Sunday, June 1, 2025
6/1/2025
Substance use disorder treatment centers and facility ownership changes - Project Summary An estimated 40.3 million adults and adolescents needed treatment for substance use disorders in 2020. Yet only 6.5% of those needing treatment received it. Access to high-quality care remains a significant challenge. In the past decade, private equity (PE) firms have acquired numerous substance use disorder (SUD) treatment facilities, although evidence on the extent of these acquisitions is scarce. SUD treatment centers are attractive targets for private equity acquisition due to increased need for SUD treatment, increased health insurance coverage, and expansions in coverage of SUD treatments, all of which increase demand for treatment. Opportunities for efficiencies due to the fragmented nature of the market and changes to regulations regarding buprenorphine prescribing have the potential to increase profits. Commentators have raised concerns that a focus on short term profits may lead to quality declines in private equity-acquired facilities. Similar acquisitions in other areas of health care have resulted in declines in quality and increases in mortality. In this proposal, we will, for the first time, comprehensively catalog and describe SUD facility acquisitions by private equity investors from 2010-2022. We will we use a quasi-experimental difference in differences research design that leverages differences in the timing of ownership changes to study changes in the delivery of care and patient outcomes. Our interdisciplinary team consisting of faculty from the Yale Schools of Medicine, Management, and Public Health is uniquely suited to study this issue with the methodological and substantive expertise to assess the complex treatment and policy implications. Our specific aims are: (1) To catalog and describe changes in private equity ownership of SUD treatment facilities (2010-2022) and the predictors of such changes; (2) To determine whether private equity acquisition is associated with changes at the organization level including changes in treatments offered (more facilities offering medication for opioid use disorder (MOUD) treatment; fewer facilities offering primary care services or services attractive to complex patients) and changes in the types of insurance accepted; (3) To determine whether private equity acquisition is associated with changes in MOUD use, quality and patient insurance type in acquired facilities. Pressure to increase the volume of commercially insured patients given the significantly higher reimbursement rates may lead to reductions in the number of Medicaid patients treated; (4) To determine whether private equity acquisition is associated with changes in OUD treatment quality and opioid-related adverse events in communities with acquisitions. Ultimately, a goal of an SUD treatment facility is to improve health outcomes. Using commercial insurance data, we will examine changes in treatment quality and health outcomes (OUD-related emergency department visits). To our knowledge no information about the extent and impacts of this change have been documented in the peer-reviewed literature.
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