Center SWOT Analysis
Since the beginning of time, people have had issues with drug and alcohol addiction. As such, no matter how the economy is doing, people will require treatment for substance abuse issues. It is important to note that most insurance companies provide some level of reimbursement for addiction treatment. This allows drug rehabilitation facilities to have a large number of patients at any given time enrolled in either in-patient or outpatient programs.
Additionally, these facilities can generate additional revenues through publicly funded healthcare systems. The gross margins of drug rehab centers are exceptionally high. Given the educational and licensure requirements to launch a new facility, the barriers to entry for addiction treatment centers are relatively high.
Outside of competitive and regulatory issues, there are generally very few weaknesses associated with operating a drug rehab center. The startup and ongoing operating costs are relatively high, but the fees charged to patients, insurance companies, and publicly funded healthcare systems are substantial.
From a competition standpoint, it is imperative that these companies hire the best addiction treatment specialists available in order to ensure that the facility operates at near 100% capacity at all times.
Typically, most operators of drug rehab centers will launch additional locations if they are seeking to expand. For large scale facilities, one of the other ways that these companies grow their revenues is by expanding their outpatient programs. This is accomplished by hiring additional social works, addiction specialists, and medical directors. Given the large opiate problem within the
United States - it is expected that the demand for outpatient programs will continue to grow substantially over the next five to ten years.
The primary threat faced by drug rehab centers is the cutting of reimbursements by private insurance companies, Medicare, and Medicaid. This is an issue faced by all businesses in the healthcare field. However, there are a number of financing companies that will provide families with payment programs for drug and addiction treatment services. It should be noted that families of people that have substance abuse issues will often pay for these programs on their own as well.
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