|The Addiction Market's Sweet Spot|
|Written by Ted Jackson|
For years, we at Treatment Magazine have watched as one addiction treatment entrepreneur and investor after another focused their time, energy and capital on the high-end of the addiction treatment marketplace. CRC abandoned its affordable moniker after buying Sierra Tuscon in 2005, and even affordable care icons like The Right Stepâ€™s George Joseph have caught margin fever, with Joseph having recently opened Spirit Lodge on eight acres in the Texas Hill Country.
In numerous conversations with my friend George, I have attempted to point out to him that he has the most respected affordable care model in the nation, and that perhaps he should direct his capital raising efforts and entrepreneurial energy toward taking the model national, finally achieving what Parkside attempted, but ultimately failed at as leverage and managed care wrought their apocolypse on the treatment industry in the early 1990s. But all George wanted to talk about were the much better margins contained in the Spirit Lodge business plan, failing to see that he might already be sitting on the biggest gold mine in the addiction treatment marketplace. We at Treatment Magazine have for some time believed that scaleable affordable addiction treatment models are located right smack in the middle of the sweet spot of the market for addiction treatment products and services. The majority of industry growth over the next 20 years is likely to come from chipping away at the enormous Treatment Gap, an effort that will be funded by enticing commercial payors with highly effective and very affordable treatment products. As affordable newcomer Townsend Recovery understands, ultimately scale overruns margins everytime.
Interesting - where do you place Valley Hope? I think they do this exactly
written by Catherine Waters, May 17, 2010