Drug & Alcohol Rehabilitation Clinics in the US Industry Market Research Report from IBISWorld Has Been Updated

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Although the recession negatively affected industry revenue and wages, rehabilitation clinics have largely recovered and are expected to continue to do so in the five years to 2019; moreover, the Patient Protection and Affordable Care Act (PPACA) of 2010 is expanding private and government coverage of industry services, thereby bolstering demand for industry services. For these reasons, industry research firm IBISWorld has updated a report on the Drug and Alcohol Rehabilitation Clinics in its growing industry report collection.

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Federal funding will increase coverage for rehab services, poising clinics for growth

The US Substance Abuse and Mental Health Services Administration (SAMHSA) estimates that the total societal cost of substance abuse in the United States is over $317.0 billion per year, which comprises 1.9% of US GDP in 2014. Accordingly, the Drug and Alcohol Rehabilitation Clinics industry generates an estimated $7.7 billion in annual revenue, as operators try to stem the adverse effects of chemical dependence (i.e. addiction). Federal funding through Medicaid and Medicare represents about 60.0% of this industry's annual revenue, and the government's 2010 Patient Protection and Affordable Care Act (PPACA) is set to widen and normalize the care Medicaid recipients receive for substance abuse.

Therefore, the US government and the Drug and Alcohol Rehabilitation Clinics industry are closely intertwined. Thus, while drug and alcohol counselors and therapists seek to improve the lives and families of those suffering from addiction, the government has an interest in ensuring a healthy population and minimizing the adverse flow-through effects of substance abuse.

According to IBISWorld Industry Analyst Sally Lerman, “Rehabilitation clinics are poised for growth as a result of the PPACA and an improving employment rate, both of which will expand the number of people with health insurance and increase the ability of consumers to afford rehabilitation.” This is also expected to contribute to rising profit margins over the period. Furthermore, aside from a slight decrease in 2012 resulting from an isolated drop in federal funding for Medicare and Medicaid, industry revenue has been on an upward trajectory after a recession-related dip. “The subsequent recovery has been driven by the expansion of the Medicaid program and an emphasis on health parity, which seeks to ensure that diseases such as substance abuse are treated on par with purely physical conditions,” says Lerman.

As a result of favorable legislation and a slowly recovering economy, industry revenue is expected to increase at an annualized rate of 2.2% during the five years to 2014. This marginal growth stems from losses incurred early in the period as the recession began to take hold of consumer spending. In 2009, revenue recovered beyond prerecession levels, while continued growth of 4.4% is expected in 2014. Additionally, in the five years to 2019, IBISWorld forecasts revenue to increase as healthcare reform changes included in the PPACA continue to take effect.

For more information, visit IBISWorld’s Drug and Alcohol Rehabilitation Clinics
in the US industry report page.

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IBISWorld industry Report Key Topics

The Drug and Alcohol Rehabilitation Clinics industry comprises clinics with medical staff that primarily provide outpatient services related to diagnosing and treating alcohol, drug and other substance abuse. For-profit and nonprofit establishments are included, but this industry excludes facilities that treat inpatients.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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