It is no big secret that there is a lot of corruption that has happened in drug and alcohol treatment. I worked in the nonprofit treatment industry for twelve or thirteen years. I was not really that exposed to the wider trends of what was happening in drug and alcohol treatment and in mental health treatment. But as I founded my own place I started to be exposed more to the treatment industry as a whole. I do not even like the term.
Changes to Health Insurance
One of the things that happened was in 2009, Obama passed the Affordable Care Act. There were a couple of small but really important facts around Obamacare. One was, insurance companies were no longer allowed to exclude for preconditions. Before that, if you had cancer or if you had a history of “fill-in-the-blank”, an insurance company said, “We will not give you health insurance because of this.” They could no longer do that.
The other was Parity Laws which meant anything that government healthcare decided to cover private insurance, on Parity, had to cover as well. So suddenly every insurance policy had to cover mental health and substance abuse. Prior to that period, most insurance did not really pay for treatment. You were either getting treatment at the community level or you had money or some really great insurance.
The vast majority of people actually could not even get mental health and substance abuse treatment except at the community level…until Obamacare. And suddenly if you had a PPO plan from Blue Cross Blue Shield or whoever, you could go to residential treatment.
And because of the Parity Laws, at least in the beginning, it would cover full treatment. So suddenly, you could be a middle-class person from Ohio and you can get drug and alcohol treatment in Malibu on the beach. Unbelievable. You would not pay attention to it if you were not working in it.
Enter Corruption, Greed, and Shady Treatment Practices
And it did a few things. Lots of people suddenly had access to treatment. But we live in a capitalistic society…so what happened was suddenly there is a lot of potential money in the system because now you have a couple of hundred million people who have these insurance cards in their wallet that now could be exchanged for money for treatment.
Wow…that set off a very interesting chain reaction. So you have entrepreneurial-minded, generally narcissistic, people that somehow get this information. Maybe a very narcissistic client goes through treatment and instead of focusing on his recovery, he is counting how much money the treatment program is making. Then he goes to his narcissistic wealthy father and says, ‘I think we should open a treatment program’. At six months sober, an individual opens a treatment program.
Then shockingly, because he is shady and he does shady marketing practices, it is successful and lots of people are going there even though the treatment is probably not very good.
Then private equity and venture capitalists think: wow there is a lot of money in this treatment thing and they partner with the narcissistic owners of treatment programs.
Next thing you know, you have five thousand treatment programs open up in Los Angeles between 2009 and 2020. Is it a surprise that a lot of them are not offering good treatment and are somewhat corrupt?
For me, it is a very interesting story because I was supportive of Obamacare. If and when you asked me: Would you like people to be able to get insurance whether they had a precondition or not? I say, yes, I would.
If you said: Would you like drug and alcohol treatment to be covered? I would say, yes that is great, and kind of calculate the full fallout of that kind of choice.
Incentives Creating Barriers to Recovery: The Sad Truth
On the patient’s side, you have patients who have no money but possess an insurance card. They could live in the kind of house they never could live in without that insurance card, on the beach in Malibu. But they actually had to be pretty close to being loaded to be able to qualify to live in that house in Malibu.
So you could imagine that there is a handful–and by a handful, I mean hundreds of thousands of people–who have gone in and out of treatment and continually relapse. They return to these residential and outpatient treatment programs. They have no money, they do not work, they just have this insurance card.
I am sure some of them are doing it consciously–some unconsciously. It really is a story of bad incentives. It is a bad incentive for treatment providers that treat for profit–making money on people’s suffering.
It is a bad incentive on the relapse end that if a client relapses, insurance pays more. Not for the insurance companies but for the treatment providers.
And then it is a bad incentive for clients. I could just live in treatment, go to some groups, and do that for a few years. Then I just relapse. I can go back. I do not have to get a job. I do not have to go through the really arduous task of growing, learning, changing, and recovering. I can take an easy way out as long as I have an insurance card.
It is really problematic. It started to change, the government started to crack down and the treatment community. Obviously, it is not all treatment programs, but it is a really important lesson at the policy level that affects everybody in their daily lives, particularly those people seeking recovery and suffering from addiction.
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