-ATIN- 10/03/08 - The older adult market of the addiction treatment industry, followed by the young adult market, is the fastest growing market of the business, according to the full version of the 2006 TEDS report, the most up-to-date release of the critical addiction industry information source produced by SAMHSA.

The report shows that, since 1996, the older adult market, 45 years and up, has soared to 22 percent of all admissions from 13 percent, and young adult admissions, 18 years to 24 years, have risen from approximately 14 percent of admissions to 19 percent of admissions, SAMHSA said.

Overall, according to TEDS, industry admissions declined to $1.8M in 2006 from $1.861M admissions in 2005, confirming beyond dobt a trend of downward admissions begun in 2003 after admissions peaked at $1.9M in 2002, a 5 percent decline overall in three years from 2003 to 2006. Between 1996 and 2002, admissions climbed 15.6 percent, or an average of 2.2 percent annually.

The decline in TEDS report admissions is worrisome, especially for the public side of the treatment industry, which are the overwhelming majority of reporting institutions for the TEDS data. And as states grapple with massive budget shortfalls, and local governments increasingly experience revenue problems and lack of access to credit, it is likely that admissions data from TEDS may decline even further and potentially much more sharply.

TEDS admissions trends are much less relevent for the $5 billion or so private side of the addiction treatment industry, for which the outlook is much brighter. Insurance payors, which Treatment Magazine estimates currently provide about half of all revenues for the private sid e of the business, with private pay accounting for the other half, have already cut their in addiction spending to the bone and are unlikely to be able to get away with cutting much more without a major public outcry. And private pay is hurting - witness the 10 percent decline in same facility revenue at CRC's Youth Division, formerly Aspen Education - but is unlikely to fall of a cliff and may even grow a bit as people who need treatment need it no matter what their economic fears.

And private players who concentrate on fast growing sectors may experience strong growth. If struggling South Florida-based Hanley Center, whose low census earlier this year and last indicate big financial losses, can take advantage of its unquestioned position as the leader in older adult care, by far the fastest growing addiction market,  the addiction treatment provider may be able to revive itself and even grow. And smart, highly successful operators, like The Watershed, also in South Florida, are concentrating on young adults, this year launching a specialty primary program aimed at the market, while vastly expanding extended care capabilities that are critical for good outcomes with youth clients.

Newswire Staff

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