Private equity-backed methadone clinics fight efforts to expand access to the lifesaving drug

March 25, 2024

By Don Sapatkin

Plus, two psychiatrists argue that the pandemic is responsible for the funk so many Americans find themselves in. A psychedelic drug selected by artificial intelligence faces a critical test at the FDA. And a prenatal therapy intervention dramatically reduced the likelihood of depression and anxiety in the weeks after giving birth.

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Private equity has bought into hundreds of opioid treatment centers and is fighting calls for reform

“Private equity firms have acquired stakes in nearly one-third of all methadone clinics in recent years, gaining outsize control of the U.S. addiction treatment industry even as the country’s opioid epidemic has developed into a full-fledged public health crisis,” the health news site Stat reported in an eye-opening investigation that shows how PE-backed chains of clinics are lobbying Congress to preserve their exclusive – and highly lucrative − right to dispense methadone. The campaign is aimed at killing bipartisan efforts to increase the disappointingly small 22% of people with addiction who receive treatment by allowing doctors with specialized training in addiction medicine but no association with methadone clinics to prescribe the medicine directly to patients. Methadone is a highly effective treatment for opioid use disorder and has been shown to reduce the risk of a fatal overdose by more than 50%.

The nation’s 2,000 methadone clinics traditionally have been run by local nonprofits or state and tribal governments. But with opioid deaths spiking upward for years – there were more than 80,000 in 2022 − and high demand for addiction treatment, methadone has become a major industry. Now, 65% are operated by for-profit companies. Experts told Stat that PE firms are investing with the expectation that they will increase in value − and generate big profits in the meantime. Acadia Healthcare, a publicly traded behavioral health company not supported by private equity, recently reported earning $500 million annually from its 152 methadone clinics nationwide.The PE firm Waud Capital Partners, which helped found Acadia in 2005, said it made a 12-times return on investment when it sold the last of its shares in 2017.

When a federal initiative began opening outpatient methadone clinics across the country in the 1970s, strict regulations were put in place requiring patients to visit the clinic every day to take their dose of methadone, usually in the presence of a staff member. Regulators feared that methadone, which is itself an opioid, would otherwise be diverted and sold illegally as a recreational drug, leading to more overdoses. Those rules, which discourage many people from seeking treatment, are largely unchanged today, although patients who have proven that they are responsible may eventually be allowed to take home several doses. The for-profit opioid treatment centers fighting to keep the rules in place cite the same safety concerns despite more recent evidence that shows otherwise.

For example, when relaxed emergency regulations during the pandemic allowed patients to take home large quantities of methadone so they wouldn’t need to visit the clinics daily, studies showed that overdoses involving methadone decreased. The Drug Enforcement Administration concluded decades ago that methadone available on the black market is not typically sold as a recreational drug but as a form of guerilla addiction treatment to stave off withdrawal, effectively reducing the use of heroin and, in recent years, fentanyl overdoses. The 50-year-old regulations also mandated participation in frequent counseling sessions and drug testing. There is evidence that methadone accompanied by counseling is more effective than methadone alone. But experts in Europe told Stat’s Lev Facher that drug deaths plummeted when the medications were made easier to access there. (Facher is the investigative reporter behind the series “The War on Recovery,” of which the private equity story is Part 3; Part 4, about methadone access in Europe, will be published tomorrow.)

Facher’s analysis found that proposals to allow methadone to be dispensed by non-methadone-clinic doctors and pharmacies represents an existential threat to the for-profit clinics’ business model. That’s partly because they make more money when patients receive more services, like individual and group counseling, toxicology testing, and case management, which are easiest to deliver when patients attend their clinics in person frequently, regardless of medically necessity. Indeed, Stat’s analysis found that, based on Medicare reimbursement for bundled services as opposed to a week’s worth of methadone, requiring each of a hypothetical clinic’s 125 patients to come in once a month instead of once a week (never mind daily) would lead to $1 million less revenue a year.

Still, the issues are nuanced. Although private equity often is blamed for lowering quality due to cost cutting across many industries, including healthcare, there is no evidence that private equity-owned opioid treatment clinics offer lower-quality care. Most also accept Medicaid, which many independent doctors currently do not. And, as the clinics point out, they are not the only ones seeking to make a profit from addiction treatment. Many of the individual doctors who would be empowered to prescribe methadone if Congress relaxed the rules would also work for private practices or for-profit entities not unlike methadone clinics.

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A quarter of the nation’s children have a mental health condition, accounting for nearly half of all pediatric medical spending, study finds

Spending on children with a mental health diagnosis increased by $4,361 (45%) per child from 2017 to 2021 compared with medical spending on children without a  diagnosis – more than double the 22% increase in the number of children diagnosed with mental disorders over the same period, according to a research letter published in JAMA Network Open. Overall, medical spending for children with one or more mental health conditions was an estimated $31 billion in 2021 – accounting for nearly half of total pediatric medical spending in the U.S., even though children with a mental health disorder made up only a quarter of the nation’s children.

The researchers analyzed data from the Medical Expenditure Panel Survey, a government-sponsored set of nationally representative surveys of families and individuals, their medical providers and employers that contains medical spending, use, and household demographic information. The study sample included 9 million children ages 5 to 17 with a mental health diagnosis. The findings illustrate “the burden of soaring medical costs associated with traditional care for children with mental health conditions and their families,” Naomi Allen, CEO of Brightline, a behavioral health research and services provider that employs most of the study team, said in a press release.

