Houston, just like other places around the nation, is a region that suffers from a dearth of treatment options for adolescents, a client target group that providers often avoid, or drop, due to myriad difficulties that can lead to vastly higher costs. But insurance reimbursements on the adolescent side - in private markets - often make it tough to tackle the particular difficulties of the sector and deliver quality care at the same time.

There are few industries where matters of public policy are as important as in the addictions industry. Yet a nexus between the two, a place where public policy decision makers and addiction treatment firmly meet, does not appear ever to have formed nor exist in any meaningful way.

This became jaw droppingly obvious when virtually zero dollars of spending were allocated for addictions in recent vast stimulus bills thirsty for good, job creating spend ideas - of which there are plenty in the addictions arena.

Taking over the CEO slot following the controversial departure of Ellen Breyer last spring, Hazelden’s new top executive appears to have hit the ground running. Within a matter of weeks, after the board placed the reins in his hands last November, Mark Mishek had already flown twice to Florida in order to oversee - jump-start?- Hazelden’s incredibly long-running effort to open a center in the key regional private addictions market.

A major and highly key driver of the enormous success of South Florida’s Watershed Treatment Programs has been its highvolume call center, Largely the brainchild and creation of now CEO Chris Crosby, the center is populated largely by employees culled from Delray Beach’s deep pool of recovering alcoholics and addicts, who work in a high energy environment finding help for people answering tens of thousands of calls every month. So successful has the call center been at delivering census that the company's board has seemed content to rely almost solely on it as a marketing channel. But Crosby, whose industry experience spans decades, has seen quick, sudden often hard to explain, drying up of channels. Thus, he has counseled the board to find ways to diversify the sources of the center’s client flow, a recent result of which has been a major alumni relations push.

The success of The River Source in Arizona is proof that the path to prosperity for treatment centers often lies in finding very unique, yet highly successful, approaches to treating those afflicted with the disease of addiction. Located in the town of Mesa, The River Source is situated in one of the most densely populated areas for private pay treatment facilities in the nation, with such well known high end names like Sierra Tucson and The Meadows not far distant, as well as the nexus of affordable centers located in Prescott just a couple of hours drive away.

Late last year, Dr. Jerry Rand joined the people on the critically acclaimed Interventions television show to help treat a very difficult case, one that was right up Dr. Rand’s alley. At well over 2 million viewers, the episode turned out to be the most widely watched in the show’s history, with the patient suffering from a viciously painful form of chronic and acute rheumatoid arthritis.

In the wake of Ellen Breyer’s resignation - she will leave her post as Hazelden’s CEO in early April - the venerable non-profit will be left rudderless at a time when most of the institution’s top management posts, from CFO on down, remain vacant. And the ubiquitous William Cope Moyers, who has become the face of Hazelden as its external affairs VP, has reached a deal with the non-profit’s board to stay on - the board was, by all accounts, very eager to keep Cope Moyers - after he gave his notice to Ellen Breyer last year.

Bill O’Donnell always understood that there are strong and natural links between the high-end addiction treatment business and the spa experience. A major pioneer of high-end treatment as founder of the legendary Sierra Tucson, O’Donnell in the very early 1990s found himself in a tight spot, as did most treatment center operators.

About a couple of years ago, Hythiam Inc. began a critical demonstration pilot of its Prometa Program with the City Court of Gary, Indiana, where for years police and the courts had dealt with a growing and often intractable crack cocaine problem.

A few years ago, Michael Osborne found himself on the skids. Working as a real estate agent, Osborne had, over time, developed a serious gambling habit, which later began exhibiting signs of becoming severely pathological.

Living in the Baltimore area, Osborne found himself badly needing help with his growing gambling addiction. Eventually he found it at a small specialty gambling treatment facility then called Harbour Center.

In the 1970s, Dr. M.K. El-Yousef was on the psychiatry faculty at Vanderbilt University, treating a wide variety of patients and conducting research. While at Vanderbilt, Dr. El-Yousef began to notice a pattern. “Many of the patients that we treated that did not show progress had strong co-occurring problems with substance abuse,” says Dr. El-Yousef, adding that one patient had gone to AA, with outstanding results.

A couple of years ago, veteran healthcare entrepreneur Val Christensen began talks with a Dallas private equity boutique called CIC Partners, which specializes in teaming up with operators in high growth industries. And the industry that Christensen and CIC were talking about, the therapeutic schools and wilderness programs industry, was indeed very high growth, the highest growth sector of behavioral healthcare, in fact.

The Watershed Treatment Programs, a 200-bed inpatient provider based in South Florida, is one of the few private treatment centers left that still garners the vast majority of its revenues from commercial insurance payors, about 80 percent, according to company executives.

In late May, CRC Health Corporation, the nation’s largest addiction treatment provider, held a conference call for investors and analysts to discuss its first quarter operating results.

When it came time to talk numbers, CEO Barry Karlin gave the floor over to Kevin Hogge, CRC’s chief financial officer. Hogge said little about the quarter’s sharply lower margins and soaring interest costs, but he did mention something interesting about the expense side.

Back in the early 1990s, Dr. Douglas Cook was working as medical director of an addiction treatment program at Woodland Hills Hospital in Louisiana. And he was not at all happy with what was happening there.

“It was immensely disheartening,” says Dr. Cook. “The program was what I call a CPA type program, run strictly on the basis of how little could be spent on care and still have what they offered be called treatment.”

For quite a few years, The Watershed Treatment Programs had excellent relations with UnitedHealth, garnering at one point as much as 20 percent of its business from the Minnesota-based health insurance behemoth.

That’s why the Watershed, a 200 bed inpatient provider with most of its operations in South Florida, with another small facility in Texas, was surprised about two years ago when payments from the insurer stopped coming on time.

In 2003, the Caron Foundation swooped into the South Florida addiction treatment marketplace with its purchase, for an undisclosed sum, of the Renaissance Institute, whose founder Sid Goodman is among the pioneers of the Florida Model of treatment, which has been widely imitated in the region and, many think, kick started renewed addiction treatment growth after the dark days of managed care in the early 1990s.

In early 2004, Peter Labaki was approached by a senior clinician at a local Buffalo, NY, outpatient clinic who knew that Labaki had an extensive background in information technology. “I told her that that there were likely plenty of IT vendors who could meet her needs,” says Labaki. “And that’s when I found out that wasn’t the case.” The clinician began to inform Labaki that she had looked at some systems, including Sequest and Anasazi, and had found them wanting. “They appeared to be, in her eyes, far more geared to the mental health side, and didn’t help much at all with the huge paperwork requirements of the New York state addiction regulators.”

Over the past several years, Sequest Technologies has distinguished itself as among the fastest growing and most prominent purveyors of information technology products to the addiction treatment industry, signing deals with scores of top players, including the Hanley Center, Marworth and Seabrook House, among many others.