The Uncomfortable Truth About the SUD Addiction Treatment Industry

December 8, 2026

Tim O'Leary, Author and Co-Founder, Miracles Asia, Phuket, Thailand

Tom O'Connor, Publisher 

We need to talk about the elephant in the room: the substance use disorder (SUD) addiction treatment industry has a serious profit problem.

The Reality

1. Luxury rehabs charge $50,000-$100,000+ per month, with no evidence that they are more effective than standard care.  

2. Private equity firms are acquiring treatment centers and prioritizing revenue and profit over patient recovery. 

3. Patient brokering schemes in which "marketers" are paid $500-$5,000 per patient referred.  

4. Insurance fraud is running wild (urine tests billed at $15,000, unnecessary procedures, extended stays). 

5. Minimal regulation and oversight in many states and countries.

6. Treating dual diagnosis as a money-maker rather than a clinical specialty: mixing patients with serious psychiatric needs into standard addiction programs without proper staffing or protocols. 

7. Revolving door admissions, where facilities profit from repeated relapses.

8. Don't get me started on the 'one-patient-at-a-time' model. 

𝗧𝗵𝗲 𝗛𝗮𝗿𝗱 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀:

1. Can an industry truly put patient wellness first when shareholders demand quarterly growth? 

2. Why do we accept 40-60% relapse rates as "normal" when that would be unacceptable for any other chronic disease? 

3. Are we confusing luxury amenities (such as equine therapy and hot stone massages) with actual results? 

4. Why is the person struggling with addiction the most profitable customer rather than the successfully recovered one?

The Other Side

Many will say private facilities provide jobs, innovation, and options that government programs can't. That quality treatment costs money. That outcome is hard to measure—all fair points.

But when treatment becomes a product, and patients become profit centers, we've lost the plot.

**Here's another article by a patient about treatment facilities.

What Needs to Change

1. Public outcome reporting (not just completion rates... actual long-term recovery data).

2. Standard, evidence-based treatment protocols. 

3. Criminal penalties for patient brokering and insurance fraud.

4. Remove the financial incentive from patient retention.

5. Make treatment centers prove they work, not just advertise luxury.

People who have an addiction deserve better than an industry that profits more from their relapses than their recovery. 

How Do We Separate the Treatment Centers Truly Committed to Outcomes from Those Just Chasing Revenue?

A rehab facility can earn $ 250,000 from one patient who relapses five times, or $50,000 from one who recovers. Which outcome does the current business model cater to? "Repeat business is bad business." A consultant tried to sell this to a treatment facility. They passed. Why? The incentive structure made it impossible, even with good intentions.

The Current Model: Misaligned Incentives

Bad people don't run most addiction treatment facilities. People run them in a broken incentive structure.

The System Rewards:

• High patient turnover (30-day cycles)

• Repeat admissions (insurance pays each time)

• Marketing over outcome tracking

• Short-term over long-term results

When your model depends on 85% occupancy and 30-day stays, you need a constant flow of new (or returning) patients.

The uncomfortable reality: A patient who recovers = one revenue cycle.

A patient who relapses 3-4 times is counted as "helped" multiple times, resulting in the same revenue being generated multiple times.

The system isn't malicious. It's just not designed to prioritize what we say it does.

The Alternative

Imagine if facilities competed on:

• Verified long-term outcomes

• Reputation over marketing spend

• Success rates, not promises

Facilities with 70% or higher success rates could charge premiums and reduce marketing costs.

The best hospitals charge more BECAUSE they get it right the first time. Why shouldn't addiction treatment work the same way?

The Gray Area

A client on day 28 could step down. But insurance covers another 30 days. The facility has bills. The family is scared. The team believes "more is better." Is recommending 30 more days malicious? No. Clinically necessary? Maybe.

Influenced by financial incentives? Almost certainly. This is how misaligned incentives corrupt good intentions.

Why This Doesn't Exist

A consultant described it: "Clinical and business teams are like bishops of opposite colors - they can't occupy the same squares."

• Clinical priorities: Longer stays, appropriate staffing, success measured in years

• Business needs: Maximum occupancy, efficient flow, and quarterly revenue.

Neither is wrong. The structure is.

The Fix: Transparency

If facilities had to report publicly:

• 6-month, 1-year, 3-year outcomes

• Verified by third parties

• Clear methodology

Then:

• Reputation becomes an advantage

• Strong outcomes = premium pricing

• Clinical and business priorities align

The Question

Can we create a system that links the best clinical outcomes to the best business outcomes? We can. But only if we make outcomes visible and verified.

Facilities resisting transparency aren't hiding malicious practices. They're protecting a business model that can't survive scrutiny. Are facilities ready for transparency? They've aligned incentives around outcomes. Will the industry adopt transparency voluntarily? Or will families and professionals demand it?

For professionals: Have you seen facilities where priorities align?

For families: Did you have real outcome data, or was it just marketing?

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Tim O'Leary was born and raised in Phuket, Thailand. He co-founded Miracles Asia, a private residential addiction treatment center in Phuket, where they help individuals from all over the world rebuild their lives through evidence-based care, private accommodations, and integration of Eastern and Western approaches. As Managing Director of Miracles USA, Tim partners with U.S. clinicians, case managers, and interventionists to create transparent referral pathways to and from their program in Phuket. He currently lives in San Francisco, CA. You can reach Tim at tim@miraclesasia.com.

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