Alex Briscoe, the principal at California Children’s Trust, a nonprofit initiative that seeks to improve child well-being through policy and systems reform who was not involved with the study, said he wasn’t surprised by the finding that nearly half of pediatric spending went to children with mental health diagnoses. Taking a big-picture view in an interview with my colleague Rob Waters, Briscoe blamed a “toxic culture” obsessed with wealth and fame that “refuses to address the impact in the formative years of structural inequality on the developmental context of children, like race and class…The only way out, I sometimes say, [is] you have to teach young people to resist the toxic messages of this culture.”

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The pandemic is not behind us. It’s responsible for our pervasive sense things are not OK, two psychiatrists write.

Americans are in a funk. We ignore exhortations that a sky-high stock market and the lowest unemployment rates in a half-century are great news. Even political analysts say that the painful, two-year surge in inflation that began in 2021, immigration issues at the southern border and the brutal wars in Ukraine and Gaza can’t fully explain the depth of the national malaise. Geoge Makari and Richard A. Friedman believe that we’re all overlooking a crucial factor: COVID-19 brought the country to its knees four years ago, killing more than a million people, hospitalizing nearly seven times that number, shutting down schools and forcing people into social isolation. Much of the country was plunged into a state of high anxiety almost overnight, soon followed by grief and mourning.

“As clinical psychiatrists, we see the effects of such emotional turmoil every day, and we know that when it’s not properly processed, it can result in a general sense of unhappiness and anger − exactly the negative emotional state that might lead a nation to misperceive its fortunes,” they write in The Atlantic. Makari, director of the DeWitt Wallace Institute of Psychiatry at Weill Cornell Medical and Friedman, a professor of clinical psychiatry at Weill Cornell, don’t believe that PTSD is rampant. When faced with an overwhelming and painful reality, however, they say that a sort of forgetting is a useful, even somewhat healthy way for people to temporarily push aside their fear and stress and focus on the demands and pleasures of everyday life. This restores a sense of control so that their losses become manageable rather than overpowering.

But there’s a downside to negating painful memories and proceeding as if everything is normal: It contorts your emotional life and can have unanticipated effects. In its overwhelming scope and severity, Makari and Friedman write, the pandemic rendered most Americans unable to defend themselves and, at times, to comprehend what was happening – meeting the clinical definition of trauma. Traumatic memories alter the ways people recall the past and consider the future. The surfacing of a traumatic memory, disconnected from its origin – that anxious worrying, say, that you could inadvertently kill your grandparents just by visiting − leaves its owner searching for an explanation. There are plenty of other things to blame, from the price of gas to the country’s leadership.

In fact, “Joe Biden is paying the price for America’s unprocessed COVID grief,” the magazine notes. President Biden has been out front in the return-to-normalcy campaign. And over the past two years, pretty much all of us have tried to move forward as if everyone is back to normal, Makari and Friedman write, when in fact “American minds and hearts simply aren’t ready – whether we realize it or not.” The psychiatrists believe that the nation – and Biden’s political future – would be better off if he forcefully reminded us of the dark years of the pandemic, letting rituals of mourning and remembrance help people connect and share their grief so they can return more clear-eyed to face daily life. As they wrote, “By prompting Americans to remember what we endured together, paradoxically, Biden could help free all of us to more fully experience the present.”

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In other news…

A psychedelic drug selected by AI for its promise to precisely target mental illness could be approved for a clinical trial soon, the Politico Future Pulse newsletter reported. The FDA is considering Mindstate Design Labs’ application for a trial of the drug 5-MeO-MiPT, also known as moxy. Approval, which is far from guaranteed, would boost two hot areas in drug development: artificial intelligence, which drugmakers hope will help get products to market more quickly, and psychedelics, which are believed to be possible treatments for mental health conditions like PTSD and depression. San Francisco-based Mindstate said it picked the drug using an AI model it built and trained on more than 70,000 “trip reports” of people using psychedelics that were pulled from drug forums, books, clinical trials, Reddit and the dark web.

A prenatal behavioral therapy-based intervention from non-clinicians that was given to women with anxiety was associated with 81% lower odds of experiencing a major depressive episode six weeks after delivery and 74% lower odds of moderate-to-severe anxiety compared with a control group that received enhanced routine pregnancy care, according to study findings in Nature Medicine. The randomized study of 755 women took place in Pakistan. Participants in the treatment arm received six weekly individual and family sessions beginning when they were less than 22 weeks pregnant, with an option to add up to six, where they practiced recognizing and changing unhealthy thoughts and behaviors to helpful ones. The non-clinical professionals had completed four years of higher education and 50 hours of classroom instruction on counseling skills. The findings about the benefits provided by non-clinical healthcare workers reminded me of Celeste Hamilton Dennis’s story in MindSite News about the benefits of Black doulas, who tend to the physical and emotional needs of Black women and others during pregnancy, childbirth and beyond.

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If you or someone you know is in crisis or experiencing suicidal thoughts, call or text 988 to reach the 988 Suicide & Crisis Lifeline and connect in English or Spanish. If you’re a veteran press 1. If you’re deaf or hard of hearing dial 711, then 988. Services are free and available 24/7.

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