this industry without confidence of a reasonable return for their investors, they also must contemplate their own exits. They all understand the days of excessive billing and hefty margins are slowly being replaced by fee for value.
These groups are going to make their money by scaling the companies they acquire, and doing so by establishing regional and national relationships based on value and evidence-based standards of care.
Cory Mertz Managing partner Healthcare mergers and acquisitions Mertz Taggart Fort Myers, Fla.