By Sydney P. Freedberg
Bloomberg, February 7, 2013
After Jennifer Vanlieu turned to methadone treatment to beat an addiction to heroin and pain pills, she morphed from drug user to convicted drug dealer.
Vanlieu said she got a carryout methadone dose at a clinic operated by CRC Health Corp. in Richmond, Indiana, in March, 2010, and then gave about 15 milligrams to her friend Carissa Plemons. Plemons died hours later, after ingesting a lethal mix of methadone and other drugs, according to police reports.
CRC is owned by Boston-based Bain Capital Partners LLC and is the largest U.S. provider of methadone treatment.
Liquid methadone, used for decades to help addicts abate withdrawal symptoms as they quit heroin or other opiates, is leaking into illegal street sales via take-home doses, according to law-enforcement officials in Indiana, Kentucky, Virginia and West Virginia. Investigators in each of those states have linked such “diverted” doses to clinics operated by CRC.
Some former employees say the company, which operated 57 clinics in 15 states last year, works to maintain high enrollments despite chronic understaffing, increasing both CRC’s profitability and the chance that its take-home methadone doses will be abused.
In the small towns where CRC has clinics, its methadone has surfaced in criminal cases, police and prosecutors say. Dearborn County, Indiana, officials are planning a $10 million expansion to the local jail, needed partly because of crimes tied to CRC’s clinic in Lawrenceburg, said prosecutor F. Aaron Negangard.
Since Jan. 1, 2009, CRC’s clinics haven’t met staffing standards more than 50 times, regulatory records from 15 states show. Clinics were cited 80 times for failing to document that they gave patients enough counseling.
Until recently, there was little difference between the operations of for-profit and non-profit methadone clinics, said Thomas D’Aunno, a professor of health policy and management at Columbia University who has tracked the treatment centers for years. That changed in 2011 survey data, which showed “significant differences,” he said: For-profit clinics had fewer staffers than public clinics.
By 2010, for-profit providers controlled 52.8 percent of the 1,200 U.S. clinics.
Over the past seven years, private equity firms have invested more than $2.2 billion in substance-abuse treatment and behavioral health companies in 62 deals, according to PitchBook Data Inc., a Seattle-based research firm.
Addiction-treatment companies are “some of the most sought-after — and valuable — acquisition candidates in health care,” partly because of profit margins that can top 20 percent, according to the Braff Group, a Pittsburgh-based mergers and acquisitions advisory firm.
Bain Capital, the private equity firm co-founded by former Republican presidential candidate Mitt Romney, paid $723 million for CRC in 2006, corporate filings show. Romney, who left Bain in 1999, had no input in its investments or management of companies after that, he has said. Still, Romney reported last year that he owned more than $1 million worth of a Bain fund that holds most of CRC’s shares. He reported receiving between $100,000 and $1 million in dividends, interest and capital gains from that holding, as well as income from two other Bain funds with interests in CRC, according to the financial disclosure he filed with the U.S. Office of Government Ethics in June.
Once they’ve helped addicts quit other drugs, for-profit clinics have a built-in incentive that may hurt their patients’ chances of ending their dependence on methadone, said Rod Bragg, assistant commissioner of Tennessee’s Department of Mental Health and Substance Abuse Services.
“With a nonprofit, the incentive is to get people to treatment and wean them off,” Bragg said. “When you have a for-profit and cash-only business, there is no incentive to detox them. In fact, there’s an incentive not to detox them because of the continual cash flow.”
In 2010, 4,577 people died of overdoses involving methadone.
By Don McCanne, M.D.
Most enlightened observers of the health care scene understand that a single payer system would bring much greater equity and efficiency to the financing of our health care system – controlling costs while ensuring adequate health care for everyone. Yet frequently at demonstrations we also see placards that state, “PATIENTS, NOT PROFITS.” What does that mean?
There is no problem with “profits” that represent reasonable incomes of health care professionals after other expenses are met, or that represent operational margins of nonprofit institutions that are really not much more than an accounting entry.
The problem with profits in health care arises when the interests of for-profit corporate executives and their passive investors are placed before those of the patients served by the enterprise – a priority founded in our nation’s laws.
Innumerable studies have demonstrated that, in health care, the profit motive increases costs while impairing processes and outcomes. We pay more for worse care. That is why Physicians for a National Health Program includes in their single payer model of reform the removal of for-profit enterprises from our health care system.
Bain Capital’s acquisition of a chain of methadone clinics represents not only the evils of for-profit health care, but also the greater societal issue of an economy in which we place the highest priority on moving wealth from the workers to the very rich. Bain’s methadone clinics are not only making Mitt Romney and his ilk much wealthier, their profit-oriented business decisions are killing people. Romney may be able to claim that the decisions to purchase the methadone clinics were made by his successors, but he remains a principal in the ownership and is receiving profits that represent funds shifted from these unfortunate working-class souls to Romney and his rich friends.
The next time you see one of those PATIENTS-NOT-PROFITS placards, think of Mitt Romney and his wife’s Cadillacs and what that means for patients who need help with their chemical dependencies but who are instead sacrificed for the benefit of the bottom line.
PATIENTS, NOT PROFITS!