Treatment centers are being targeted by investors who see the financial opportunities in the growing sector of the medical industry, according to an article in the Green Bay Press Gazette.
“Of the nearly 22.7 million people who needed treatment for substance addiction in 2013, only 2.5 million actually received it,” wrote Ryan Daniels, a financial analyst with William Blair, in a research note last year. The increase in those needing treatment “is partly driven by nonmedical use of painkillers, from which an addict may move up to heroin as tolerance increases or painkillers become more difficult (and more costly) to find.”
Financial analysts are combing the market for opportunities to invest or merge. Mergers – like that of Hazelden and Betty Ford last year – may become more common in the coming years.
“Relative to other health care services markets, substance abuse treatment is highly fragmented,” Daniels wrote. “We believe the substance abuse treatment industry appears to be in the early innings of one of the largest remaining consolidation opportunities in health care.”