In­vestors in ad­dic­tion treat­ment will build re­la­tion­ships based on value

Modern Healthcare - - Comment | Letters -

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.

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